Author: Chris Cameron

It has been well over a month since the devastating earthquake struck near the Haitian capital of Port-au-Prince, and while thousands of relief workers have flocked to the island, some of the efforts are still in the planning stage. Though innovative tech startups aren’t the first thing that comes to mind when thinking of a developing nation like Haiti, the founders of Seattle-based Startup Weekend believe their model for entrepreneurship and innovation is the kind of spark the country needs to get back on it’s feet and prosper in the future.

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In a blog post on the Startup Weekend website Sunday, co-founder Marc Nager announced the non-profit startup incubator program would be teaming up with charities and holding an event in Haiti in support of local innovation.

“The event will be far different from a standard Startup Weekend event; however, the model will fundamentally [be] used to help find the best solutions to the most widely felt problems of the people,” writes Nager. “We believe we will find local Haitians that will have great ideas to address some of the problems they face daily. The end goal is to take the money we receive via the fundraising efforts and award it directly to the new, local ventures and ideas the emerge from the event.”

In Haiti, Startup Weekend is working together with We Hear Your Voice, Global Water Trust, and Angels in Cowboy Boots, as well as Microsoft BizSpark and Piryx in the U.S. to raise funds for the event’s participants. In terrible situations like the aftermath of a traumatic earthquake, any form of help is a positive thing, but some, like Melissa Carrier, director of the University of Maryland’s center for social value creation, are skeptical whether the event will do much to benefit the fragile nation.

“There is a strong risk that Haiti may not be ready to absorb this kind of economic development by the fall,” Carrier said as quoted in a New York Times article Sunday. “Basic needs of the citizens may still be so under-met that there won’t be capacity to even think about business creation and jobs.”

Startup Weekend looks to kick off their funding this March at South by Southwest with an event at The Speak Easy. The venue will allow for 400 attendees, and Startup Weekend hopes to raise $8,000 for Haiti by charging a $20 entry fee. Obviously, any little bit helps in a situation like the one in Haiti, but is an innovation event such as this going to succeed in the recovering nation? Or is entrepreneurship the spur Haiti needs to better its economy? Let us know your thoughts in the comments.

Disclosure: The New York Times is a syndication partner of ReadWriteWeb.

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A popular trend among startups these days is to create a video pitch. Cameras are cheaper, and do-it-yourself applications like iMovie on the Mac make video editing fun and easy. But like any form of new media, video is not just a secondary platform on which to present a carbon copy of something from an earlier medium; in other words, a video pitch needs to take advantage of the fact that it’s a video. Videos have motion and interactivity and the ability to show anything with pictures and animation, which is much more than we can say simply with text.

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Foundry Group’s Brad Feld wrote today that he gets pitches in his inbox everyday, and while some of them are videos, they often don’t take advantage of the medium. As the title of this morning’s post suggests, Feld encourages video pitchers to “Show Don’t Tell“.

“The video I watched today was a two minute segment of the entrepreneur looking into the camera and describing his business idea,” writes Feld. “I ended up watching the full two minute video to see if he ever shifted from “tell” mode to “show” mode. He never did.”

VCs don’t want to watch a video monologue of you telling them all about your product; you can do that with an email or a blog entry. Be a show-off with you video pitches and skip the boring discussion and get to the product. Getting a look at the actual product and its features is what will hook a potential investor, not jargon and PR speak.

“For most of the great VCs I know, the way an entrepreneur makes a connection when there is no pre-existing relationship is to generate an immediate interest with the product,” writes Feld. “That’s what happened for us in the case of Brightleaf and Organic Motion. The entrepreneurs were highly credible, but more importantly we immediately got excited about their products.”

When a popular movie is published in book form, they don’t just print the script and sell it; they re-write it in a narrative form that is native to books. So why would an entrepreneur doing a video pitch simply recite his same old spiel in front a of a camera? If it’s a Web app, take the time to include screenshots, or even a screen-capture demo of your product. If it’s something like an iPhone app, go out and show how it would be used in a real-life situation.

If a VC can close their eyes and still get as much from your video pitch by just listening to it, you’re doing it wrong. Don’t try to speak for your product, let it speak for itself.

Photo by Flickr user Andrew*.

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We’ve been on a “leveraging social media to boost your brand” trend lately with our Weekend Reading series here at ReadWriteStart; we previously brought you Gary Vaynerchuk’s Crush It! and just last week we covered Butow and Bollwitt’s Blogging to Drive Business. This week we continue this trend and additionally narrow our focus to social networking with the latest book from author Clara Shih, The Facebook Era: Tapping Online Social Networks to Build Better Products, Reach New Audiences, and Sell More Stuff.

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“Online social networks are fundamentally changing the way we live, work and interact,” the back cover of the book touts. “They offer businesses immense opportunities to transform customer relationship for profit: opportunities that touch virtually every business function, from sales and marketing to recruiting, collaboration to executive decision-making, product development to innovation.”

Author Clara Shih worked previously for both Microsoft and Google before creating Faceconnector, an early Facebook application for businesses. More recently, Shih directed the product line of AppExchange, a marketplace for third-party SAAS business apps run by Salesforce, but has since left Salesforce to run her own social media business software company, Hearsay Labs.

The first third of Shih’s book provides a basic background history of social media online, from the first networks of the early days of the World Wide Web to today’s powerhouses like Facebook, the book’s namesake. Shih believes that three factors helped separate Facebook from the herd of social networking sites: trusted identity, exclusivity and the news feed. Facebook has become a trusted directory because users display their real name that in the early days was verified by having a valid university email address. These addresses also clearly placed users into a network making the site feel better organized instead of creating a service wide free-for-all. Though restrictions on networks and university email addresses have been lifted, the sense of “trusted identity” still prevails on Facebook.

In the second part of the book, Shih breaks down how Facebook and social networking is “transforming the way we do business” with topics like using Facebook as a CRM and recruiting online. One suggestion she has for building an online business is to find inspiration from real-time trend feeds.

