GigaOM » Tech

Fewer IPOs in 2012, but venture investors enjoyed bigger payoffs [charts]

Rani Molla — Wed, 02 Jan 2013 17:55:37 +0000

Both the number of venture-backed initial public offerings (IPOs) and the number of mergers and acquisitions (M&As) decreased in 2012, but their average values increased, according to a report released today by Thompson Reuters.

The Exit Poll report, conducted in conjunction with the National Venture Capital Association (NVCA), makes clear something we’ve known for a while: IPOs aren’t as popular as they used to be. The average offer amount for IPOs has gone up 225 percent since 2007; the average offer amount for M&As has gone up 16 percent in that same time. Both have seen fewer deals in 2012 than they did five years ago.

According to the report, the information technology sector led with the highest total deal size.

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Can startups afford to be socially responsible?

Ki Mae Heussner — Mon, 14 May 2012 03:54:01 +0000

Startups can often barely afford proper office space, marketing budgets or, according to Mark Zuckerberg, even the time to write a business plan. In an always-be-shipping environment, it’s challenging enough to manage the traditional bottom line of profits, let alone the “triple bottom line” of social and environmental impacts.

But increasingly, tech startups and investors are supporting business models that make companies accountable to not just their shareholders, but also their customers, workforce, environment and greater community.

Last week, Etsy announced that it had joined the ranks of more than 500 companies nationwide as a Certified B Corporation. Like a LEED certification for buildings or a FairTrade certification for coffee, the designation is conferred by a third-party for meeting a minimum standard of social and environmental performance.

Green products makers Seventh Generation and Method were among the first companies to become B Corp certified when Philadelphia-based B Labs started the process in 2007. National retailer Patagonia is also a Certified B Corporation. More recently, the tech community has taken a greater interest in B Corp status. In the past few months, eye-glasses startup Warby Parker and venture-backed travel community CouchSurfing have become B Corporations. Fred Wilson, managing partner of Union Square Ventures, an Etsy investor, said he thinks other companies in his portfolio are also good candidates for the certification.

For some businesses, the community is the value

“When you think about these large Internet-based businesses… it’s the activity of the people on the platform that creates the value,” he said. ”The goodwill of the community, in large measure, [contributes to] the success of the company.”

In addition to the third-party certified B Corp status, seven states, including New York and California, have passed legislation that allows companies to incorporate as a Benefit Corporation (instead of a C Corp, S Corp or LLC, for example), giving them legal protection to pursue social and environmental solutions. It lets companies potentially sacrifice short-term financial gain in the interest of building long-term value for its community or other public stakeholders — without getting sued by investors. According to B Labs, the B Corp status gives consumers an easy way to spot genuinely socially responsible businesses and gives companies a vehicle for differentiating themselves.

But with all the corporate social responsibility hype in the marketplace, it’s hard not to be cynical about another “do good by doing good business” initiative. Measuring social and environmental impact isn’t easily quantified and, even if it were, it’s not so hard to fool an outside auditor. Beyond that, do you really need to be a certified socially conscious company to take socially conscious actions? In the end, what your business actually does is more important than what it says it believes in.

Startups might not have the resources to go through what can be a months-long process and pay for the fee-based B Corporation certification. To become B Corp certified, companies must achieve 80 out of 200 possible points on a social and environmental assessment, and Etsy, for example, said they started the process five months ago. None of the B Corp certified companies have lost their status because they were unable to maintain their standard of performance, the organization said, but 18 percent have lost their certification because they went out of business or for financial reasons.

Entrepreneurs might also worry that they’ll alienate potential investors with a corporate status that essentially tells them outright that, on occasion, they’re going to put shareholder interests below those of the (not easily defined) greater community. In a recent piece on the “promise of B-Corps” (prompted by an article on Patagonia’s pro-B Corp CEO), Reuters’ Felix Salmon said he expects that IPO-bound B corps would draw lower valuations than a conventional company.

But he added that once a company goes public there’s no reason why it shouldn’t grow as fast as any other company and generate comparable or higher shareholder returns. Unlike most public firms that are forced to report quarterly growth and maximize shareholder value at all costs, legally protected Benefit Corporations could escape the curse of the public company with an obligation to consider nonfinancial goals.

