The SummerQAmp program, which builds off the White House’s SummerJobs+ initiative, will encourage technology companies to take on underprivileged youths without technical training as QA testers, teaching them how to make software and apps better. SummerQAmp’s goal is to help create at least 1,000 QA internships this summer. By introducing QA to youths, the program is hoping to promote the job as a possible career path. But perhaps more importantly, Martocci and others see QA as a pathway to a bigger job in software development, kind of like a gateway drug for programming.

Martocci worked closely with QA workers at his former job at Gilt Groupe and has seen the power of QA first hand through his brother, who has done QA work for GroupMe and is now GroupMe’s QA manager. He said during a recent talk with Bon Jovi, who has partnered with GroupMe in the past, he talked about the potential for QA as an internship program. Bon Jovi, who sits on the White House’s Council for Community Solutions, connected Martocci with the White House and Chopra.

“QA is a job that some companies don’t do, but they can take on people who are not engineers and this can be a stepping stone into a career path as a software engineer,” Martocci said. “We can train a workforce that’s not traditionally into software development.”

Companies such as eBay, Gilt Groupe, Tumblr, Boxee, Knewton, OnSwipe, and JIBE have already signed on to participate in SummerQAmp.  Martocci said QA is increasingly becoming an important area for technology companies. And when done well, it can act as a line of defense for developers, helping spot problems that they may have missed. He said the SummerQAmp is also launching an online educational resource later this year to teach youths more about the role of QA, guide them in their careers and provides lessons on how to learn software development.

I think it may be a bit of a stretch to say a program like SummerQAmp will directly prompt a new generation of software developers. Software development is still hard work and presents a pretty big challenge for anyone, including people who get exposed to the development process. But I like the idea of encouraging youths to look at careers in technology and QA can be a way for people to get their feet wet without having coding experience. And once they’re in that environment, at least some may get a taste for building, not just testing. It could be become a sort of apprenticeship for some, letting them learn some basic lessons before moving onto bigger tasks.

The way the world is moving, everything is migrating toward technology so it’s good to try and train people early on. That’s why I’m excited about other start-ups like Codecademy, Udemy, General Assembly and others that are trying to encourage education and training, especially in software development and other technical jobs. We are already facing a talent crunch in the tech world and the more ways we can encourage careers in technology, the better.

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SXSW 2011 photo by Brittany Ryan

Pack up the robots, your Apple gear and the Red Bull because it’s almost time for South by Southwest in lovely Austin, Texas. As a local tech reporter, each year I’ve tried to showcase a few of the hotter startups in the city for visiting VCs, executives and job seekers just in case you want to find a deal, partnership or new gig while down here.

So far, more than half of the companies on my previous lists (2010 and 2011) have “made it” in some way, either with an acquisition, more funding or big customer wins. That’s better than a dart board, so I figured I’d keep up the tradition. So without further ado, here are the 10 startups you should meet while in Austin.

Ambiq Micro: I’ve mentioned this chip startup before, but for those hardware hacks out there, it’s worth a look. Not just because it’s building a smarter, integrated-clock chip for sensors, but because CEO Scott Hanson delights in chatting up the hardware and technical details behind the Internet of things.

CommunityOffers.com: Everyone understands how Groupon can be a blessing and a curse for small businesses as a lead generation tool. CommunityOffers is trying to perform a similar service in terms of helping local businesses get new customers, but they back it with data collection on the back end that helps retain and reward loyal customers.

Gazzang: The seamy underside of our big data obsession is how most of our data isn’t well secured. Gazzang, led by experienced enterprise software sales executive Larry Warnock, wants to encrypt the data itself as opposed to the infrastructure on which the data is stored. Gazzang has raised $3.5 million, and already has several customers.

Ordoro: The guys behind Ordoro are out of the University of Texas business school and created inventory and order management software to help small businesses (or big ones) manage the still convoluted and manual aspects of shipping physical products ordered online.

Ricochet Labs: The company behind the popular QRANK platforms was formed in 2010 to create content for publishers. The news-style quizzes aren’t just for publishers though. The company is in the middle of raising a series A round to make advertising a compelling form of content, a must in today’s attention economy.

SubtleData: This is where the cloud meets the mobile world in retail. SubtleData offers a platform that provides a back-end loyalty and rewards service for merchants and app developers. It allows merchants to connect point-of-sale services through their mobile devices. This is a big deal for folks who want to run food trailers or small businesses that don’t want to buy a lot of extra sales software. Of course, now that Square has launched a similar Register service, SubtleData may end up being a buy for one of the bigger players that want to get in on this game.

