VCs urge companies to raise cash now, pass up deals that look too pricey Investors worry a tough economy will slash big companies’ spending on products sold by start-ups and may also damp online ad spending.
More at www.unitedBIT.com
VCs urge companies to raise cash now, pass up deals that look too pricey Investors worry a tough economy will slash big companies’ spending on products sold by start-ups and may also damp online ad spending.
More at www.unitedBIT.com
By Elena Malykhina
Dimdim, a startup made up of entrepreneurs and technologists, on Monday launched a free Web meeting service that’s meant to compete with Cisco Systems’ WebEx and Microsoft’s PlaceWare. The service, also called Dimdim, will be showcased at this week’s DEMOfall 07 conference where new products, technologies, and companies make their debut. The free service is offered as a private beta for now, but will be widely available on registration basis in two to three months.
Dimdim is browser-based and doesn’t require any software to be installed, which makes it easy to use, said DD Ganguly, the company’s CEO and co-founder, in an interview. “A customer once told us: ‘This is just like visiting a web site.’ Anyone who can use a browser irrespective of technical ability can use Dimdim,” Ganguly said.
Dimdim uses a rich Internet application with advanced collaboration features. The service allows people to share their desktop files, show slides, and chat using a webcam. Cisco and Microsoft offer similar capabilities as part of their Web meeting services. Cisco acquired Web conferencing company WebEx earlier this year, with plans to integrate its own voice and video products into the WebEx offering.
CEO Ganguly said what makes Dimdim unique is itsfoundation. “We’re about democratizing collaboration,” Ganguly said.
The service integrates open source components, such as the Google Web toolkit for Ajax applications, the Red5 open source Flash server, and the Tomcat application server, with Dimdim’s open source software.
Additionally, it works on computers that run different operating systems, including Windows, Mac, and Linux.
There are three versions of Dimdim available: a free browser-based version, open source server-side software that can be downloaded from Sourceforge.net, and an enterprise version that can be purchased for a fee by small and medium-sized businesses.
The enterprise version is customizable and scalable. For example, it allows hundreds of participants to be on a Web conference at the same time, whereas the free version doesn’t. Dimdim also offers 24/7 support for the enterprise version.
Schools and universities can integrate Dimdim’s server-side software with e-learning apps, while companies can integrate it with customer-relationship management (CRM) apps for a better collaboration experience, said Ganguly.
Dimdim is supported by venture funding from firms that also have invested in Skype, Hotmail, and MySQL. The investors include Draper Richards, Index Ventures, and Nexus India Capital.
Provides an easy-to-use platform where you’ll find items you typically wouldn’t see for rent and can make money renting out items you use only occasionally. Facilitates the transactions. Provides PayPal deposits to insure your items. A calendar shows when items are available.
Too small a community to be useful right now. The service will stop being free come 2008.
We all have a ton of stuff we barely use that’s just gathering dust in the garage or closet. You could justify your purchase of that cordless drill or ski set by inventing new ways to use them between uses, but why not put them to work making money for you? Zilok.com gives you an online place where you can easily do just that and also easily find items you’ll only need for a short time. The creators hope to make their site the one-stop online shop for locating anything you need on a temporary basis.
The site is like a Craigslist for rentals, showing available items in your area, but it also assists in the rental process, giving you the tools needed to set up terms and facilitate the transaction online. For instance, using Zilok search I found someone in the New York City area offering a Nikon D80 Digital-SLR camera and a 2GB memory card at a daily rate of $12 for 1 to 15 days. If that met my needs and budget, I’d send in a rent request, wait for an acceptance from the lender, and then set up a time and place to meet and pay for the item. It’s that simple.
You can sign up for the service as a business (if you’re a professional rental service) or an individual. As a lender, you can give potential customers peace of mind by becoming a verified member. To do so, you supply Zilok with your cell phone number, and in return, you’ll receive a text message confirming your information. Verification links an account to something concrete, giving potential renters more reason to trust you. Member profiles include ratings and customer feedback, which give you a good feel for who it is you’re renting from.
The stipulations you place on items you’re willing to loan out—the per-day price and length of rental—display online on that item’s page. A Zilok-provided rental agreement template for users to sign covers everything that happens in case of damage or lost of rented items. You can also set up a PayPal deposit as insurance on your goods.