“By investing in building out entrepreneurial networks on social networking sites that cut across different homogeneous networks, product managers can increase the chances they will be exposed to radically new thinking,” writes Shih.

Shih then provides a “step-by-step guide for using Facebook for business” in the last portion of her book. Among these steps is engaging the audience, delivering your message and building customer relationship through continued interaction. Strangely, though, Shih suggests that businesses only need to be be in the habit of using Facebook “at least once a week,” which seems like a low goal to aim for. As we learned from previous books, building a loyal audience on the Web requires tenacity and a frequent online presence. Once a week will suffice for some, but the real game changers are interacting with their customers daily.

Web savvy readers may find The Facebook Era to be less for them and more for the inexperienced Web user looking for a crash course in online social marketing. The book is heavily sales oriented, as is to be expected from an author with Shih’s backround, but does provide some healthy insights for the average entrepreneur. Coming in right around 200 pages, this book is a little longer than some of the book’s we’ve previously recommended, but a deep index will help you find exactly what you’re looking for.

Disclosure: A review copy of the book The Facebook Era was provided to ReadWriteWeb by Pearson Education, Inc.

Photo by Flickr user Gauldo.

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While it is relatively cheap to get a web startup off the ground these days, other industries aren’t as lucky. Take green-tech or medical technology for instance; at TED this year Bill Gates said that the minimum investment the world needs to create sustainable eco-friendly renewable energy is “only” in the range of hundreds of millions of dollars – and that’s just to get started. It’s industries like these that require Angel and VC investments at the early-stage level to get significant innovations off the ground, and a government tax credit proposed for angels in Minnestoa could encourage them to dole out more cash for high-tech ventures.

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Earlier this month in St. Paul, “witness after witness” spoke in support of a bill that would create $32 million in tax credits available to angel investors, writes Thomas Lee of MedCity News. “Entrepreneurs, investors, university officials, industry groups warned lawmakers that the lack of early stage capital meant innovative start-ups in Minnesota would either die or move to another state,” Lee adds.

With a growing community of medical innovation, Minnesota is attempting to play catch-up with its neighbor state Wisconsin whose similar tax credit has provided rocket fuel for innovation. Lee quotes a report from the Wisconsin Angel Network which says that angel investments and number of deals tripled in the first three years of the state’s program. He adds that three bio-tech spin-offs from the University of Wisconsin were bought for more money in the last three years than in the last 25 years of Minnesota-based university spin-offs.

“VitalMedix Inc., a promising drug company from the University of Minnesota, recently moved to Hudson, [Wisconsin]” Lee says. Hudson is just across the Minnesota/Wisconsin border less than 20 miles from St. Paul. “Miromatrix Inc., based on the work of Dr. Doris Taylor, warn they will leave the state if they can’t find angel financing.”

One reason for the success of similar credits in other states is that it acts as an insurance for angels when they make risky investments. Most innovation is a risky investment because it’s an unproven model, and providing a tax credit safety net for the angels could provide the much-needed investment dollars to the companies with tomorrow’s innovations. Should state governments be putting aside money to backup their local angel investors? Or are there better, cheaper ways to boost innovation? Will we ever see anything like this for Internet startups? Let us know your thoughts in the comments.

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At the 2006 Winter Olympics in Torino, Italy, digital advertising development studio Inition brought augmented reality (AR) to the games with a promotion they produced for Samsung which gave users a unique look at a new device from the company. With thousands of people flocking to Vancouver for this year’s Olympics, the games have again taken to augmented reality for some unique and immersive marketing opportunities.

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Yahoo! and top AR development house Total Immersion have teamed up to provide an interactive information kiosk at the “Yahoo! Fancouver” exhibit. The experience involves a three paneled screen with sections for news, weather and medal counts, along with a camera pointed at the user. Depending on where the user is standing, the AR software will place various hats and accessories on their head; ie: a press hat for the news section, or hats with country logos on them for the medal count section. The weather section places various weather related accessories on the user, such as wool caps, visors, sunglasses, and goofy umbrella hats.

Vancouver-based social media blogger, author and speaker Shane Gibson snapped the video below demonstrating the interactive AR display which is located in Yaletown, a borough within the Canadian city.

The experience, which also supports some brochure tracking features, is an entertaining way to draw the attention of the event’s attendees while also providing them with useful information about the games. Facial tracking is nothing new for Total Immersion, who provided similar services for a Transformers promotion that placed a robotic helmet on users’ heads. Others AR developers have used facial tracking for applications as well, including metaio’s hockey mask promotion at the Xcel Energy Center in Minneapolis, and FittingBox’s “virtual mirror” for Ray Ban Sunglasses.

The thing I like about this example of facial tracking AR is that – like the Ray Ban promotion – it provides a practical service along with the entertaining and interactive aspect. Users aren’t simply walking up to a screen an having a 2010 Olympics hat stuck on their head, much like the Transformers or hockey mask promotions. Yes, the hats and accessories are a bit silly, but the addition of news, weather and medal count information makes the use more practical. The AR draws the attention of passers-by with its fun and gimmicks, but rewards them with actual useful information to take with them. A user walks away knowing what countries lead the medal count and what the weather will be like based on the AR hats that were placed on them.

I wouldn’t be surprised to see a hat manufacturer like NewEra take note of this promotion and provide an interactive way for potential customers to model their various hat styles with either an in-store kiosk or with an at-home web-based solution. Facial and body tracking is an excellent use of augmented reality for fashion retailers, as we have already seen applications for users to try on sun glasses, shoes, clothing, jewelry, make-up and hairstyles. Imagine the private dressing rooms at department stores being replaced by AR “virtual mirrors” for a faster, more social way to try on new outfits. The possibilities are endless, but what or who will be next?

