Author: Gregory T. Huang

Gregory T. Huang wrote:

Tired of Seattle-area tech startup events? Well, get ready for a whole new one. It’s coming April 26, and it has been a closely guarded secret until now.

The event is called Twiistup, and it was started in Los Angeles by AOL executive Mike Macadaan in 2007. Think of it as a tech conference with Hollywood flair—six-figure budgets, multi-day events, and massive parties—a bit like TED, with star speakers, albeit a heavier emphasis on entrepreneurial networking.

I recently learned that last year, a group of prominent Seattle-area tech investors, including Andy Sack, Geoff Entress, Andy Liu, John Cunningham, Bob Senoff, David Niu, and Neil Patel, bought Twiistup for an undisclosed price. That means they acquired the brand, the website, and, crucially, the e-mail list of participants. Now they are bringing a lower-key version of the event to Seattle, called “startup sessions,” beginning on the evening of April 26 at the Olive 8 hotel. It will start out as a monthly event, aimed at tech entrepreneurs and investors.

Patel, the Internet marketing whiz kid from Orange County, CA, is leading the effort. He has been living in Seattle for the past year, where he is involved in several startups, including BuddyTV, Cheezburger Network, WhitePages, and Liquid Planner. He’s also a limited partner in the seed-stage investment fund Founder’s Co-op, and has invested in about 10 companies overall (at the ripe age of 24).

“Our goal is to really educate” entrepreneurs, Patel says of Twiistup in Seattle. “We want to help different types of companies grow.” He adds, “The goal is to start doing bigger events all around the U.S., where there are strong communities that don’t have enough local events” that emphasize the networking and educational aspects of starting and running tech companies. (The networking should also help potential investors, including the new Twiistup owners, find promising people and companies.)

So far the group has backed two events in the LA area, and is also working on a New York event. I asked Patel what Twiistup can bring to Seattle, to go beyond what is already a crowded tech event field that includes the Northwest Entrepreneur Network, Washington Technology Industry Association, University of Washington, MIT Enterprise Forum, Seattle Tech Startups, Seattle 2.0, Lunch 2.0, nPost, and media organizations like TechFlash and Xconomy. (And add to that the new entrepreneur training sessions from Founder Institute and TechStars.)

“Seattle needs something more educational,” Patel says.

To that end, the April 26 event will feature Entress and Sack—two of the best-known tech investors in town—talking about the crucial steps in how to raise capital from angel investors. They will cover only the most important aspects—including how to get to know potential investors. (Patel says all the deals he has invested in have been either with people he already knew or through his friends.) Attendance is limited to about 90 people, and the event will have an hour-long networking reception with food and an open bar.

Comments | Reprints | Share:  

 
 
 

Gregory T. Huang wrote:

Seattle-based Recruiting.com has been acquired by Boston-area-based talent management firm Zapoint for an undisclosed sum. I confirmed the acquisition this afternoon with Kate Gerber, director of sales and marketing for Recruiting.com, formerly called Jobster, which makes online software for recruiters and search tools for job seekers. The news was reported earlier today by TechCrunch and TechFlash, the latter of which has comments from Jeff Seely of Recruiting.com and Chris Twyman of Zapoint.

Gerber declined to comment on how many employees at Recruiting.com are affected by the acquisition. She said only that further plans for Recruiting.com have not been disclosed yet. Gerber said she has been on the job for about six months. I have heard elsewhere that the firm is down to about 10 people, after a series of layoffs. (The company had about 25 employees as of November 2008.)

Recruiting.com changed its name from Jobster last year. The company, founded in 2004, had previously raised more than $50 million in venture capital from investors including Ignition Partners, Trinity Ventures, Reed Elsevier Ventures, and Mayfield Fund—so it’s hard to imagine how this company could have generated anything close to a positive return on investment. But several former Jobster alums have gone on to do productive things, founding startups around Seattle and beyond, including Urbanspoon (now owned by IAC), Socialmedian (now owned by Xing), and Bacon Salt (still making everything taste like bacon).

Zapoint was founded in 2007 and makes online software and tools to help employers and job seekers find each other and manage their careers. The company raised a Series A round in 2008, led by HFF Investments.

Comments | Reprints | Share:  

 
 
 

UNDERWRITERS AND PARTNERS

Gregory T. Huang wrote:

Seattle-based venture firm Maveron announced today it has invested in a $1.25 million financing round for Latimer Education, a company based in Washington, DC, that is developing an online university focused on African-American students. Angel investors and the company’s founders also participated in the round. Jason Stoffer and Amy Errett from Maveron are joining Latimer’s board. In the online education sector, Maveron has previously invested in Capella Education Company, Livemocha, and Altius Education.

Comments | Reprints | Share:  

 
 
 

Gregory T. Huang wrote:

This week, I’ve learned a lot about game-changing ideas and how to think about making them work. Like anything meaningful, some of the lessons will take more time and effort to sink in. But here are five lessons to take away from our Xconomy Forum (“What’s Your Breakthrough Idea”) held at the University of Washington on Monday:

1. Not everything is, or should be, a breakthrough idea. Nick Hanauer of Second Avenue Partners framed the whole discussion by pointing out that entrepreneurs have different motivations: some might want to make a lot of money whether or not they change the world; others may want to change the world whether or not they make much money. Either approach is perfectly valid; just be true to yourself.