To find items for rent, you search by keyword or category, then look at Zilok’s Google Maps mashup, which shows what’s available in your area. You can click on the image of the item to view the terms of rental and the lender’s profile. The item’s specs, supplied by the lender, appear below the map and the rental terms. A helpful calendar on the items page shows when the item is available. When you find something you like, clicking on the rent item button sends you to the booking page where you propose a start and end date for your rental and how long you’re willing to wait for an acceptance reply from the lender.
Once the rental request is accepted things move from the virtual to the actual. The lender and renter set up a meeting location by e-mail, where they meet and hash out the final details, such asmethod, and complete the transaction. After that, Zilok is no longer part of the process. The site doesn’t handle the actual exchange of the item and payment. The rental agreement, which according to Zilok ensures that “the consequences of an incident are governed by this contract and of course by any legislation that is in effect,” confirms the deal and conditions, helping to safeguard both sides.
As of this writing, the service is free, but that may change in less than two months. Starting January 2008, you might have to pay to put items up for rent. Site reps told me they’ll evaluate the site density, and if there are enough users to support it they’ll implement a charging scheme similar to what newspapers charge for classified ads. If there aren’t enough users, the site will remain free until later in 2008.
You can already find places to rent specific items, like cars, tuxedos, power tools—whatever—on- and off-line. But Zilok will create a marketplace where you’ll find not only those items, but others you don’t typically see—all in one place. The site is still too small to be tremendously useful right now. As of this writing there are only about 180 items up for rent in the U.S. I’m also not sure that imposing fees is the best way to promote growth. I doubt craigslist would’ve achieve such massive popularity if it charged a fee, no matter how minimal, to post ads. Regardless, Zilok sounds like a fantastic idea, and I’ll be interested to see if it will work.
By Andrew Conry-Murray
These days, if people have a question they turn to Google for an answer. Startup Paglo wants to become Google for IT administrators.
The company, which launched today, is developing a search engine that lets IT professionals query their own network infrastructure and software.
Interested users can sign up for a private beta, which is expected to launch at the end of November.
Here’s how it works. Customers download Paglo’s crawler to a server or PC. The crawler gathers information about each machine on the network, including device type, name, IP address, installed software, and so on. The crawler communicates the information to Paglo’s data center, where it’s indexed and stored.
Customers then access their accounts to run searches on the information gathered by the crawler. In the demo that CEO Brian de Haaff showed me, he imagine an admin that wanted to know if he had enough Office 2003 licenses for all the copies of the software running in the organization. He queried the search engine for all the instances of Office on the network. The search engine kicked back the answer, which could be displayed as text, or in charts or tables.
Of course, any half-baked network software tool should be able cough up basic information like this. De Haaff says the value of the search engine is that it pulls this information out of its respective tool-based silos and makes it available with a simple query.
However, the tool has limitations. In the demo, de Haaff couldn’t ask “How many licenses for Office 2003 do I have?” because the system can’t yet discover that information. Instead, he assumed the administrator would know how many licenses he had, and then match it to the number of instances of Office actually on the network.
It would be great to see the crawler and indexer develop enough sophistication to query data stores, such as those held by an asset management tool, and include that information in its search.
Also, the results of a search will be influenced by the initial search request. A poorly worded query will generate poor results. Paglo provides two search options: standard keyword search, and the Paglo Query Language. The query language is intended for sophisticated searches, but also imposes a learning curve on would-be searchers.
Please note that the company itself is only five months old, so these critiques should be taken in context.
DID I MENTION IT’S FREE?
Paglo takes a page from the Web 2.0 playbook by offering the crawler and search service for free. “When we have a lot of users, then we’ll think about monetization,” says de Haaff. I’m sure his investors have given it some thought, especially considering that Paglo is absorbing all the costs for storing and processing each user’s network data.
Advertising or subscription fees are the most likely business models. But de Haaff says that for the foreseeable future, Paglo won’t charge for the service.
That’s not the only Web 2.0 play. De Haaff also hopes to build a community of users that will share useful queries with one another and add features to the crawler (which is open source).
For those worried about data privacy (and that should be everybody), Paglo partitions each customer’s data to prevent the information from being seen by others.