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A month ago in our list of the “Top 6 Colleges with Entrepreneurial Programs” we highlighted the opportunities for the forward thinkers at Babson College in Massachusetts. Babson also happens to be the professional home of Daniel Isenberg, a management practice professor, who recently contributed to the Harvard Business Review’s “The Conversation” blog with a post titled, “Should You Be an Entrepreneur? Take This Test.” In his post Isenberg provides twenty questions that any aspiring entrepreneur should ask themselves before quitting their day job to make sure they have what it takes to succeed.

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“I’ve learned in my own years as an entrepreneur — and now an entrepreneurship professor — that there is a gut level “fit” for people who are potential entrepreneurs,” writes Isenberg. “There are strong internal drivers that compel people to create their own business.”

Isenberg’s self-examination includes true/false statements like, “I don’t like being told what to do by people who are less capable than I am,” and “I would rather fail at my own thing than succeed at someone else’s.” After completing the 20-part checklist, Isenberg gives you the entrepreneurial green light if you answered “yes” to 17 or more of the questions.

According to Isenberg’s checklist, the ideal entrepreneur likes to win, likes to “question conventional wisdom”, is “rarely satisfied” and gets so excited by their ideas that they “can’t sit still”. Of course, having some entrepreneurship in your blood can’t hurt either; one of Isenberg’s signs of an entrepreneur is having members of their family or close friends who run their own business. For his final question, he suggests that a worthy entrepreneur “could have written a better test” than his.

Isenberg warns that while answering “yes” to most of these questions could mean you’d make a good entrepreneur, it doesn’t necessarily mean you should quit your job right away. “Do you have debts to pay? Kids in college? Alimony? Want to take it easy? Maybe better to wait,” he writes. Finally, he adds that risk-takers and money-seekers do not make for good entrepreneurs.

“People don’t choose to be entrepreneurs by opting for a riskier lifestyle,” writes Isenberg. “Risk is ultimately a personal assessment: what is risky for me is not risky for you.”

Can a simple checklist weed-out the true entrepreneurs with potential from the wannabes looking to make quick cash? Or is there more to one’s potential for success as an entrepreneur than these twenty attributes? Let us know what you think makes for great entrepreneurs in the comments.

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There’s an old saying that “any press is good press,” which for a company means it is ultimately beneficial to be mentioned in the media regardless of whether said mention is positive or negative. But there’s also a time when good press, while positive in nature, is not necessarily meaningful to the company overall. Don Rainey, investor at Grotech Ventures and author of the blog VC in DC, recently wrote about “5 Pieces of good news you should ignore,” referring to positive things that he believes are really meaningless when it comes to the success of your company.

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“When you’re running a company, one quickly becomes acquainted with the thought that everything matters … and in that, one is mostly but not completely right.” writes Rainey. “The surprise is that most of the stuff that turns out not to matter is good news. That is to say, positive events that don’t translate into anything additive to the company’s growth.”

Three of Rainey’s five examples of when good news is fruitless include media coverage. Being written up in a local paper, placed atop a list by a trade publication or even interviewed on national television isn’t anything to get terribly excited about, he says. “Just consider it a break from the daily routine,” he adds. “You still have to concentrate on communicating your value proposition to probable suspects.”

Without naming names, Rainey also advises companies to not take too much pride in trade show awards. He says we should be “profoundly suspect” of these awards which he believes go to the company that buys the biggest booth. Finally he says that companies should not be flattered by calls from what he calls “powerless” bigwigs at large corporations. “Many a small company will find itself turned on its head chasing a huge opportunity that is only [the] product of [a] bureaucrat’s search for meaning,” Rainey writes.

Sure these are all positive things to have happen to a young company; being written about in a respected publication, or featured on national television is indeed an accomplishment, but Rainey warns to not become overzealous and flaunt these happenings. A pitch ultimately shouldn’t hinge on press coverage, awards and fancy endorsements when providing evidence of traction. Instead of touting your various accolades, place your trophies aside and focus on the task at hand – convincing the VCs that your product has inherent value.

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We have all been to an event where a 50/50 raffle was taking place to raise money for a particular organization or cause, but what if this same style of fund raising was applied to funding startups? Under30CEO, an online resource for young entrepreneurs, has teamed up with the developers of the BizBreak iPhone app to host the Limitless VC Contest. The winner will receive a cash prize including 50% of the app’s revenue during the period of the contest, along with mentoring from five notable entrepreneurs.

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Startups can enter by submitting a short video to YouTube describing their company and their plans for spending the possible winnings. Applicants (who must be at least 18) are also required to provide feedback on the BizBreak app (boosting both sales of the app and the contest pot size), which is a gimmicky game that pokes fun at corporate bosses by pitting them in a boxing match against the user. The contest will last 60 days at which point the 8 most viewed video entries and 2 wild card entries will be placed on the contest site for a week of final round voting.

The contest pot starts at $3,000 and will increase with each app sale during the 60 days. After Apple’s 30% cut, 50% of each app sale will generate just below $0.35 for pot, so entrants are encouraged to spread the word about the app. On top of cash prize, winners will receive consulting from five entrepreneurs including Andrew Warner of Mixergy.com, and crowdSPRING co-founder Ross Kimbarovsky. The other mentors include author/entrepreneurs Cameron Johnson and Mike Michalowicz, as well as Yanik Silver, founder of Maverick Business Adventures and the UG6 seminar.

In the true spirit of Under30CEO, at just 19-years-old, the founder of BizBreak, Marshall Haas, barely qualifies for his own contest. BizBreak is actually Haas’ third company in the last two years, having previously founded online automotive parts retailer Velocity Source (a venture he was able to sell) and inVision Projects, an architectural design rendering company.

Unlike the South by Southwest Interactive competition whose finalists we mentioned earlier this morning, this contest just got underway yesterday and applications will be accepted until midnight the night of April 16th. This is an interesting approach to both small business fund raising and to spreading the awareness of the BizBreak app. If the winnings pot is going to grow, however, its going to take a lot of endorsement from the applicants since every thousand downloads will only add roughly $350 to the pot.

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Last month we brought you information about a promotional package available to startups at this years South by Southwest Interactive (SXSWi) event, a popular place each year to launch new products. This year SXSWi will be holding their second annual Microsoft BizSpark Accelerator competition where a recently released list of 32 finalist companies representing innovative web technologies, entertainment, and social media (both business and personal) will battle for the chance to be named one of four champions.

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Among the notable innovative web technology finalists is metaio, a company on the cutting edge of augmented reality whose new Unifeye Mobile software development kit was announced just yesterday. From the entertainment category is Are You Watching This?!, an innovative product that will notify you or your DVR if a sporting event might become an “instant classic” using algorithms and live stats analysis.

Most of the applicants, however, represented the two social media categories, including Mobile Roadie, a mobile app development service like iSites or AppMakr which allows for the fast creation of iPhone and Android applications. Another social media startup vying for one of the top four spots at SXSWi is the popular Sequoia Capital-backed mobile contact sharing serivce Bump.

After the first day, 12 companies – three from each category – will be whittled from the original 32 pitches by a panel of judges. On day two, these twelve finalists will compete to be the winner of their respective category. Brad King, Dean McCall, Chris Sacca, and Tim Street will host the event which will be held March 15th and 16th in Austin, Texas. Though it’s obviously too late to apply, startups should pay close attention to the innovative technologies that come from the competition and look into applying for next year’s event.

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Known by many as The Big Apple, and by some in the tech scene as Silicon Alley, New York City has been an international hub for media, art and business for decades. More recently New York has ebbed and flowed with the success and failures of the Internet startup culture, and is now well on its way to cementing its reputation alongside Silicon Valley as a driving global force in the industry.

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Settled in 1624, New York has a long and storied history of entrepreneurship, and in the 1990s the city was on the cutting edge of Internet and Web innovation. In 1993, New York became home to Prodigy, the first online service to provide access to the World Wide Web via a dial-up connection. Throughout the rest of the decade, Internet companies like Pseudo, Razorfish, DoubleClick, Yoyodyne, and Agency.com became the catalysts for an east coast startup gold rush. The most successful consumer Internet startup from this era was The Mining Company, which later became About.com – a site which is now owned by The New York Times.

New York’s media obsession began to enter the tech scene in the mid 90s as new media companies like @NY in 1995 and Jason Calacanis‘ Silicon Alley Reporter in 1996 began to take off. In 1995, The New York Times experimented with placing content on the Web during a visit to the U.S. by The Pope, and later launched a permanent online presence in 1996. In the same year, Fred Wilson, currently of Union Square Ventures, launched Flatiron Ventures which quickly became the cities leading VC firm of the early Internet era. The following year, online agencies like Razorfish began to consolidate and quickly acquired several companies, while others, like Total New York and Yoyodyne, sold to AOL and Yahoo! respectively.

As Wilson puts it, 1999 was the year that “all hell broke loose” in New York City for the Internet wave; major offline companies flocked to the Web, and dozens of smaller Internet startups went public or were acquired. According to Wilson, over 500 startups were founded in New York between 1999 and 2000; New York was the place to be, and everything was looking up without a hint of the impending dot-com crash. Wilson jokes that the peak of this era was epitomized in a television interview with Calacanis in which he suggested Harvard students take whatever remaining money they had and use it to start a tech company.

Over the next few years, New York and the greater tech community saw substantial declines with the dot-com bust, and it wasn’t until 2003 with the rejuvenation of new media that things started to look up for the city’s tech scene again. Blogging began to take off as specialty sites like Gizmodo and later Engadget launched in New York, spawning online media networks like Gawker, and the news sites of today like The Huffington Post.

Over the past decade, New York has pulled itself from the ashes of the dot-com crash and has risen back to the upper echelons of the top tech cities. The sheer size and density of the city has helped produce hundreds of startups, many of them, like Delicious, Tumblr and Foursquare, have become worldwide successes. In 2008, New York saw 116 startups receive funding, and in 2009 this number reached 150 – five times the amount the city saw in 1995. In comparison, Silicon Valley, which hosted 230 startups in 1995, saw just 336 receive funding in 2009 – a sign that the mecca of startups is beginning to reach critical mass while New York continues to grow.

In September of 2009, Fred Wilson spoke at Clickable’s Interesting Cafe and outlined why he thinks New York is unique from other startup cities like Silicon Valley, Boston or Boulder. Besides the city’s obvious penchant for media and business, Wilson says New York is in itself a lifestyle that promotes social interaction at the benefit of local startups like Foursquare and Meetup which encourage people to go outside. Another key identifying feature of the New York startup scene, he says, is the cities rich artistic culture. Wilson points to Vimeo, Tumblr and OMGPOP as examples of what he calls “the New York school of web design.”

Today, the Empire City boasts an impressive cast of startups and VCs, as well as a plethora of events and organizations geared at young entrepreneurs. Along with those mentioned above, some of New York’s extensive list of notable startups includes Boxee, Etsy, gdgt, Squarespace and College Humor. Funding these startups is the city’s many venture capital firms, including First Round Capital, Union Square Ventures, Spark, RRE and Founder Collective.

Entrepreneurs in the big city looking for a place at which to network with the thousands of startup enthusiasts can choose from any of a number of available events, including the NY Tech Meetup, nextNY, Social Media Week, Startup Weekend New York and the Brooklyn Future Meetup. Local organizations like Echoing Green, NYC Seed and StartingBloc all provide excellent resources for different types of early-stage startups in New York. The Open Angel Forum is another event and organization that will hold its first New York chapter event in April with continuing events every three to four months. The NY Tech Meetup, which began with a small group in the back offices of Meetup in 2005, now holds monthly sessions and has exploded to include over 10,000 members.

First Round Capital entrepreneur-in-residence Charlie O’Donnell is deeply involved in the seed-level startup community in New York, serving on the board of the NY Tech Meetup, founding nextNY and being one of two chapter heads of Open Angel Forum New York. O’Donnell, who compares New York’s storied tech history to the various “iterations of the Matrix,” says the current version of the startup scene is supported both by early tech adopters and by veteran entrepreneurs from the early Internet days.

“Early Twitter users helped connect the scene – especially around places like the Shake Shack in Madison Square Park, which played host to many a Friday lunch outside between startups and investors alike,” O’Donnell tells ReadWriteWeb. “What’s great though is that the current iteration of the community is also supported by veterans of those early days – like Fred Wilson, Kevin Ryan, Dave Morgan, and Scott Heiferman.”

As for the future, things are looking up for New York as the city continues to churn out successful startups at an increasing year-over-year rate. Some wonder whether New York’s critical mass is higher than that of Silicon Valley, where innovation has seen a slight downturn coupled with significant job loss. O’Donnell predicts continued productivity in New York, “enough to make folks stand up and take notice,” he tells ReadWriteWeb.

“What I’d love to see is for the [New York] scene to more fully develop the bench players needed to support more startups: like product managers, interface designers, etc,” says O’Donnell. “And for the educational institutions to catch up and start producing students that have skills that local startups can use.”

Additions and developments such as these will only help to boost New York’s already booming startup scene into a future of prosperity. There will likely never be another city with quite the same dynamic as Silicon Valley, but New York is making the best run to be the de facto alternative with its own unique set of advantages.

Photo by Flickr user Marco Arment.

Thanks to Charlie O’Donnell for much of the background information about the New York tech scene history. Additional information and statistics came from Fred Wilson’s 2008 keynote at the Web 2.0 expo, as well as Michael Karnjanaprakorn’s extensive list of companies, VCs, events and organizations from New York.

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The blog iPhone Alley reported Monday night that Square, the forthcoming mobile credit transaction service co-founded by Twitter’s Jack Dorsey, will launch early this summer for the low price of $1. By plugging a small square card reading device into the iPhone’s headphone jack, anybody with the device can instantly conduct credit card transactions using the service’s iPhone app.

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Usually, running credit card transactions means opening up a special merchant bank account and dealing with various fees. Any bank account will work with Square, and the only charge to use the service is $1 for the application and the card reader accessory; however, Square can afford to give away the dongles because they will be banking 2.9% of each transaction. Users can also pick their favorite charity and Square will donate a penny to it from its cut of each transaction.

Not only could this app be the new best way to pay back your friend who bought your drinks at the bar, but it could also become a killer app for small businesses. For just $1, anybody can have the functionality of a full blown credit card reader on their phone. Small merchants won’t have to resort to dealing only in cash, and record keeping would be made simple with the service tracking each receipt. Square recently produced the introductory video below to familiarize people with the service (with some awesome use of motion graphics, I might add).

A similar device and service from mophie called “marketplace” plans to bring a credit card scanner to their popular line of iPhone cases. Using this device would mean being stuck with a mophie case, and while the price has not been announced, mophie’s cases can range from $10 for a basic hard case, to $100 for their battery pack cases.

Frequent users, however, might be more accepting of a case implementation like the mophie over a small, easily losable dongle like Square. Square’s website says the accessory works with “any device with an audio input jack,” which means the app will likely work with the iPod touch and iPad as well. One question mobile skeptics may have for both of these services is how it will work if the device is lacking an internet connection or cell signal; can payments be cued up to send at a later time?

Is Square going to be your startups mobile credit app of choice? Or will you be going with the mophie or a similar product? Will these apps even take off? Let us know what you think in the comments.

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Over the past few months, we here at ReadWriteWeb have been hard at work putting together our upcoming premium report on marketing in the augmented reality (AR) space. From our research we’ve discovered that for several years, desktop “webcam AR” developers have made created multi-million dollar businesses while the younger “mobile AR” companies have yet to really break the bank. Today, however, Dutch mobile AR company Layar may change the mobile AR landscape, as it has announced it will allow developers of AR layers to monetize their creations on the Layar platform.

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Of the major mobile AR browsers, Layar, available now on Android phones and making an anticipated return to the iPhone later this month, has the widest selection of content to browse through. In a press release today, the company boasts 375 active layers, 1200 layers in development, and over 1 million users of its application.

Previously, businesses could create their own layer and place it in the free Layar directory; now those same business can reap the commercial benefits of augmented reality. When the service launches in March, Android users will be able to purchase layers from directly within the Layar application, and the iPhone version will likely make use of the in-app purchase function.

“Layar will facilitate global mobile payment processing and distribution in all currencies,” the company announced today. “Producers can fully focus on content – without having to worry about mass market distribution, developing for multiple mobile platforms, or financial administration.”

Layar is not the first company to attract commercial AR content, but they are the first to create a platform for businesses to sell their content through Layar. In the past, Layar and other AR browsers like Wikitude and acrossair have provided commercial content on their browsers, but now businesses can put a price tag on their content at the individual level, not just on partnerships with the browsers.

Layar also announced today that the company had boosted its capital, raising $3.4 million in funding from Sunstone Capital and Prime Technology Ventures. Just as Apple created the App Store ecosystem on the iPhone, Layar will be providing an opportunity for businesses small and large to take advantage of its rapidly growing AR platform.

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It’s coming up on three weeks since Apple announced its highly anticipated iPad device, and the news frenzy surrounding the announcement has begun to die down. As is the trend with many new devices, the response to the iPad has covered both extremes, from fans who claim the device will change the world, to haters wondering why anyone would spend a dime on it. One thing that is certain is that iPhone application developers are excited by the possibilities provided by the new tablet device, and now a new fund raising collaboration, AppFund, is looking to capitalize on this excitement.

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AppFund is a joint venture of Daniel Klaus, the co-founder of Music Nation, and Kevin Wendle, co-founder of CNET, E! Online and one of the six founders of the Fox Broadcasting Company. Depending on the complexity of each deal, the pair of execs plans to provide anywhere from $5,000 to $500,000 towards the development and marketing of iPad and tablet device applications – a market they believe will “revolutionize entertainment, games, content, and communications.”

“This year alone Apple is reporting that iPhone applications will grow to over 200,000,” the duo said in a press release. “In that there is an expectation that developers will port their ideas to the iPad, we look forward to providing funding and thought capital to the entrepreneurs willing and able to harness this new and exciting marketplace.”

While this is an interesting collaboration of these two media and Internet executives, AppFund is not the first of it’s kind. Just two short days after Steve Jobs’ iPad announcement, we told you about the Northern Film & Media which would be looking to provide up to $64,000 to U.K application developers for iPad apps. The New York-based AppFund says they are willing to consider ideas both domestically and from abroad and is encouraging those with app ideas to submit them soon; they plan to help release several apps for this summer.

Ever since Apple set the standard in the smart-phone market, the company has high expectations placed on them for their devices – expectations some say Apple has failed to surpass with the announced iPad. Still, the success or failure of the iPad is still yet to be determined. Will we see the long lines forming outside of Apple stores before the device’s release? Or will the price be too high to penetrate the market the same way the iPhone has? AppFund is banking on the former.

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In last week’s installment of Weekend Reading we discussed the engaging social media marketing and brand development A-to-Z guide Crush It! from Gary Vaynerchuk. From that we learned that blogging is just one of many ways to reach your customers, but the subject is so important itself that it deserves its own book; that’s exactly what we’ve got this week. From Eric Butow and Rebecca Bollwitt, this week’s selection is Blogging to Drive Business: Create and Maintain Valuable Customer Connections, an overview of the tips and techniques needed to excel at business blogging.

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Earlier this week we provided our own 6 Approaches to Your Company Blog and mentioned that “corporate blogging” is moving up the “slope of enlightenment” to the “plateau of productivity” on the 2009 Gartner Hype Cycle. Basically what this means is if you have a business that isn’t blogging, you’re about to miss the boat, so you’d better hop on before it leaves dock.

The book is co-authored by Rebecca Bollwitt, a Vancouver-based blogger and podcaster at Miss604.com, and Eric Butow, CEO of a Web design and e-marketing firm and author of twelve books like User Interface Design for Mere Mortals and How to Succed in Business Using LinkedIn. This 162 page book is broken into nine easily digestible chapters; the longest chapter at 26 pages is appropriately devoted to “Creating a Blogging Stategy,” which includes descriptions of popular blogging platforms, the various media used in blogging, and integrating your blog with the top social networks. The book also includes an index, which is handy for finding specific topics and issues.

Besides covering the common subjects around corporate blogging, such as why its important and how to market it correctly, Butow and Bollwitt provide lesser heard tips, like how to use internal corporate blogging and how to decide who will actually be authoring the blog. Another intriguing issue the book chronicles is how to deal with blog commenters, especially the negative ones.

“Negative comments might not necessarily need to be deleted unless they are defamatory, libelous, or anything similarly malicious,” the book says. “However, if comments contain negative but productive feedback, you should respond in a courteous manner.”

It’s tempting to begin moderating negative comments and banning users, but this should really only be done in the most extreme of situations. It’s important that your readers (who are most likely also your customers) be able to trust your public voice on the blog. If non-malicious but negative comments are continuously deleted, readers will lose this trust. The best thing a business can do with negative comments is to respond to them promptly and politely.

The best bloggers are avid blog readers, so make sure whoever is writing your business’ blog is following what other businesses are writing about. This will also help someone new to blogging develop a writing style that is native to the Web and not full or jargon and business-speak. They can also take the next step and leave a comment on the other blogs, which not only helps spread the word about your brand, but increases your reputation as an active participant in the community – just be careful how you do it.

“Only leave a comment when you genuinely have an interest in the post and can contribute something productive,” the book says. “Simply leaving a link to your site and saying you also wrote about a certain topic can easily get your comment flagged as spam.”

All the important bases are covered in the remainder of the book, including how to create a blog with an appealing design, finding topics to write about, monitoring the Web for when people talk about your brand or blog, and how to optimize your blog for search engines and blog lists. The cover price is $21.99 but discounters like Amazon have the book listed at under $16 for the paperback, and $9.99 for the Kindle version. The paperback version also includes a free e-book accessible online for 45 days after purchase.

Disclosure: A review copy of the book Blogging to Drive Business: Create and Maintain Valuable Customer Connections was provided to ReadWriteWeb by Pearson Education, Inc.

Photo by Flickr user racheocity.

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In January, the Austria-based company Mobilizy updated the Android version of its mobile augmented reality browser Wikitude to include a new feature they dubbed “Worlds,” which are similar to the layers found in the alternatively popular Layar AR browser. On Thursday Wikitude 2.0 for the iPhone (version 4 on Android) was released on the iTunes App Store, brining these new Worlds to the iPhone.

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Previously, Wikitude only served up geo-tagged Wikipedia articles, or content created on the Wikitude.me online service. With the addition of Worlds, users can now also browse locally for Twitter posts, Flickr photos and YouTube videos – the usual AR suspects. Also, local search points-of-interest (POI) are available through Google Local Search, CitySearch and Qype, but actual search functionality is not included.

This new verison of Wikitude also marks the browser’s first commercial entries as users can find the nearest Startbucks, Walmart, Harley Davidson or BestBuy locations using the various World filters found on the applications new “Overview” home screen. Some of the Worlds, such as Last.fm events, Meetup Events and Outside.in content, are unique to Wikitude and are innovative inclusions for AR browsing.

First released for Android phones in October of 2008, Wikitude was the very first mobile augmented reality browser to hit the market. Since then Layar, acrossair and hundreds of other mobile AR apps have upped the ante in the mobile AR space, and the latest iteration of Wikitude is in direct response to this competition.