Umbel: If, on the Internet, everyone is a publisher, then it makes sense to know your audience. Umbel calls itself an audience intelligence company. The stealthy company uses vast amounts of aggregated, real-time social data and hopes to become the Nielsen for the Web. It’s a tall order, so let’s see if it can do it.

Vivogig: Austin bills itself as the Live Music Capital of the World, and so it’s great to put Vivogig, an app that allows you to share and vote on photos of your favorite bands. It looks like they are going to provide a fan outreach and marketing site.

Wheel InnovationZ: A startup that is pretty stealthy, so this recommendation is more about the person than the product. Founder Srini Gurrapu has a lot of experience working with infrastructure startups and virtualization. The understanding is that the company is building an app store to help companies manage the trend of employees bringing their own devices in to work and working on things that aren’t corporate computers. Sounds vaguely like VMware’s Horizon, but it could be a lot of things.

Wide Open Spaces: If you know what Cabela’s is, then you should sign up for Wide Open Spaces, a Gilt-Groupe-style shopping site for the hunting and fishing set. It was formed in October 2011 and closed a small Series A in December.

Image courtesy SXSW, credit Brittany Ryan.

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Crowdsourcing the inventory selection

Firstly, rather than populating its site with objects selected by a group of buyers operating autonomously based on their own taste, LuxeYard is taking cues from its users on what items to sell. LuxeYard members can post photos of the type of items they’d like to buy on social media platforms, and other members can vote up on products they would also like to buy. Essentially, the items for sale on site will be crowdsourced according to users’ wants.

LuxeYard screenshot (click to enlarge)

“We’re really establishing a pattern of listening,” LuxeYard COO Steve Beauregard said in a phone interview Monday. “We’re really trying to build a conversation around certain pieces, and that will help focus our buyers and attune them to our users’ tastes, rather than just buying something they think is interesting.”

Taking group buying one step further

Secondly, LuxeYard is employing truly flexible group buying. This is where members use their social networks to encourage their friends to buy the same product on LuxeYard they’re buying, thereby driving down the price of that item. For example: I could buy a chair on LuxeYard for $150, and then post about that chair on Facebook. If a certain number of other people end up buying the same chair, the final cost for everyone buying the chair could be driven down to $100.

A unique financial starting point

And another unique thing about LuxeYard is that it’s hitting the ground running from a financial perspective. The company has raised $3.5 million from private investors, but has technically already gone public by conducting a reverse merger into a publicly-held shell company. Details are still being ironed out, so there is no public float to LuxeYard’s stock, but it will begin trading under the ticker symbol “LXRD” at some point in the coming months. Access to public market investors will potentially give LuxeYard the monetary wherewithal to compete head-to-head in the flash sales and group buying space already filled with solid players such as Wayfair, One Kings Lane and others, not to mention more general e-commerce sites such as Amazon.

But how long can exclusivity last?

Now, LuxeYard also claims it will be more choosy about the items it selects to sell on the site. According to Beauregard, if a company’s products are already being sold on existing e-commerce sites or major chain stores, LuxeYard will not sell any of its products. That’s an honorable goal, but true exclusivity is not always an easy thing to maintain when you’re also balancing the demand from investors for constant growth. And being that LuxeYard is starting out as a public company with notoriously demanding Wall Street-style investors, that could be an even harder balance to strike. But overall, LuxeYard’s offering seems unique enough that the company has a good shot at success — even in the hyper competitive world of e-commerce.

Here’s one more screenshot of LuxeYard (click to enlarge):

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With its emphasis on design, Fab.com has become a go-to site for "product porn."

It’s that time of year again — time to log on to our favorite e-commerce sites, that is. They are sure to have another banner year. But it’s been an interesting last few years for a new breed of commerce sites that are gaining millions of users and boatloads of cash. These sites are distinctly different from their predecessors in that they have social, gaming and entertainment elements deeply woven into the user experience. They’re able to do so by leveraging the technologies and social graphs that were but a glimmer in the eye of the first commerce sites.

The first wave of e-commerce was built around the functional. Amazon, CDNow and others succeeded in putting the basic shopping experience online. It was hard enough for sites to translate our mouse clicks into packages that we’d receive, with all of the attendant systems, workflow and business processes that needed to be put into place. It was hard and expensive to get basic e-commerce order and fulfillment, and their attendant business processes, in place. At Live365, we spent more than a year and burnt more than a $1 million in 1999 building an online store to sell CDs. One could have the same front-end functionality today for $99 a month using Shopify. Ouch.