Pedigree is always a consideration with startups. Paglo’s got a solid one. Co-founders de Haaff and Dr. Chris Waters come from Network Chemistry, a network management and wireless security vendor. They recently sold Network Chemistry’s wireless security business to Aruba. They are using the proceeds, which are undisclosed, to finance Paglo. Paglo was formerly known as Project Wishbone.
By Erica Naone
A new startup called YourStreet is bringing hyper-local information to its users by collecting news stories and placing them on its map-based interface, down to the nearest street corner. While there have been many companies that combine information and maps, YourStreet is novel in its focus on classifying news by location.
When a user opens the site, it detects her location and shows a map of that area, stuck with pins that represent the locations of news stories, user-generated content called conversations, and people who have added themselves to the map. The user can zoom in or out of the map or look at another location by entering a place name or zip code into a search bar. CEO and founder James Nicholson says that what sets YourStreet apart is its extensive news service: the site collects 30,000 to 40,000 articles a day from more than 10,000 RSS feeds, mostly from community newspapers and blogs. “We’re not relying on the users to provide us with articles,” Nicholson says. The stories featured on the site aren’t of a specific type, and users will find the locations of murders marked alongside the locations of upcoming music shows. Stories featured on the site are teasers, and, if a user clicks to read further, she will be directed back to the source of the information.
Nicholson says that he hopes the broad base of news will provide a foundation upon which the site’s community can be built. The site includes social-networking features, such as the ability to log in, meet neighbors, start conversations, and leave comments to annotate stories. “The basic goal behind YourStreet is to connect you to the information that’s most important to you,” Nicholson says.
The site’s main technological advance lies in its ability to mine geographical information from news stories. Using natural-language-processing algorithms developed in-house, as well as supplementary algorithms provided by the company MetaCarta, the site searches the text of regular news stories for clues about associated locations. The system searches particularly for entities within cities such as hospitals, schools, and sports stadiums, Nicholson says, relying on databases of entities created by the U.S. Geological Survey. YourStreet is currently working on some improvements to the system’s ability to recognize nicknames; for example, it should be able to interpret “GG Bridge,” as many bloggers refer to it, as the Golden Gate Bridge.
Other companies have designed similar but contrasting services. Outside.in, for example, features similar hyper-local news features, but it relies much more on human participation than YourStreet does. Participating bloggers or users add tags to stories to place them in the correct locations, and Outside.in employs a small team of part-time employees to match articles to places by hand. Launched about a year ago, the Outside.in interface is much more focused on information than on maps. According to John Geraci, one of the company’s founders, these features are all purposeful. “Making the map the first thing a user sees is a mistake a lot of mapping sites make,” he says, adding that he thinks the user is only interested in a map once information has drawn her in. Geraci says that Outside.in is built to rely heavily on human intervention, rather than on natural-language search algorithms, because, in his opinion, the algorithms don’t work well enough at this phase, and, with this type of service, stories are only useful if mapped accurately. “When you’re talking about location, there’s a low tolerance for noise,” Geraci says. “We believe you need people, that you always need that discernment.”
The entries for the Boston neighborhood known as Union Square provide some insight into the challenges faced by both YourStreet and Outside.in. YourStreet’s algorithms did filter out all the stories about the famous Union Squares in New York and San Francisco. But there was a story about the Union Square in Somerville, a city located very close to Boston. Outside.in, on the other hand, included only posts that were relevant to Union Square in Boston, but it didn’t provide as broad a range of fresh material as YourStreet did.
Dan Gillmor, director of the Center for Citizen Media, says that companies are still figuring out how to provide hyper-local news properly. “YourStreet’s approach of combining aggregation with content creation seems promising,” he says. However, he notes that YourStreet faces heavy competition from other geographically focused sites, which run the gamut from Google Earth, to the do-it-yourself atlas site Platial, to the local-news service Topix.
Nicholson says that YourStreet will add a few features in the near future. In about a month, the site will launch an algorithm that compiles statistics on which stories are more interesting to users and brings those stories to the top. The site will also launch a widget that bloggers can use to paste information from YourStreet onto their sites. More far-off plans include the launch of a tool kit that developers can use to integrate with YourStreet, and a system that would allow users to classify stories by subject matter. The company plans to make money through targeted advertising.