Wikitude’s updated features follow a continuing trend in mobile AR to consolidate a group of applications into a single AR browser-like experience. Mobilizy previously produced the AR application C2 YouTube for the iPhone, but has moved that functionality into Wikitude.

Additionally, acrossair’s AR browser now includes features like Twitter and Wikipedia entries, which were previously features in their own independent applications. French iPhone app development house Presselite, which made waves with its Metro Paris Subway app, and other transit applications, has since rolled its applications together into the Bionic Eye application. It’s only a matter of time before these companies begin rolling games and entertainment, a growing AR sector, into their browsers for one-stop augmented reality experiences.

Mobilizy, Layar, acrossair, and Presselite now have comparable AR browsing applications with Tonchidot not far behind with its more social app, Sekai Camera, the most popular AR app in Japan. Competition is certainly a good thing when it comes to mobile AR, and the deal-breaker in the coming months and years for most users will likely be the commercial content found on the applications.

Which mobile AR application do you like best? Let us know what you think in the comments.

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Personal investor and Hunch CEO Chris Dixon posted an interesting article yesterday titled, Every time an engineer joins Google, a startup dies. The gist of the article is that Dixon believes venture capitalists should be doing more to keep the top entrepreneurial whiz kids from seeking jobs at big companies like Google or Goldman Sachs because larger companies aren’t driving innovation as much as startups do. Innovation, he says, is the key to improving low VC returns over the last several years, not scaling back investments as others have suggested.

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“As much as we like to think of our culture as being entrepreneurial, the reality is 99% of our top talent doesn’t seriously contemplate starting companies,” writes Dixon. “Nothing is more motivating and inspiring than the sense of ownership and self-direction only a startup can provide.”

Dixon’s post has attracted well over 100 comments, spurring a fascinating discussion of the current state of the VC industry. The theme amongst the comments seems to be the question of whether or not the VCs are doing enough to make sure top talent doesn’t slip away to large companies with higher salaries and more benefits. Have VCs been caught sitting on their hands?Some suggest that VCs become more like Y Combinator and TechStars, more actively recruiting talent instead of playing the waiting game.

“It’s absurd that [VCs] are just waiting around for projects to climb their way up the ‘get your project pulled together enough so it’s investable’ cliff and then cherry picking,” says one commenter.

Another commenter suggests the VCs could send a message by funding the top talent individually as ‘post-grads-in-residence’, while some say they should increase their presence on college campuses to compete with the larger companies which have connections through career services departments. Others blame the innovation slump on culture, saying that kids grow up being told they working for larger companies is their one-way ticket to success.

“I’ve seen many cases where a young person is deciding between say Google and a startup and basically their parents say they are crazy to go with a company they’ve never heard of,” writes Dixon in the comments.

Is a cultural shift in order to teach students that entrepreneurship is as smart (if not smarter, as some would argue) a path as joining the ranks of big companies? This is already happening to a certain level as more colleges offer entrepreneurial degrees, but certainly an increased VC presence on college campuses (not to mention high-school campuses) couldn’t hurt to spur those efforts either. Obviously changes can’t occur overnight, but as parents begin teaching their children that wanting to be the next Evan Williams is as good an aspiration as wanting to work for Google, more graduates will leave college ready to embrace the startup community.

Be sure to give Dixon’s article and its comments a good read, as both are filled with intelligent and thoughtful insights. Also, be sure to let us know your thoughts here in the comments below.

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For years Silicon Valley, the U.S. city at the forefront of innovation, has seen continued job creation, but the 2009 recession was too powerful for even the strongest of economies. According to the 2010 Index of Silicon Valley, a report released today from Joint Venture: Silicon Valley Network and the Silicon Valley Community Foundation, the city is seeing its worst declines in employment, venture funding, and government procurement in years.

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In 2009, San Mateo and Santa Clara Counties lost 90,000 jobs, returning the area to employment levels not seen in 5 years. Silicon Valley jobs fell faster than the average national employment rate of 3.8%, but this could be because the region held out longer than others in terms of job loss. Emmett Carson, CEO of the Silicon Valley Community Foundation, says the downturn is due in part to a dwindling amount of foreign talent coming to the Valley.

“On the heels of the worst economic year since the Great Depression, our region has entered a new era of uncertainty in which our ability to attract top talent, fund innovation and preserve a decent quality of life is no longer guaranteed,” says Carson.

Echoing a national trend, innovation has lost steam in Silicon Valley also, as both venture funding and patent applications fell from 2008 to 2009. With substantial job loss and the construction of new office space, commercial office vacancies saw their highest numbers since 1998, rising 33% in 2009 from the previous year.

Adding insult to injury, government procurement also continued its slow decline in Silicon Valley, dropping 2% over the last 15 years, while other cities like Washington D.C. and Huntsville, Alabama, have risen 7.2% and 4.5% respectively over that same period of time. Russell Hancock, CEO of Joint Venture, says the future of Silicon Valley is for the first time uncertain and at risk.

“Silicon Valley’s innovation engine has driven the region’s prosperity for 60 years, but at the moment we’re stalled,” said Hancock. “What’s hard to say is whether we’re stuck in neutral, which has happened before, or whether it’s time now for a complete overhaul.”

With the global economic slide, it only makes sense that Silicon Valley is too feeling the pinch, and it also doesn’t help that California’s state government is struggling to provide economic stability for its citizens. While Silicon Valley is a strong economy that will likely rebound with the rest of the nation from the “Great Recession,” if these trends continue for too long, a new technological hotbed could one day dethrone the king.

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An initial public offering, or IPO, is when a company opts to trade its shares publicly on the stock market – a decision that can be a risky investment. At times, unprofitable startups go public in hopes of reversing their situation, but most of the time IPOs come from the profitable startups looking to expand their value. Based on some fascinating new data visualization tools released today from Tableau Software (see note below), an intriguing trend has emerged among profitable and unprofitable IPOs.