2. Venture capital alone won’t sustain breakthrough ideas. VCs don’t fund new ideas or the invention process, said Nathan Myhrvold of Intellectual Ventures. Instead, they fund “zillions of ‘me-too’ ideas,” he said. Which is why Myhrvold is trying to create a new “invention capital” marketplace—and why his company has awarded $315 million to individual inventors in the U.S. and has deals with more than 100 universities to support the invention process.

Meanwhile, Hanauer told me last week that most VCs don’t take risks anymore because the VC business model rewards those who can simply avoid a major screw-up. “The business model is toxic to risk-taking, because it’s so unbelievably profitable for the partners just if it doesn’t fail,” he said. (Of course, VCs will tell you that their model isn’t broken—because it isn’t.)

3. The proper mindset of breakthrough-idea thinking is to be “narrowly insane but not a total whack job,” as Myhrvold put it. By narrowly insane, he meant that inventors need to be crazy enough to think they can do something unprecedented, without being delusional. Put a different way, it’s helpful to be a “high-functioning contrarian,” as Hanauer says Jeff Bezos has described him. (“A low-functioning contrarian means you’re in prison,” Hanauer adds.) In other words, try to see the world differently, and imagine what would happen if things were arranged in other ways. Amazon.com, for example, delivered more than 10 times the selection of a brick-and-mortar store at a cost savings of more than 25 percent. That’s the kind of thinking that can transform an entire industry—in this case, those who sell books (for starters).

4. Part of being a good entrepreneur means not listening to your critics, or the entrenched interests. As Lee Hood from the Institute for Systems Biology and Integrated Diagnostics put it succinctly (I’m paraphrasing), people have seriously doubted him six or seven times in the past—and he’s been right every time. (He didn’t say how long it took to be proven right.) But the basic message was that if you want to change the world, you will meet with resistance—the people and companies in power don’t want things to change—but don’t let that deter you. Hanauer stressed the importance of …Next Page »

Comments (2) | Reprints | Share:  

 
 
 

Gregory T. Huang wrote:

TechStars, the mentoring program and seed-stage investment fund for technology startups, is now taking applications for its new Seattle program. The application form is here, and the deadline is June 1; finalists will be notified on June 16, and the Seattle program will go from August 16 to November 12, 2010. TechStars Seattle executive director Andy Sack recently posted a personal account of how the program came to Seattle from Boulder, CO, and Boston. Sack and TechStars co-founder Brad Feld will host an informal gathering for interested entrepreneurs on the morning of April 6 at Louisa’s Cafe in Seattle.

Comments | Reprints | Share:  

 
 
 

Gregory T. Huang wrote:

Yesterday, we ran the first part of a sit-down interview with Nick Hanauer, a noted entrepreneur, investor, and co-founder of Seattle-based Second Avenue Partners. Hanauer, who has been involved in the early stages of such prominent companies as Amazon, aQuantive, and Insitu, spoke about the importance of new metaphors in recognizing and understanding breakthrough ideas; why venture capitalists don’t take enough risks; and the challenges of healthcare reform.

In what follows, Hanauer talks quite a bit more about Amazon, Insitu, and how to think about solving the biggest problems in business and society (hint: don’t conform). He also touches on why he’s generally bored with the online advertising sector (except for Seattle-based Marchex), and the one key area in which he would seek omniscient advice.

Here is part two of our interview:

Xconomy: What are the prospects for another big tech company like Amazon to come out of the Seattle area?

Nick Hanauer: I think the prospects are very good. It’s a very dynamic, creative, and risk-tolerant business culture here. There’s a fabulous ecosystem of people who understand technology in all sorts of ways. There’s software, Internet, biotech, aerospace. Insitu, as an example, is a big company now. And in 10 years, that could be a huge company. I think they employ 600-700 people now. We [Second Avenue Partners] don’t own it anymore, Boeing owns it, sadly. We have as good a shot at creating more big technology companies as almost any place on planet Earth. Probably not as good as Silicon Valley, but better than most places.

X: Tell me more about Second Avenue’s involvement with Bingen, WA-based Insitu, and when you first invested in it. (This company makes unmanned aircraft systems for surveillance and intelligence applications.)

NH: It wasn’t the first round of financing, but they were a teeny tiny company, employed half a dozen people. We looked at it in June or July 2001, and they were like, “Fishing, we’re going to find tuna with cool planes.” We thought it was really interesting technology. [CEO] Steve Sliwa was so good. We got that if they could pull off this technology in this domain, there are an infinite number of applications. And then [September 11, 2001] hit. And we said, oh. The military’s going to buy a lot of these. OK, we’re in. We led that round, and kept on backing them. I’m sad that we sold it, because it was such a civic achievement; it made such a difference in the lives of so many people. It’s maybe the single biggest thing to happen to that region of Washington and Oregon economically in decades. We were very lucky [with the Boeing sale], there was this incredible global bidding war going.

X: How should one learn to think about solving big problems in business and society?

NH: I think the capacity to think creatively isn’t gated by your intellectual abilities so much as your psychological ability to not conform to what other people want you to believe about …Next Page »

Comments | Reprints | Share: