Jeff Lawson pitches me at my local Starbucks in 2008

It is one of the reasons why the company raised a whopping $70 million in new funding from Bessemer Venture Partners and Redpoint Ventures, who co-led the most recent round of financing. The company has so far raised a total of $102.7 million in funding in three rounds. Its early backers include Dave McClure, Chris Sacca, Founders Fund, Manu Kumar, and Union Square Ventures. That is quite something for a company that got turned down by twenty odd investors before the first dollars rolled into the bank account.

My sources tell me the company — while still unprofitable — is growing at break-neck speed and is on track to do $50 million in 2013 revenues.  While it doesn’t have profit margins that are as rich as classic software-as-a-service companies, it still has a gross margin in excess of 45 percent. This scorching growth is one of the reasons why the company is now valued at close to $500 million.

An initial public offering is a distinct possibility, although I also wonder if Amazon will bring Jeff (who in a past life was chief technology officer of StubHub) back home by buying this company. In a nutshell, Twilio is a cloud-based communications platform that allows app developers to add voice and texting capabilities to their applications by including a few lines of code.

We, in Silicon Valley, collectively celebrate the fast and the furious, the pretty and the sexy, the nouveau. Somehow we have lost appreciation for the simple fact that it takes (what seems like a lifetime of) agony, sacrifice and ingenuity to build something of lasting value. And that is the reason I wanted to tell the story of Jeff is because he has done what very few founders get to achieve — to build what it seems is a business that has stayed true to its roots and succeeded by helping others succeed.

The Telecom Disruptor

I was introduced to Lawson by McClure, who had been helping me in the early days of GigaOM and started jumping up and down, insisting I meet Jeff. So, I did. And as Jeff sat next to me in my favorite Starbucks, giving me the pitch, I couldn’t help but think to myself: Twilio looks like a dozen odd startups, that were providing voice APIs and betting on telecom minutes arbitrage.

As someone who had been following voice-over-the-internet and telecom for over a decade, I knew it was a sucker’s game and it would take a lot more than just founder-bluster to build a real business. I guess that skepticism is a natural byproduct of watching an industry chase pennies.

Apparently, I wasn’t alone: Lawson met a total of twenty angels and VCs and they all were not keen on his company. He didn’t care and just launched the product right after the 2008 financial crisis had hit. Of course, what I had missed was that this was a non-telecom guy who was  fed up with the telecom industry’s practices.

In his previous life, he had wanted to find a simple way to add communications into his businesses’ work flow much like he would add code to his software. Instead he was left dealing with expensive contracts and massive gear, which he didn’t need. He and his two co-founders (Evan Cooke and John Wolthuis), essentially set-out to replace that archaic architecture. They saw what Amazon was doing with its cloud platform, and they wanted to do the same for communication. ”The company started to meet our own needs,” said Lawson, a 35-year-old quirky and charming engineer from Michigan.

Hackathons Rule

Photo of Jeff Lawson at a company event, courtesy of Twilio via Flickr

Despite strong competition from more entrenched companies, Twilio kept plugging along. They stayed hyper-focused on developers. Quite a few of my friends were playing around with Twilio and built very basic apps on it. Others hacked together personal messaging systems. Some wanted to make voice-to-blog plugins. Twilio, it seemed, had found its people. We stayed in touch and we often wrote about this tiny company that kept beating the odds.

Our stories dovetailed again when they moved into the first GigaOM office on Pier 38, just after we moved out. That office had a lot of good karma (if not enough heat). It wasn’t until they offered an easy way to integrate SMS into their apps that their star zoomed.

Jeff jokes that while Amazon didn’t really have to work at finding their customers, Twilio had to seek out its potential customers. Enter, Hackathons!  ”The art of creating software and building new things was starting to get celebrated at these hackathons,” Lawson said. Twilio embraced the hackathons with gusto and became an active participant — where there was a hackathon, there was Twilio. I remember seeing Danielle Morrill, one of the early Twilio employees pretty much at every hackathon I attended — carrying the proverbial company flag.

My colleague Stacey Higginbotham wrote a prescient piece and observed:

…future isn’t voice, but apps that provide the context for the best means for communication. It may be voice, it may be video or it may be text, but Lawson (while not committing to anything beyond expressing interest in video) expects Twilio to be there on the back end enabling developers to offer communication with a minimum of fuss.

Over a period of time, Twilio turned their voice-inside-apps service into a platform and the apps based on that platform started to grow big, some almost overnight. One of them, GroupMe was acquired by Skype for $85 million. Another similar app, Beluga was snapped up by Facebook. Just as Amazon Web Services (AWS) was making it dead simple for startups to get started, Twilio was making it easy to add communications capabilities.

The success of GroupMe was the aspirational story that helped cement Twilio’s story into the app ecosystem. I guess, when you look back, the rise of iPhone app economy was the best thing that happened to Twilio, which saw a big boom in the number of developers using its messaging and voice platform. ”I see API replacing the dial tone,” says Lawson, who is convinced that the future of communications is through application interfaces.

In a blog post announcing the funding, one of Twilio’s new investors, Scott Raney, wrote:

Twilio is also a part of a broader trend towards services and APIs catering directly to developers.  More and more, developers are making critical decisions regarding the nature of the products they are building. Like Redpoint’s earlier investments in Heroku and Stripe, Twilio is at the forefront of this movement.

Since the heady days of Beluga and GroupMe, others have embraced Twilio and started to build their businesses based on Twilio’s services. I recently came across a company called SendHub, that has built a brian-dead simple phone and messaging system that marries two crucial trends — “bring your own device” and “distributed workforces.”

The premise behind this Silicon Valley company is pretty simple: if there are no desk-phones and employees are spread across the country, how can a PBX system invented for monolithic mid-20th century organizations be useful, regardless of the fact it uses voice-over-the-internet for transporting technologies? How can we think just about voice as a communication tool, when we are texting more, sharing files, doing conference and constantly tapping into the CRM systems. It reminded me of Google Voice, except reinvented for today’s needs.

In the past a similar company would have spent its entire first few years trying to build the network underpinning its business (think Google Voice & RingCentral), but these guys signed up for Twilio (and Amazon) and focused all there resources on building the new communication experience. It has allowed the company to start bringing in hundreds of thousands of dollars in sales.

Culture Defines Customer Experience

Photo courtesy of Twilio, via Flickr.

When I asked Lawson what has made his company work, he pointed to his company’s nine core values and how they add up to creating the best experience – whether it is for customers or for the employees. “Experience is how something makes you feel,” he said. “When you see a U2 concert, that is an experience and has a lasting impression.”Lawson is pretty convinced that Twilio’s model of customer acquisition and keeping them around works, mostly because they are hell bent on creating an awesome experience.

“Telecom services are worse than enterprise software,” he said. The industry wants to conduct a transaction before you as a customer taste any success. “We want you to succeed and then willingly conduct a transaction,” he added. “A transaction before success is stupid.” It is one of the reasons why they only have four-percent annual churn in their customer base.

“This is what creates the long term customer and that is what makes our model work.” In order to create that experience, Twilio has done a few unusual things. For instance, the company expects every employee (even non-technical ones) to create an app based on Twilio and also handle customer service for a few days. “It is because we want everyone to have empathy with our customers’ problems,” Lawson said.

The Evolution of the CEO

A company’s culture is set by its leader and that is why I find Jeff quite fascinating. A brilliant engineer, he has found a way to overcome the challenges of being an engineer-founder. When I asked him what has made him work, Lawson said his attitude has been: to adapt and reinvent. “I think you learn that what worked for past nine months when you were only 10 people doesn’t work when you are 30 people, so you adapt and learn [a] new way,” he said.

To illustrate the point I want to tell the story of the company’s mascot – an Owl. During its early days, the company fell in love with a Reddit meme about drawing an Owl. You draw a circle and figure rest of it out! That is how Lawson sees the company — there are no instructions. Just start, figure the rest of it out, learn and improve. And that is how he sees his job as the CEO.

Today Twilio is 160 people. By the end of the year it will be 200 people, but by then, Lawson said that he will have changed once again as a CEO and have learned to do things differently. “There is a new playbook every 6-to-9 months,” he said. “You just need to know what are non-negotiable values.”

“We are not telecom people and we don’t want to be those guys,” Lawson said. “We are hackers and [are] for the hackers.” That’s non-negotiable.

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A Berlin startup called Versus IO is trying to apply natural language algorithms in its product comparison service, and it’s just closed a $2.8 million Series A round to do so. The round was led by Earlybird Venture Capital and also includes Dave McClure, who previously invested $100,000, and angels Lars Dittrich and Dario Suter.

Right now Versus IO offers a relatively limited set of comparison types – it started with mobile phones only, and is slowly branching out into other types – but the company has great ambitions. As founder Ramin Far pointed out to me, comparisons are a regular feature of life:

“The market size is so huge. Whether you’re deciding which phone to buy or which city to move to, we compare all the time because we can reduce complexity. We started from this point, saying we just present the data, and that’s why we think the product is so successful. We will try to use the system everywhere.”

Of course, Versus IO isn’t the first outfit to go for data-driven comparisons: the big rival is FindTheBest, set up a few years back by DoubleClick founder Kevin O’Connor. However, while FindTheBest shows an admirable amount of data about each product, it’s still up to the user to interpret what he or she is shown. And, at least in my opinion, the range of data points on offer can be quite overwhelming as they are presented.

Where Versus IO has the edge here is in the simplicity of its design, but also the natural way in which results are presented. If, for example, I compare the Samsung Galaxy S4 with the iPhone 5, Versus IO spells out what each of the comparison points means in a qualitative as well as quantitative fashion.

Why not compare apples with oranges?

Looking at the data point of maximum exposure length on the smartphone’s camera, the service tells me that the S4 offers “definitely longer exposure” then explains what exposure means and why a longer exposure can be beneficial for night-time shooting. It also tells me that there are “a tad more apps available” for the S4 than the iPhone 5 – I’m not sure that’s true, but it does demonstrate the sort of presentation we’re talking about here.

What’s particularly nifty about Versus IO, and what makes its future so intriguing, is that you can compare items that are not like-for-like. How about comparing the iPhone 5 with a Canon camera, for example? It’s more useful than it may seem at first – many people will want to know if it’s worth buying a point-and-shoot when the camera in their handset is good enough for many circumstances – and it also demonstrates the generic nature of Versus IO’s data model.

The next step, according to Far, is for Versus IO to start being able to interpret and structure user-generated sentiment. It’s a breakthrough that’s “coming very soon”, he promised:

“The crowd has more wisdom than I. Let’s say tomorrow we’re comparing universities or health insurances. So many people know much more than me, but if I ask somebody to tell me what the best health insurance in the UK is, it wouldn’t work. If we look to comments, there’s a lot of helpful input but it’s not structured enough.

“This means we have to find a way to structure this content from the user… but in the beginning you need a data model which is highly generic. We don’t have databases or tables for phones or cameras – this data model is so highly generic, nobody has it like this.”

Versus IO’s traffic is apparently growing by, on average, 35 percent a month, and Far says it’s currently seeing 2.2 million monthly uniques.

How quickly it grows in future will no doubt have a lot to do with its expansion into other item categories, and also whether or not people prefer Versus IO’s approach to that of far more established rivals such as FindTheBest. It should be noted that FindTheBest raised an $11 million Series B round a couple months back, and clearly isn’t sitting still.

That said, Versus IO certainly promises a lot and its user experience is impressively clean yet informative. It’s very much worth keeping an eye on.

As for me, a Capetonian by birth who is now living in Berlin, I’m going to sit back and contemplate Versus IO’s comparison of the two cities. Did you know, Cape Town apparently has “appreciably lower” sales tax than the German capital?

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Dave McClure’s incubator launched back in February 2011 after 500 Startups had already invested in about 100 companies, and the group is set to hit its namesake number of investments this year, between the incubator and outside companies. This summer group will be the sixth batch of companies to go through the incubator.

The full list of the 28 companies can be found on AngelList, which is now required for companies applying to the program, beginning on Tuesday.

Apart from the list of companies, here are a few facts about the latest bunch:

• Eight of the 28 companies, or about 28 percent, has a female co-founder, and two of those women are CTOs for their companies.
• Two-thirds of the companies, or 20 of the 28, are international, continuing a longstanding 500 Startups penchant for investing overseas. The companies come from a variety of countries including Brazil, Chile, China, Ghana, India, Israel, Japan, Jordan, Mexico, Spain, Switzerland, Taiwan, Ukraine, and Vietnam. 500 Startups recently added a partner in China.
• One of the companies called Dropifi is the group’s first investment in an African companies, and two of them, Dakwak and Tamatem, are the first Middle Eastern accelerator companies.

Our coverage of the fifth batch that launched in February can be found here, and we’ll be covering the demo day for this batch in July.

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Parker Thompson, who was previously the director of business development for Pivotal Labs, will be joining Dave McClure’s startup accelerator and investment firm. 500 Startups wrote in a press release how Thompson’s new role will fit with the group:

“We’re also pumped to announce Parker Thompson as the latest addition to the our team. He’ll work with our accelerator program while also helping us grow our presence in the San Francisco startup scene. He comes to 500 from Pivotal Labs, where he built dozens of startup products and helped grow the team from 10 to 150 before the company was acquired in 2012 by EMC. Parker also co­founded a location-­based social networking company pre­-smartphone, and worked at Internet Archive on big data problems before the term even existed. Basically, he was working in tech before it was cool.”

Existing 500 Startups employee George Kellerman will also be promoted to partner at 500 Startups, and partner Paul Singh is now founder and CEO at dashboard.io, although he will continue to work as a partner as he did before.

Dave McClure’s 500 Startups has always had an international focus, and debuted its most recent batch of companies back in February.

The accelerator is also officially announcing that it has opened a New York office, and has plans for one in San Francisco (the group is currently located down in Mountain View.) The addition of a San Francisco office is interesting in light of the recent trend among some internet companies like Airbnb and Pinterest moving up to the city.

To continue our east coast takeover and support #500Strong NYC­based startups, we’ve opened an office in Manhattan’s historic Flatiron district. In addition to providing space for our startups (and 500 Venture Partner Shai Goldman), we’ll use the space to host meetups, tech talks, and (of course) parties. To get some hipster cred back on the West Coast, we plan on opening a San Francisco office sometime within the next year. We’ll have more on that when it happens.”

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Great. Now how about those business cards? Unfortunately, you’re going to need them because I’m pretty sure that — assuming it hasn’t happened already — this will be the year the marketing mavens at SXSW finally overwhelm those who are here to party and play with technology. In other words, expect to meet a lot more hucksters than engineers.

I won’t make an official call until the event is over, but there are two trends apparent in the session programming decisions and the inbound pitches leading up to the event: 1) there is a ton of corporate money flowing into the official SXSWi that drowns out the exchange of ideas with incessant commercials for a product or app, and 2) there are still a few geeks holding onto the glory from the heydey of SXSWi with unofficial or additional parties in Austin.

It’s all about the money, honey

First off, a little history for those who may think of SXSWi as some paradise of geekdom; it’s always been an event focused on the bottom line. SXSW Inc. has strictly enforced the use of the SXSW brand, so if you want to have a party at SXSW you have to pay. There are no true unofficial SXSW events, only events that might happen during spring break week in Austin with private guest lists.

But in the 11 years I’ve attended the show it has grown from a small event with a couple thousand “tech folk” — mostly from the hardware and gaming industries — to a creative festival where graphic designers, gamers and people who were trying to build web sites and online startups shared their hopes and fears about open identity, web fonts, privacy and media in small panels. After hours, they drank hard and modified Roombas to race in the streets. Companies like Twitter got their start here; not because they orchestrated huge splashy launches, but because a high concentration of geeks with a lot of free time were clustered in one place.

But as technology became an essential part of everyday life for everyone through mobile phones (as opposed to work-oriented PCs), the corporate presence grew larger and the partiers swankier (it’s still hard to find food, but not nearly as hard). The programming still had some fun and far-out topics, but geek panelists were replaced by marketers from big brands.

BREAKING EXCLUSIVE: I just got word from Friskies that GRUMPY CAT is coming to #SXSW Interactive. I am not even joking.—
Omar L. Gallaga (@omarg) March 04, 2013

Last year I was demoralized when I realized that every other person I met happened to work in business development or marketing for a large corporation outside of the tech world. Yet, there were still pockets of the original SXSW spirit of technology explorers. Encountering a cluster of people trying to connect technology and food was probably the closest I got to those middle years of SXSW, a time when every person I met and every panel and party had me thinking about how tech can change the world — not just get us to buy more soda.

This year, among the pitches and programming, I don’t see any clusters that strike me as super fun. There are a few panels on toys and technology, several (although not as many as I would have thought) on 3D printing and hardware hacking. There is also a component of that ethos at the SXSWedu conference happening now. It may be that these geekier, more cohesive groups (there’s also a SXSWeco and the upcoming SXSWv2v in Las Vegas) are being pulled out into their own events.

Making a break for it

For the hardcore geeks who still want to congregate in one place to discuss their ideas, there is a growing shadow SXSW. It’s no secret that many attendees will never hit a SXSW speech, panel or programmed event. Instead they will attend events programmed by others outside the typical SXSW vote-for-your-favorite-panel method. Maybe it’s a happy hour shared amongst followers of a Facebook page, members of a meetup group, or just recipients of a group email.

But there are several events — including some that attendees pay for on top of their SXSW badge — that have created programming and content for people in town for SXSW. Mobile Saturday is one-day conference focused on all things mobile, while Dave McClure and Eric Reis have pulled together a Lean Startup event during the same day.

A bunch of groups from Germany are taking over Icenhauer’s for the entire conference and are running German Haus. It has panels, discussions, and parties. Big-name corporations have been doing this for the last few years, taking over lounge space and having presentations, but this year it seems more common and home to the most exciting programming.

There are also some events happening outside of the conference such as Doing Business in the U.S., Tech Career Expo and the Ideas Are Worthless conference. Some of these have licensed the SXSW name and some have not.

The point is that even as the core SXSWi event has become overrun with marketers, there are events within the event (or just outside of it) that still retain the spirit of the SXSW of six or seven years ago. Like the web itself, the good stuff is still here; you just have to wade through a lot of crap and marketing before you get there.

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Dave McClure’s startup program has been rocking along for three years now, and is targeted to hit its namesake investment number some time this year. The group’s investment philosophy is well-documented, and involves making a larger number of bets on a variety of companies, particularly international ones, in hopes of finding some winners. Wednesday’s demo day didn’t rival the zany scope of Y Combinator demo days, but 500 Startups is building a different brand than its older rival. The newest 500 Startups companies have an international bent and clearly focus on practical things like traction and revenue — they all included slides on growth and profits in addition to Top 40 music intros.

30 startups presented at Wednesday’s accelerator demo, with a good number of companies focusing on 500 Startups’ core investment interests (parenting, marketing and analytics, and e-commerce, to name a few). Here were my five favorites from the day:

Waygo

Waygo is a pretty cool-looking app built for international travelers. It allows a user to hover their phone over foreign text and get instant translations, almost like scanning a barcode or QR code. The app works in real time, preventing any kind of delay in translation, and most importantly has offline capabilities so users don’t rack up roaming charges. The company said the average active user in China uses the app to perform translations up to 140 times per week. The company has a tiered pricing model, allowing people who want more translations per week to up their subscriptions.

Babylist

When software developer Natalie Gordon was pregnant, she was dismayed to discover that baby registries, like wedding registries, only allowed a consumer to pick wish lists on individual company sites and didn’t allow new parents to list items that were outside of traditional e-commerce (dog-walking, lasagna-baking, etc.) So while pregnant, she coded the beginnings of Babylist, a company that now allows new parents to create their own baby registries. The site, which works like Pinterest and allows parents to create wish boards (taking 4 percent of transactions on average), has more than 11,000 sign-ups so far, and saw $2.4 million in gifts purchased through the site this past year.

Curious Hat

Curious Hat is one of several companies targeting the market of high-tech parents and kids to build educational content for tablets and iPhones that the two can enjoy. Co-founders CEO Luca Prasso and CTO Erwan Maigret both worked at Dreamworks on films including Shrek and Madagascar. “His generation plays, learns, and creates content in new ways,” Prasso said of his young son’s generation. “We want to further engage curious minds.” The company builds iPhone and iPad apps that allow users to send photos and games to their children, post to Facebook, and choose when and where to engage kids in the app. They have a cool feature called “eye paint” that allows children to take photos of real life things and then “paint” using those captured colors or textures. The Curious Hat founders join other tech people who went from large entertainment companies to kids-oriented startups, like Fingerprint’s Nancy MacIntyre or Toy Talk’s Oren Jacob (see disclosure).

CompStak

CompStak is on online marketplace for commercial real estate, aggregating difficult to find information about real estate prices and availabilities in major cities including New York and San Francisco. “Our data is used by institutional owners to compare properties, hedge funds to make investments, and provides meaningful data for brokers, investors, appraisers, asset managers, economists and more,” as the company explains on its website. The company reports that it has all comps, or records of completed lease transactions, from New York over the past year and 50 percent of comps from the past 10 years. The company has free and premium subscription levels.

SupplyHog

Targeting an unusual market for Silicon Valley startups but one that’s actually quite large, SupplyHog works with contractors to let them purchase building supplies online, price out different options, and have them shipped. “It’s tough to find a technology team that’s passionate about building supplies,” said CEO and co-founder Nathan Derrick (a veteran of the construction industry from Chattanooga), but his company has built an interface that allows contractors to find and purchase supplies, working to create a more reliable supply system.

Disclosure: Toy Talk is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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Startups interested in participating in 500 Startups can apply through the program’s AngelList page beginning January 31, 2013. Previously, companies had to get an introduction through the program’s alumni network to apply, although beginning with the most recent class they began experimenting with open applications on AngelList.

“We feel like as more people know about 500 and we try to expand more into other markets, our network is still, compared to the rest of the community, not that big,” said Christine Tsai, 500 Startups partner. The program has always had an international focus and has welcomed founders from outside the United States, so widening the application process even further makes sense. Although Tsai noted that by nature, an open process means plenty more mediocre applications, but the diversity is worth it in the long run.

“That’s just how it is,” she said. “We’re still going to rely a lot on referrals.”

The application process will stay open until March 1, although company applications will be evaluated on a rolling basis. The program’s fall accelerator batch will have its demo days in Mountain View and San Francisco next week.

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There are multitudes of parking spot locator and reservation apps, but SpotHero is trying to set itself apart from the pack by becoming a parking broker of sorts. As co-founder and COO Jeremy Smith explained at Excelerate’s demo day in August, SpotHero has built the back-end systems that not only allow lot owners to notify drivers of parking availability, but to tailor space reservation and parking pass offers based on inventory, demand and specific customers needs.

By using SpotHero’s platform, parking lot owners can sell discounted spot reservations for specific hours or days and even sell monthly passes through the startup’s website and consumer facing Android and iOS apps. Lot owners can even bid against each other for a customer’s business, Smith said.

Parking in a big city like Chicago may seem like a scarce resource, but in reality during most hours lots are sitting half empty. Consequently national and regional parking lot companies have taken a shine to SpotHero’s e-commerce platform in hopes of filling up those empty spaces. The service has been available for less than a year, but the startup claims to have generated more than $2 million in revenue for parking companies, even though its available in just two cities, Chicago and Milwaukee.

SpotHero was the first of the Excelerate’s 2012 class to raise funds, announcing an investment from Dave McClure’s 500 Startups the week before demo day (SpotHero won’t be participating in 500 Startups’ accelerator program though, choosing instead to remain in Chicago). SpotHero plans to use its new funding to hire more developers and expand beyond the Midwest.

Image courtesy of Alex 92287.

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The idea behind clarity is simple: “If you’re at a conference and threw a rock, you’d probably hit 15 amazing advisors, but if you’re in the Midwest, that might not be the case,” explained founder Dan Martell. ”Airbnb has done it for housing apartments, and the App Store has done it for games and products, and we want to do it for advice.”

Clarity allows anyone to set their hourly rates for giving advice, and allows entrepreneurs to make inquiries on anything from marketing to engineering to growth. Beginning Tuesday, entrepreneurs will also be able to post on the problems they’re facing, and get advice on who would be best to answer their questions, if they don’t have a particular person in mind.

Ryan Kim explained how Clarity functions when the company launched in May:

The way it works is that users sign up with their Facebook account and find experts on various topic pages. Or a new user can just submit a question and Clarity will suggest relevant advisors. When they’re ready to reach out, users explain the reason for their call in the web app and Clarity then connects the call to an advisor, whose number is kept private. The advisor, who can see the reason for the call as it comes in, can choose to take the call or add the person to a call back list. Or they can offer a scheduling widget so users can slot themselves into open blocks of time.

Martell said the product has been successful and profitable so far, and the seed funding will allow them to keep growing while adding new services. He said Clarity has grown from about 1,200 advisors at launch to about 7,000 right now, and facilitated 12,000 phone calls from people in over 47 countries. Advisors can choose to offer advice for free (about 50 percent do this) or take compensation for their time. Of those who take compensation, about 30 percent have chosen to donate their profits to charity, an option which means Clarity takes a smaller transaction fee (4 percent instead of 15 percent.) Users can leave reviews and ratings for advisors, giving some quality control to the system, and meaning people who give poor advice might not get repeat customers.

Martell said the average advisor charges $250 an hour for his or her services, although startup celebrities sometimes charge more if they’re getting mobbed by entrepreneurs and need to decrease demand. For instance, Mark Cuban charges $10,000 an hour, and Eric Ries charges about $1,000 an hour — prices Martell says some people are certainly willing to pay.

“The coolest thing is I think we’ve started building a community of entrepreneurs and investors,” he said, noting that about 98 percent of calls occur between two people who’ve never met before, and especially with foreign entrepreneurs.  It can be a great way for a Canadian startup, for instance, to find people in Canada who are willing to give advice on growth in that particular area.

Investors in the new seed round include Baseline Ventures, Freestyle Capital, Mark Cuban, Real Ventures, Version One Ventures, 500 Startups, Venture 51, Ariel Poler, Howard Lindzon, Gerry Pond and Haroon Mokhtarzada.

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After the last batch presented at a demo day in July, 500 Startups accepted this group of companies on Oct. 4 and will groom them for a February demo day, said 500 Startups partner Christine Tsai. The accelerator and seed fund will likely hit its namesake goal of investing in 500 companies in 2013, and has been particularly successful so far with international growth.

The full list of startups can be found online here. Some fun facts about the curent batch:

• 7 of the 33 companies, or 21 percent, have at least one female founder. While this number might not seem especially high, compare it to the only four percent of female Y Combinator founders accepted on average from 2005 to winter 2011.
• 19 of the 33 companies are international, reflecting founder Dave McClure’s particular focus on looking outside the United States and Geeks on a Plane efforts. The current class has companies from Argentina, Austria, Australia, Brazil, Croatia, Denmark, India, Italy, Latvia & Estonia, Spain and Taiwan.
• 500 Startups received “hundreds” of applicants via AngelList, since it was the first time they’d done a formal application (previously they selected companies through referral). However, they selected only eight companies from those applicants, putting the AngelList acceptance rate at less than 2 percent.

Thanks to the success with using the AngelList and application process, Tsai said she thinks they’ll use a similar process in the future, although referrals from founders of 500 Startups portfolio companies still play a large role.

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