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Editors Note: This is the first of a four-part content series ReadWriteWeb is producing in partnership with Tableau Software, where we examine interesting data sets relevant to technology trends today. You can use Tableau Public to create interactive visualizations like this and publish them to your own blog, web sites, or anywhere online. You also can embed this (or any other Tableau Public) visualization on your own site.

As Tableau has shown previously, software IPOs have been few and far between in last decade; only 77 companies went public between 2001 and 2009, while 174 software IPOs were seen between 1998 and 2000 alone. A new data visualization from Tableau embedded blow reveals that in the short term, unprofitable companies that go public tend to perform better than profitable IPOs.

Below is an interactive chart produced by Tableau; the orange and blue lines represent the average returns of unprofitable and profitable software IPOs over time since the beginning of their offering. The selection boxes near the upper-right corner allow you to narrow the chart to specific decades of data, and using the slider below that allows you to focus the range of days since IPO. If you adjust the slider to near day 600, you will see that at this point the companies which were profitable at the time of their IPO finally surpass the unprofitable ones.

It seems that unprofitable companies (roughly 37% of sampled companies) see an initial boost from returns after their IPO, reaching 86% returns in their first year. However, after about a year and a half, these companies run out of steam and linger around the 100% before plummeting around day 666 (an unfortunate coincidence, surely). Profitable companies, on the other hand, see slower but steadier return growth, taking two years to reach levels their unprofitable counterparts reached in just one.

Pulling the date range slider out further, we can see that profitable companies continue to prosper for several years after their IPO while unprofitable companies see much less and much slower growth compared to their first few years on the market. The lessons learned here is that while going public may be an attractive solution to an unprofitable startup company, its not a long term one. Much like the hare from the classic children’s fable The Tortoise and the Hare, unprofitable IPOs, on average, have a great start only to eventually be surpassed by the slow and steady tortoises that are profitable IPOs.

The data visualization embedded above is provided by Tableau Software, which today released its new free product, Tableau Public, allowing for the creation and sharing of unqiue, rich, interactive data applications.

“It’s a way a blogger or writer can give their readers exactly the content they want,” says Tableau. “No plug-ins or programming skills are required for either creating the viz or having it render in a browser. A free tool like this could bring badly needed intelligence, beauty and speed to structured data especially as it proliferates all over the web.”

Photo by Flickr user nDevilTV.

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In a new study released by Ernst & Young and Dow Jones VentureSource, cleantech startups focusing on energy efficiency raised more from venture capitalists in the last quarter of 2009 than those working on electricity generation. While fewer dollars were spent from the third to fourth quarters, more investments were made, especially in the energy efficiency category, suggesting more focused investments.

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While investment in cleantech startups as a whole dropped 45% from $868.5 million in the third quarter to $564.5 million in the fourth, the money was refocused into energy efficiency, which nearly doubled from $133.7 million in Q3 to $252.8 million in Q4. Energy generation companies, Q3’s leading cleantech investment category at over $300 million, was dethroned in Q4 as they fell 62% to $118.5 million.

51 total deals in Q3 rose 21% to 62 deals in the final quarter of 2009. Energy efficiency leap-frogged energy generation, gaining 8% more of the total deals between quarters, while energy generation lost 12% of its share. Ernst & Young cleantech director John de Younge says these numbers signify a shift from the expensive nature of the solar companies, which dominate the electricity generation sector, to less fiscally demanding energy efficiency companies.

“Energy efficiency is in the sweet spot of many venture capital investors in terms of skill sets and funding parameters, particularly given its basis in information technology,” says de Younge. “Consequently, we may see investor participation in cleantech broaden.”

This trend echoes that of overall VC investments which saw an increase in the amount of deals along with a drop in value from Q3 to Q4 of 2009 – a clear sign of investors more carefully spending their funds. Cleantech, and more specifically energy efficiency startups, could see even further growth in 2010 as venture capitalists are set to spend even more in the first part of the year thanks to a boost in funds raised at the end of 2009. Even if the VCs decide to remain cautious as they did at the end of 2009, they seem to be taking a shining to the energy efficiency startups, so it wouldn’t be surprising to see continued growth in that sector.

Photo by Flickr user NeoGaboX.

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As struggling newspapers file for bankruptcy left and right, the quest is on to find the new business models for news consumption in a new digital age. Recently the New York Times announced that it has begun investigating and testing a system for placing some of their content behind pay walls based on a daily allowance of free articles, but this may just be a new spin on an old trick. Entrepreneurs are needed to help the news industry as it shifts online, and that’s precisely who the Knight Digital Media Center (KDMC) is targeting for an expenses paid seminar this May.

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The KDMC is a partnership funded by the Knight Foundation between the USC Annenberg and the UC Berkeley Graduate School of Journalism. Hoping to discover the next Adrian Holovaty, founder of local news aggregator EveryBlock; or David Cohn, creator of crowd-funded reporting site Spot.Us; the KDMC will be hosting the 2010 News Entrepreneur Boot Camp.

“This intense one-week boot camp is designed for 20 competitively selected digital entrepreneurs with great ideas for community news and information initiatives in the public interest,” a description on the KDMC homepage says.

Accepted applicants will be provided with food and lodging for the week-long seminar as well as a stipend to assist with travel costs. The KDMC will be bringing in expert professionals and professors to speak at the seminar and provide “coaching and virtual-learning during a six-month follow-up period.”

For media entrepreneurs with an idea for changing the way media is consumed and monetized, this forum could be a valuable opportunity to receive feedback and network with other like-minded individuals. As new platforms like the iPad add to the mix of new media opportunities, perhaps all that is needed are some entrepreneurial minds to stir the pot. The KDMC is taking applications now, and the deadline to apply is February, 19.

Photo by Flickr user katerha.

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