Which startups are good candidates

For now, the publicly traded B Corp is just a hypothetical — currently all B Corp companies are privately owned. But B corp designations could provide similar protections to tech companies in much earlier phases of growth.

Natalia Oberti Noguera, founder and CEO of the Pipeline Fellowship, which trains women philanthropists to become angel investors, said that in an industry that sees a lot of consolidation and shareholder transition, the B corp option means a founding mission remains in place even as ownership changes hands. And, as opposed to turning away potential investors, the B Corp status could actually help socially conscious startups attract like-minded investors, such as those with Investors Circle, the Pipeline Fellowship and others.

It’s not the right path for every startup, but for those with a stated social purpose — say professional women’s networks Daily Muse or Levo League or skill-sharing startups Skillshare and Catchafire — it could be a way to take their commitment to the next level.

Another thing to remember: A company doesn’t need B Corp status in order to be a social responsible business. While the B Corp program is a sign of progress, what really matters are the company’s actions, not the external designation, says A. Lauren Abele, COO of the Pipeline Fellowship.

“It’s important to remember that this is a tool,” said Abele. “The social integrity of a business lies at its core, in its decision-making process and commitment to its mission.”

A previous version of this story incorrectly said Patagonia was a founding Certified B Corporation, but it was not actually certified until 2012.

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Why you should go to SXSW. No really!

Stacey Higginbotham — Thu, 15 Mar 2012 20:57:39 +0000

Tubs of free beer at SXSW 2012.

You know what? You should have come down to Austin Texas for South by Southwest Interactive. I know it’s too big and it was wet and cold. And sure it was overrun by stupid startups pitching me-too apps and corporate brands, but it was also a celebration about what makes the web awesome, if you knew where to find it.

SXSW isn’t just the place where Twitter or FourSquare achieved mass adoption, it’s also where real debates of around OAuth or microformats take place. Where folks get together to help charities and where this year I saw the creation of an open data format for food. The show itself tries hard to balance the corporate and startup focus it has with its mission to use tech in ways that benefit the community.

A SXSW panel on data in politics.

Kevin Marks the VP of OpenCloud standards at Salesforce, who didn’t attend this year but has been a fixture at many previous SXSW events, noted that many conversations begun at the show lead to projects and efforts between participants who otherwise may never have met.

“The venue creates this deliberate chaos and you often make connections that you weren’t expecting, because you have to talk to people just to find out where anything is,” he said.

It’s also no accident that you can find panels about gender identity and the impact of SOPA on the web among the conspicuous parties thrown by magazines, tech firms and giant brands. The folks behind the show made a concerted effort to bring in people who care deeply about using tech to make the world better, or who just want to make tech better.

If what happens in Vegas stays in Vegas, then the exact opposite is true for South by Southwest Interactive, what happens here in Austin during those five days should carry the debate or ideas out to a wider population. Maybe it’s an interview with someone about creating new standards for 3-D and virtual reality, which Jay Iorio of the IEEE is attempting to do, or it’s a look at how our private lives are under threat because of big data. Discussion will happen here that have the potential to launch a new standard or a new social movement.

Jay Iorio, an IEEE technologist, who is trying to develop standards for 3-D and virtual worlds.

The folks at SXSW work hard to bring in new faces of tech and foster discussions that range from the founder of the X Prize hoping to fix education to the way your interact with your mobile phoneand how that affects your humanity.

So yes, you should go. Don’t go for the parties, to launch your startup or with an eye on finding the next hot app. Go, so you can hang out with a like-minded community of folks who believe technology can help make the world a better place and who are actively trying to do so. Go, to learn about an entirely new area of technology! Sure, you can avoid all that, but that’s what SXSW is about, even if you have to dig a little harder to find it, or bypass the temptation of the easy app story or the next alcohol-fueled blowout featuring JayZ.