By Sarah Wachter
Wikio is the latest internet start-up from Frenchman Pierre Chappaz, who is best known for selling Kelkoo, a European online price comparison service, to Yahoo! for €475m. Wikio is a user-managed news search engine that allows people to create their own pages of news, blogs and podcasts subdivided into a dozen categories, from health to fine arts. Users can vote for favourite items, or default to the most-accessed news and blogs provided by other subscribers. Wikinauts also have access to the site’s shopping search engine; to buy a camera, for example, a user can call up product reviews for comparable brands and find the lowest prices from a list of stores closest to home.
While custom news services abound in the US, Europe is an open playing field. Wikio covers more than 10,000 reliable sources for France, for example, while Google News covers only around 500. “There is nothing comparable on a European level, aside from a few small sites,” Chappaz notes.
Wikio launched in mid-2006 after Chappaz conducted the largest “beta” test in Europe, which involved 28,000 users registering their feedback online. Today, the site draws 2.3 million visitors a month, half in France and half outside. In its first year, the company aims to build its user base to three million, but Chappaz, who is the executive chairman, says the site has the potential to attract an audience of more than 10 million.
The company aims to turn a profit by using the “cost per click” business model of Google, where Wikio will receive 10 cents per click for every user who visits a vendor’s site. The shopping service is currently available in France, Italy and Spain, and will begin soon in Germany. “We’re not obsessed by sales,” says Chappaz, who put €1m of his own funds as seed money into the venture. Traffic has grown solely by word of mouth, and some analysts claim Wikio is the most interesting European start-up since Skype.
Unlike the Skype founders, though, Chappaz is no computer geek. Equipped with just a general studies degree, he stumbled into the high-tech arena when he was hired to create the permanent computer exhibit for Cité des Sciences, located inside Paris’s Parc de la Villette. He then spent a decade in various marketing posts for high-tech firms, including as marketing director, western Europe for IBM, and later struck out on his own with a communications boutique.
The company is truly a “2.0”-style undertaking: its technical staff of 30 hails from various parts of France and Switzerland (Chappaz resides in Geneva, where the company is headquartered). There is no office space, and staff members “meet” once or twice a week in cyberspace. CEO Bertrand Peretra is the former managing director of French shareware outfit Planète Soft.
Many users of Chappaz’s service may be surprised to learn that Wikio has absolutely no connection to the creators of Wikipedia, the free-content encyclopedia written collaboratively by contributors around the world. Chappaz insists he chose the five-letter word because it is short, simple and conveys the meaning “tell me quickly”. Actually, Wikio doesn’t stray too far from the original meaning of wiki – the Hawaiian word for “fast”.
First month of trading June 2006
2007 predicted sales €100,000
Start-up money €1m in seed money; €4m in venture capital
Product range Customised online news, blogs, podcasts, videos and shopping
Marketing spend Nothing yet
Source:CNBC European Business
LongJump, of Sunnyvale, Calif., is a Salesforce.com challenger, CEO and Founder Pankaj Malviya told eWEEK in a recent interview.
A service of Relationals, a privately held maker of on-demand CRM (customer relationship management) and SFA (sales force automation) business applications, LongJump’s initial offering includes 12 SAAS (software as a service) applications in customer service, sales, marketing, finance and human resources.
Relationals’ platform forms the foundation for the LongJump service. But while the Relationals platform caters to enterprises, LongJump aims to sell its wares to small and midsize businesses at a more attractive price point than Salesforce.com offerings, Malviya said.
After all, he said, SMBs can’t afford expensive enterprise software that is taxing to maintain, cannot be easily customized and does not integrate with other business applications.
“Business environments have become dynamic,” Malviya said. “Users do not want to settle down with that big monolithic application, whether it’s Salesforce.com or SAP. They want to be able to dynamically change the application configuration and mash up the data to meet their requirements. We believe our platform has the capability to provide that.”
Malviya said that LongJump applications work well together and are simple to customize to allow SMBs to Web-enable their business processes so they can manage information and collaborate more efficiently.
Features of the software include: customizable homepages with configurable dashboard widgets; reporting with configurable charts and graphs; the ability to search and see data in calendar views and list views; embeddable business processes such as Web forms; management capabilities to assign access rights by team, role and user.