That’s not to say that the first generation e-commerce companies didn’t innovate. CafePress, eBay, Hotwire, Lastminute.com and Priceline, among others, innovated on the business model front, but their sites tended towards the utilitarian, rightly eschewing anything that might distract the user and impact conversion rate.

“Here we are now, entertain us!” — Kurt Cobain

Enter the second wave of e-commerce

Not so the new breed of e-commerce sites. They obviously optimize for conversion. But their core value proposition is based on entertainment, gaming or social. To channel Maslov, now that we’re able to easily buy the stuff we want and need online, we look to fulfill our “higher” needs via commerce: To express ourselves, to identify and connect with one another, to be entertained.

Companies are popping up and getting funded in several categories:

Flash sales: Vente Privee, Rue la la, Gilt, JetSetter and their kin were probably the first to go for high production values in the presentation of their product. This high-gloss veneer combined with the urgency and serendipity of a flash sale clearly struck a nerve. Fab.com is clearly on to something in this arena. As my friend put it, “It’s where people go for a little product porn during their lunch break.”

Crowd-sourced, user-created, demand-led: CafePress and Zazzle are the pioneers in this category. Threadless and its clone, Spreadshirt, have brilliantly built design-oriented communities with a game component. Made.com is taking a different approach by ensuring demand for their products before they get manufactured.

The new window shopping: Open Sky is a platform for celebrities and experts to curate things for us to buy. Others, notably Pinterest, Polyvore and Svpply, are taking the notion of curating to the logical next step by allowing us to roll our own lists of things we love, while FantasyShopper here in the UK, is introducing a game-like element to this.

Story-based commerce: As high-end brands have gone more and more mainstream, we increasingly desire other ways to express ourselves. Products with stories behind them are one way of doing this and Etsy, the platform for artisans, stands tall in this area.

S-commerce: Subscriptions, that is. ShoeDazzle, Birchbox and Trunk Club are high-profile examples of sites taking a subscription approach that gives their subscribers both cost savings and a “story” from the serendipity of what you get in your monthly shipment.

Big brands: Not to be outdone, the luxury brands are increasingly investing in entertaining their consumers online. Victoria Secret, with the annual runway show, is probably the pioneer in this area. But nearly all brands are investing heavily in rich media content including Ralph Lauren, Burberry and Hugo Boss.

This is by no means a comprehensive list of the models and activity in the space (unlike Elizabeth Knopf’s exhaustive analysis on Quora on why e-commerce is such a hot area in VC) but it hopefully gives a glimpse as to the “new new commerce.” It may well become the norm in the years to come as these new sites grow into their own, and as the incumbents respond in kind. We will simply expect our online shopping experience to be social, to be fun or to have beautifully presented products. As we’ve seen in music, there will be different curators in fashion, travel and other categories, from whom we will decide what to buy. Pinteresters, Polyvores and Svpplyers whose influence may well rival that of magazine editors and retailer buyers.

But in fact, the new new commerce isn’t so new: Artistotle is said to have noted that “Man is, by nature a social animal.” He was on to something. In fact, the fear of people and public places, agoraphobia, is literally “fear of the market.” Whether it’s the storytellers spinning yarns in the main market square in Marrakech or the flower sellers on Columbia Road hawking their wares in their Cockney accents or the auctioneer at the county fair, we have socialized and been entertained while shopping for centuries. And as long as we remain a social animal, it’s only natural that we will look for the same fix online

Rags Gupta, based in London, is currently on sabbatical from the online video company Brightcove, where he has been vice president, international. Prior to that, he was an executive at Live365 from 1999 to 2004 and is currently an investor/advisor at 8tracks. Follow him on Twitter: @ragsgupta. 

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According to a report published Tuesday in the Financial Times, an IPO is in the cards for Gilt Groupe, and at this point it’s just a matter of timing. The FT quotes Gilt Groupe CEO Kevin Ryan as saying:

“We are certainly plenty big enough to go public. The question is, is it the right time, do you want to spend the time on that? We’d look at the process in 2012… I think it’s entirely possible that in 2013, depending on the markets and depending on how things are going, that we would look to go public.”

But if and when Gilt holds an IPO, should it really be seen as a big tech industry story? For me, covering Gilt Groupe brings up the same questions I had when the tech press was gaga over the Groupon IPO a couple weeks ago. Yes, both companies have raised hundreds of millions of dollars from the same kind of venture capital firms known for backing the tech industry’s most rigorously engineering-focused firms.

