500 Startups shows off accelerator program’s fifth batch of companies

Eliza Kern — Thu, 07 Feb 2013 01:19:43 +0000

In the accelerator’s typically light-hearted and casual style, 500 Startups launched another crop of companies on Wednesday, welcoming its fifth batch of startups down in Mountain View along with press and investors.

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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When outsourcing meets rural sourcing

Jessica Stillman — Wed, 21 Mar 2012 13:04:38 +0000

Years ago companies discovered that since technology gave workers the tools to get stuff done anywhere, organizations could save money by tapping low cost labor markets. Outsourcing was born and along with it, it’s younger sibling and down home American alternative, rural sourcing. But now as costs are rising in top outsourcing destination, India, come companies are thinking on their feet to come up with a new way to keep costs down. The result is a mash-up of these two popular alternatives. The WSJ reports:

In an attempt to keep a lid on costs and employee attrition, London-based outsourcing company Xchanging Plc., which has 30 percent of its staff in India, is experimenting with locating some of its business in the hinterland. Or, at the very least, a six hour drive from the nearest airport. That’s enough to ensure that real estate is cheap, as is the work force. And best of all, it’s far enough to deter the competition from coming in and swooping up trained staff, the company says….

Alok Sinha, president and head of its IT outsourcing division, says the experiment to take work outside Bangalore was driven primarily by an attempt to curtail escalating costs. Real estate prices have increased 15 percent, wages, on average, have shot up by up to 12 percent while the amounts billed to clients have gone up only 3-4 percent, says Mr. Sinha.

“It’s a brilliant idea,” Bhavin Shah, an IT analyst at Equirus Securities, is quoted as saying in the WSJ article. “They will face some challenges in recruiting, but if they can overcome those, it will work very well.” Like many successful rural sourcing initiatives here in the U.S., Xchanging partnered with schools to deal with this challenge, asking colleges located in the towns where the company set up shop to tailor their curricula to turn out students that wouldn’t require much expensive training.

Finding talent was an easy enough problem to sort out, but Xchanging had to get more creative when it came to real estate. There were no suitable buildings in the area, so the company initially took “over the local wedding hall as there were no office buildings that were large enough to house all its employees.” It has since built its own campus.

This sounds like good news for the job-starved hinterlands of countries like India, but are there any pitfalls or downsides to the idea?

Image courtesy of Flickr user Paul Keller.