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A Web Worker’s December Twenty-Fourth

Charles Hamilton — Sat, 25 Dec 2010 02:00:53 +0000

‘Twas the night before Christmas, and in my workspace,
The tech gear was taking breaks from the rat race.
The smartphones were plugged into USB,
And the laptops were waiting for “press any key.”
The servers were nestled with heads in the cloud,
And a few FTP files were being allowed.
So I started to close Twitter, Facebook and Gist,
‘Cause tomorrow, I thought, the news could be missed.
When from the dark screens there rose such a ruckus,
I jumped to my desk to see what overtook us.
The normally placid display on my Evo
Was flashing and shining a red-and-white glow.
The light was so bright I could almost not see,
But it looked like a video window to me.
And from the speaker there came such a sound,
Saying “Can you hear me?” in a voice big and round.
“Cell service is bad at the North Pole, you know,
But I wanted to call you on Skype ere I go;
To get on the sleigh,” said he, sounding merry;
“I’ve got more calls coming in on my BlackBerry.
The season is great now the ‘Net works all right;
I have the elves tweeting; Rudolf runs my website.
I can check Google Tasks while I’m up in the air;
And I’m mayor of my own domain on Foursquare.
I’ve outsourced most packages to Amazon,
And UPS delivers for me by the ton;
But there are some things I must still do myself,
There are just a few presents can’t be left to an elf.
Some gifts just won’t fit stockings hung on the hearth;
It’s tough to find packages for Peace on Earth,
And I pay large-box charges on Goodwill to All,
And Joy to the World can’t be found at a mall.
Meanwhile, though, can you do me a favor,
I’ll thank you for being such a good neighbor.
Please pass on the word to your friends at the blog:
Tell them for me to have an eggnog.
Say thank you to Simon, to Scott B. and Amber,
Pamela, Dawn, Thursday, Darrell; remember
Celine and Aliza, and don’t forget Om;
And pass on my thanks to the readers at home.”
He raised eyes to webcam, or maybe to heaven,
And said, “Wish them good cheer in twenty-eleven,
But now, tell them all to relax and sleep tight:
Merry Christmas to all, and to all a good night!”

Image courtesy of Flickr user SolYoung

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The 3 Ghosts of Christmas Family “Techspertise”

Geoffrey Goetz — Mon, 29 Nov 2010 21:51:38 +0000

If you are your family’s resident geek, you get a lot of tech-related questions. They can range from tech support to questions about what you think the future of tech looks like. Here are a selection of questions of holidays past, present and future you either have encountered or will encounter, and some possible answers for each.

Questions of Holidays Past

What virus scan software do you use? I was asked this question so many times I had to come up with an answer for the PCs in my life. So I looked around, and thankfully, Patrick Norton on The Screen Savers (yes, that long ago) once reviewed AVG Free, so I tried it on an XP machine and started answering “AVG” when asked this question. On a Mac, well that’s a different story entirely.

How often do you defrag your hard drive? While a common practice on Windows, I haven’t performed this task very often on Mac, at least not in the same way as on a PC. I do recommend executing the Disk Utility’s “Repair Disk Permissions” as well as purchasing a tool like Micromat’s TechTool Pro. Keep in mind that if you did purchase AppleCare, then you did get the deluxe version of Micromat’s TechTool product.

My hard drive crashed and I don’t have a backup; what can I do? In most cases, nothing, you’re out of luck. It’s always good to have a solid backup strategy. Here’s an area where there are a lot of options on a Mac like Mozy, Carbonate, Backblaze or CrashPlan. Some options like Time Machine are very easy to set up and use, not to mention it ships free with every Mac.

Questions of Holidays Present

When do you think the iPhone will be on Verizon? The new Mac vs PC battle has been replaced with the Android vs iOS battle. Many have speculated that this battle is really an extension of the AT&T vs Verizon battle, which Verizon already really won a long time ago. While AT&T’s exclusivity isn’t going to last forever, it’s still not certain when exactly other carriers will be selling the iPhone.

What apps should I get for my iPad? The market between smartphone and laptop is, at least for the time being, totally owned by the iPad. For me personally, the best apps for the iPad are for the kids. Perhaps productivity is more your thing, or games, but there are just too many out there to say what’s best for all. The best accessory for the iPad is an Apple TV, and then the best app would be Apple’s own Remote.