But only five percent of Groupon’s total employees work in technology; the bulk of its human resources go toward efforts such as sales, editorial and customer service. Gilt hasn’t published a breakdown of exactly how its workforce is deployed, and it does seem to have a strong engineering team and culture as evidenced by its “Technologie” blog and hackathons — but it’s ultimately a discount retailer. The fact is, Walmart has a very solid IT team too, but the tech press does not typically cover all the ups and downs of its stock price.

Of course Gilt and Groupon could very well grow to become more tech-centric in the same way that Amazon has evolved over time. But right now, should they really be put into the same category as the Facebooks, Microsofts and Googles of the world?

I don’t know the answer, but I think it’s worth some critical thought and discussion. As more straight consumer products and retail companies become savvy to the web and mobile technology, it will be interesting to see how the lines continue to blur around what we think of as a “tech company.”

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Rob Grimshaw, managing director of FT.com, alluded to the challenges that lie ahead for publishers: “Just because we’ve opened a shop doesn’t mean we’ve become retailers.” The lessons are worth learning: In the slightly tongue-in-cheek words of moderator Andrew Edgecliffe-Johnson of the FT, “We’d all rather be Amazon (NSDQ: AMZN) than some boring old newspaper company.”

Some takeaways:

The Single Thing With the Biggest Payback Social networking is not a panacea: “We get traffic from the social channel, but more from either e-mail or from people just having bookmarked the site,” said Gilt’s Lyne. “Personalization is probably the single thing you could focus on that will have the largest payback.” Some of that, she said, is self-generated: “Asking people to self-identify as liking ‘x’ brand, or wanting to read more about this or that.”

But Gilt has also started heavily personalizing all of the e-mails it sends out. There are now “literally hundreds of thousands of versions of the e-mails,” Lyne said. “It starts when you come in; we separate you by being male or female, and where you live. But over time, we look at your browsing behavior and your buying behavior–anything you’ve tried to add to your cart and not been able to, anything you’ve waitlisted–to get a sense of what your sizes are. We layer that on top of vertical data, so we get more data. We run it every night, so the next day your e-mail has been ordered in such a way that the brands you’re interested in and the sizes you wear are at the top. It’s all automated.” This process hasn’t yet been extended to Gilt’s website, because that is such a big undertaking. But “if we could change the site 800,000 ways, we’d do so,” said Lyne. “And in time, we will.”

Beyond Product Descriptions. “The type of content we seek to provide has to meet the needs of a parent or grandparent.,” said Andrew Kovan, chief of marketing and digital commerce at toy company Melissa & Doug. ” There used to be less emphasis on content, specifically, and more on content in general: Product descriptions, or four images. Now the content has to accomplish something, and it’s moving into the realm of video. How do we make sure we’re providing the right content in the right places to get that conversion–which may happen offline in our case.”

The Value of Niches. “As we’ve started to get more information about how people read articles on the site and the journeys they then take, what has started to become clear is that the value is not necessarily where you think of it,” said Grimshaw. “Some of our more niche content about commodities, for example, is actually incredibly effective at convincing people to subscribe. When you have that info, you start to look at those areas in very different ways and think of additional content to put around them–it’s not just a backwater. Picking out niche opportunities is key to getting this right.”

Lyne agreed. “When we do a sale on shoes, we end up with the women’s size 5 1/2 and 11 at the end of it,” she said. That used to be a “challenge, the leftovers.” Then “we realized, wait, we’ve got ‘x’ number of people we know wear a size 11. So why not create a private sale for them?”

What Content Means For Retailers “We photograph almost everything that we sell ourselves,” Lyne said. “At the forefront, we’re investing in styling clothes that will make them appeal to a certain consumer. So take certain brands that may have been perceived as a little more old-fashioned–by breaking up Carolina Herrera suits, showing the top with a pair of jeans and a great T-shirt–suddenly Carolina Herrera becomes a cool brand for 25-year-olds.” Moderator Edgecliffe-Johnson broke in–something he did more than once when Lyne was speaking about something interesting–to ask if Gilt is in competition with magazines. “Yeeeeeeeah,” said Lyne slowly. “It’s part of our sell to vendors: We’ll bring your brand to a new market base and bring back business intelligence to you. We give vendors a [free] breakdown after the sale, with the demographics of who bought what and which things were most popular.” In other ways, too, Gilt has evolved its sites after watching news sites. “Gilt Taste has a very heavy content component to it and we brought Ruth Reichl in to be the editor,” Lyne said. “Our thought was, let’s engage with that foodie community and celebrate artisanal food producers, so that over time people who come initially for content will also use us as a source for food.”