LongJump is also promising SAS 90 Type II compliance for user data protection and security and five-nines (99.999 percent) infrastructure and application availability.
One application, OfficeSpace, lets knowledge workers share calendars, tasks, status reports, documents and other information, replacing e-mail as a means of internal information exchange.
Another app, 360˚ Customer Manager, allows users to store customer account information, share contacts related to customers and keep track of appointments, documents and e-mails.
LongJump hasn’t hashed out pricing yet, but as a gesture of good faith to prove it’s more affordable than Salesforce.com options, the company is offering all of its applications for free for a 90-day trial period through Dec. 31, 2007, after which pricing will be announced.
Yuuguu Web Collaboration
Yuuguu, of Manchester, UK, which means “fusion” in Japanese, introduced its Web collaboration tools at DEMOfall 07.
Yuuguu CEO Anish Kapoor said Yuuguu helps people work together remotely, across different platforms, as if “they were sitting in the same room.”
Positioned as an alternative to Web conferencing tools from WebEx, Microsoft and Citrix, Yuuguu’s software enables users to see, share and take control of each other’s computer screens and applications.
Colleagues can message and chat while they share screens. The platform includes voice conferencing services for one-to-one and one-to-many voice calls. Yuuguu also boasts presence, letting users see when friends or co-workers are online, and click to invite them.
Prospective users can download the software, save it to their computer, and invite people by sending them a link.
Kapoor emphasized that Yuuguu’s software is free and said that Web collaboration offerings from WebEx, Citrix and Microsoft “horrifically expensive and geared toward large enterprises.”
Kapoor said the company plans to make money with add-on services, including the ability to recall logged historical conversations and collaboration sessions, as well as customization features such as a company logo or brand.
But prospective online collaboration players seem to make up the bulk of the newcomers, which is no surprise considering the multi-billion-dollar market potential of the space.
For example, MyQuire, based in Mountain View, Calif., will debut a tool to let members work with tools such as Word, Excel and PowerPoint and keep projects on track with task lists, calendars and e-mail notifications.
Users can also “meet” with other project members in real time wherever they are and connect their projects with their personal and professional networks.
Also, Diigo, of Reno, Nev., which stands for “Digest of Internet Information, Groups and Other stuff,” introduced an information network that creates communities around information, topics and knowledge.
A collaborative social networking site, Diigo connects members through the content they collect, while also allowing people to discover and share information that matters to them with others in the network.
Venture capitalist Mike Fitzgerald says he’s more inclined to invest in software startups that embrace the service model.
Fitzgerald, founder of Commonwealth Capital Ventures in Waltham, Mass., says SaaS is a win-win for the software company and customers. Sales cycles are shorter for SaaS startups because it’s easy for potential buyers to try the product. And if a customer starts with a limited rollout, a department head can pay out of discretionary budget, or even use a credit card, instead of sending a purchase order through normal channels.
On the customer side, capital expenditures for SaaS are significantly lower than a traditional premises deployment, and the product gets into users hands more quickly. Customers begin extracting value right away.
A service model also provides a predictable revenue stream for the software company, because payments come in every month. That means the company can make more accurate predictions about its quarterly numbers.
By contrast, premises software vendors face more uncertainty. Because they get a large portion of revenue from the initial license sale, the timing of a purchase can make or break a quarter.
“Oracle taught the enterprise software crowd to buy at the end of the quarter to get a better deal,” says Fitzgerald. “And if you miss an order, you blew a quarter and now on the Street you’re a bum.”
The downside is that SaaS vendors don’t get a large chunk of license money up front. The number of new accounts a SaaS vendor has to open is a multiple of a traditional software company.
“You need to get an accumulation of payments to be large enough to support your operation,” says Fitzgerald. “It forces a SaaS company to be more productive for every dollar of sales and marketing.”
And as with any venture, SaaS startups need to identify an underserved market. Translation? Fitzgerald has no plans to invest in a CRM startup.
That said, Fitzgerald is bullish on the service model. “SaaS is the future of the software business.”
By Antone Gonsalves
Startup ParAccel has launched an analytic database that at least one expert sees as a potentially disruptive technology in the data warehouse and database management system markets.