For Melissa & Doug’s Kovan, a large part of content is “the user-generated piece–images, videos, Facebook comments. I believe we have a responsibility to ensure that that content sets the stage for what happens when the customer buys the product.” Melissa & Doug just signed a content share agreement with Grandparents.com, and Kovan said he’s open to other such partnerships, which he believes can add value to both brands participating.

For The Financial Times, Small Changes Meant Twice As Many Subscriptions. “Customers are very sensitive to small things,” said FT.com’s Grimshaw. The company tested different subscription “barrier” pages–changing only some wording and content and keeping the price and package the same. “After two months of experimentation, we were selling twice as many subscriptions,” he said. “It was an astonishing revelation, that small changes in the design of one stage of that process could make such a big difference.”

Shopping As Entertainment. “We take a lot from media in our commerce business,” Lyne said. “We program our site every day and it’s new every day. We launch at noon with a completely new set of vendors. It’s the idea of being ready for an audience and trying to put your best face forward every single day, and assuming that at least a part of shopping is also entertainment.”

Loyalty Means Something Different Now. “The traditional way of looking at loyalty doesn’t match the ways people engage with brands anymore,” said Irving Fain, CEO of brand engagement software company CrowdTwist. “People may engage for days, weeks or months before a purchase is made. Now all the interaction that people have with content is a transaction that has value–watching a video and seeing a product in action, or sharing a link.”

The “real currency” now may be a shared e-mail address. “Getting people to say ‘Yes, I would like to receive e-mail from you’ is increasingly difficult, because, as you all know, your inbox is a nightmare,” Lyne said. “Every deal site in the world is offering you the best deals on the planet, there are multiple newsletters coming at you. Inbox clutter is an increasing challenge to anybody trying to develop an ongoing relationship with a consumer.”

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Lot18 has taken off rapidly since the site launched with wine sales in Nov. 2010. The New York City-based company hit an annual revenue run-rate of $12 million in April and has grown to a staff of 75 full-time employees. Last month, Lot18 closed on $10 million in Series B funding, bringing its total venture capital investment to $13 million.

According to James, Lot18 has been received so well because it taps into a hugely under-addressed market. Selling wine online is challenging, in large part because of the complex regulatory issues that come into play when selling and transporting alcoholic beverages across state wines. Lot18 has built a software backend that checks and catalogs various compliance issues in real time for each winery with which it works, James said. Lot18 is not a licensed retailer of alcohol, and it does not hold any inventory. James told me that underneath the hood, the site functions as an eBay-like marketplace between wineries and individual consumers.

Now that the company has built a scalable infrastructure, it is keen to start facilitating sales of other, related products, James said. Hence the move into artisanal foods from small producers. “If you think about the conversation we have when sourcing from these small wineries, it would be similar to what we’ll have with a small cheese producer or a farmer,” James said. “There are similar problems with getting their brand out there and shipping complexities. Those are all things that we have an expertise in.”

Lot18 expects to roll out the food vertical first, followed next by epicurean travel packages. “We have insider access to the best food and wine, and we already have a team of curators that work to source our product,” James said. “We have these connections, so we’ll more easily be able to plan a trip to go to Bordeaux and help with the harvest, or to have an exclusive dinner at a wine auction house.”

Lot18 is also working to roll out a sales vertical for high-end spirits. But that particular launch will be in the longer-term, James said, due to the additional regulations around selling hard alcohol.

While all this growth is exciting, I had to ask: Why is Lot18 working so hard to expand, when it’s already doing so well as a single-focus wine business? Why not stick to that vertical and foster the company’s status as a pure-play acquisition target? After all, Amazon has displayed an obvious interest in getting into wine sales, with its short-lived Amazon Wines effort. Even smaller daily deals and e-commerce companies such as Gilt Groupe and Groupon could certainly be interested in buying their way into the space. Why didn’t Lot18 choose to just stay small?

James acknowledged that Lot18 is probably a very attractive takeover target as it is. But the company opted to take on more funding and invest in growth because he just isn’t looking for a quick flip. “We have a pretty long-term vision,” James told me.

Indeed, James stressed to me his vision of Lot18 as much more than just another trendy daily deals play. “In terms of the competitive landscape, the kinds of sites I think about all day are not Groupon and Gilt. I think of Zappos and Diapers.com.” Both Zappos and Diapers.com had relatively long histories for the e-commerce space, and were eventually acquired by Amazon for around $850 million and $540 million, respectively. Lot18 may be shooting the moon, but if it all works out, the strategy could pay off big.

Ed. A previous version of this article incorrectly identified Lot18 Co-Founder and President Philip James as the company’s CEO.

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