The San Diego-based company officially launched itself and its first product last week by announcing the general availability of the ParaAccel Analytic Database, a DBMS capable of all types of decision processing, from traditional data warehousing and analytics to operational business intelligence, online analytical processing, and high-speed query processing.
In addition, ParAccel announced a partnership in which Sun Microsystems would offer a DBMS appliance with ParAccel software, which is also available as a standalone database or as a drop-in database accelerator.
In addition, the software can be configured for all-in-memory analytical processing, or for traditional disk-based database-execution deployments, James Kobielus, analyst for Current Analysis said in a recent research note. “It can run on a single massively parallel processing-capable compute node or on multiple distributed nodes with scale-out and high availability.”
Kobielus said the potential impact of the ParaAccel Analytic Database is high on the DBMS and DW markets because of its innovation, flexibility and scalability. “This new release could prove truly disruptive to established segments in which rivals offer point solutions rather than flexible, appliance-ready, analytics-processing solutions,” Kobielus said.
Nevertheless, ParAccel has its shortcomings. For one, it can operate as a drop-in accelerator only with Microsoft SQL Server, and not with the top two enterprise databases: Oracle and IBM DB2, the analyst said. In addition, ParaAccel’s offering competes with products in several market niches, and the startup has yet to prove that its technology is truly the best of breed in any of those segments.
However, ParAccel’s announcement “sends a signal that innovation is alive and well in the DBMS arena,” Kobielus said.
“Rival DBMS/DW vendors should rethink their go-to-market strategies in light of the release of ParAccel Analytic Database,” the analyst said. “This radically flexible new release could prove truly disruptive to many established market segments.”
By John Foley
Sun Microsystems drew some 300 entrepreneurs to a startup “camp” in New York. The event was full of advice on things emerging companies can do raise their chances of success — and a reminder of flubs to avoid.
Sun hosted the get-together as part of its outreach to early-stage companies. Sun launched its Startup Essentials program in the United States a year ago and has engaged some 1,000 companies since then. Sun extended the program a few months ago to India and China and plans to offer it in other parts of the world, according to Sanjay Sharma, Sun’s director of startups and emerging markets market development. Sun helps startups with free software, services, discounted hardware, and hosting in hopes the small fries will turn into larger customers down the road.
A lot of good advice was presented. Saeed Amidi, president of Plug And Play Tech Center in Sunnyvale, Calif., talked about the benefits an incubator can offer. Since opening its 175,000 square foot facility last year, Plug And Play has become home to 112 startups backed by a total of $350 million inventure funding. Companies there have ready access to venture firms, data center hosting, tech vendors, and fellow innovators.
Other presenters included Jason Hoffman, founder and CTO of Joyent, who gave a primer on how to architect Web applications for scalability; Alan Sutin, an IP lawyer with Greenberg Traurig, who talked about patents and trademarks; and Jed Katz, managing director of DFJ Gotham Ventures, who went over the dos and don’ts of working with VCs.
The venue also served to demonstrate what to avoid if you’re an up-and-coming company. The following list is drawn from my observations at the day-long affair. Here’s what not to do if you’re a startup. Don’t…
1. Bungle the napkin pitch. Several of the startups I met were anything but concise in getting their ideas across. That’s a missed opportunity. Entrepreneurs must be able to articulate big ideas in a few seconds.
2. Dress like a scarecrow. Old shirts, baseball caps, and sandals are great for the weekend, but they don’t make a great first impression at a business event.
3. Spill the IP beans. Attorney Alan Sutin warns that you have only a year to file for a patent after your idea has been publicly disclosed. Once you start blabbing, the clock starts ticking.
4. Go it alone. Veteran investor Amidi of Plug And Play Tech Center says entrepreneurs need to find one or two partners who share their passion for the business. If you can’t convince one or two others this is a great idea, it probably isn’t.
5. Set up shop in Timbuktu. You’re much better off in Silicon Valley or some other center of entrepreneurship and funding. “If you move to the Bay Area, your chances of success double,” says Amidi.
6. Call your investors dopes. One speaker said his startup got its initial funding from “friends, family, and fools.” He was kidding — I think.
7. Snooze during brainstorming. The guy next to me began snoring more than once during presentations. There are diminishing returns to those late nights working out a business plan.
I can’t guarantee your startup will be successful if you avoid these gaffes. But it’s good bet it won’t be if you don’t.