Do you really get eleven hours of battery life? Yes, yes we do. Well, some of us at least. Those of us running iPads and those of us not running Flash on the new MacBook Air. While the iPad is advertised at being able to watch videos for ten hours straight, others have been able to keep their Macbook Air running for just about as long.

Question of Holidays Future

What ever happened to Google’s Android? This isn’t to say Android won’t exist in the future, because it will. Rather, I think it’ll less and less be Google’s Android alone. It’s very likely we’ll start seeing greater divides between device manufactures, carriers, marketplaces and even the third-party apps themselves. Not even Google has it straight about where and when to use Android and where and when to use Chrome OS.

So this holiday season, when you’re asked for your assistance or opinion, give it freely. The time is coming when the average consumer will know enough about Apple to carry on an informed discussion anyway. What sort of questions do you think you’ll be asked this holiday season, and what are some of your favorites from times past?

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Apple’s Product Line is at Least 50% Mobile

Adam Jackson — Fri, 23 Jul 2010 16:00:47 +0000

I click through to Apple.com every other day mostly to read tech specs of new products and look for subtle changes that would warrant a post but mostly I just drool on my keyboard while glancing at the fancy gadgets.

I noticed something different this time around and I wanted to mark that in July, 2010, Apple’s flagship products (not mice, keyboards or displays) but the products Apple chooses to feature at the top of the store’s main page are now 50% mobile.

Apple dropped the “computer” part of its name and went Apple, Inc. a couple of years ago with the introduction of iPhone. Since then, it’s released the Apple TV, more iPods and the iPad, but it’s only now that Apple’s role as a mobile tech company becomes apparent at a glance.

Macintosh computers have high profit margins and Apple sold over 3 million of them last quarter but Mac sales only made up 33% of Apple’s earnings in that same quarter. The rest of their profits were made up of iPhone, iPad and iPod sales. Remember that Apple notebooks are technically mobile devices, too. That means that 9 out of 12 products of the marquee products Apple sells are mobile.

The Mac isn’t going away any time soon, but the amount of Apple products that are “mobile” will only grow. If rumors are correct, the MacBook Air will become even smaller, teetering on the brink of the netbook category (in terms of size, not specs) with an 11.6″ screen. We’ll see, but there’s no denying Apple is a mobile company and that’s not going to change.

Remote Workers Should Lead the Charge for New Mobile Tech

Darrell Etherington — Thu, 25 Mar 2010 14:00:48 +0000

Lately I’m all about taking chances on tech that may or may not improve how I work and what I get done. It can be expensive, but it’s fun and (most of the time) it’s deductible, too. I do it because one of my few hobbies includes being an early adopter of new tech, but recently I’ve been thinking that there’s probably more to it than that.

The fact is that companies aren’t willing to field test new mobile tech unless they receive a huge incentive to do so. Breaking ground with new tech often falls then to freelancers and contractors who have a greater degree of freedom regarding choice of tools they use. Not only is it just plain cool that field testing new toys often falls to us and then trickles up, it’s also a responsibility I think web workers and the places that support them should openly and actively embrace.

Sometimes this means taking a risk with your money and investing in something relatively untested, but that’s not necessarily what I mean to encourage. Some may not be so quick to drop hard-earned cash on things that might end up collecting dust on a closet shelf. You don’t always have to spend your own money to test things, though. There are ways to have your cake and eat it, too.

Firstly, if you think you can make a strong enough case, you can roll equipment and software purchase or rental costs into your contract price. This can work more often than you’d think, partly because companies like to spend money on software and equipment since it makes them feel like they’ll have a greater chance of getting a quality product back. I still can’t really get over how many times I’ve been asked to suggest a paid alternative to the free tools that I’ve written into contracts.

Secondly, you could ask for things you want to try out to be adopted at the places you frequent for work. That could mean the local coffee shop, or it could be your neighborhood coworking office, if you’re lucky enough to have one. For example, I’d like to get Qi-standard wireless induction charging pads to be made available at my own coworking haunt. It wouldn’t be hard, since there are even inexpensive Nintendo Wii charging accessories using that standard. You may face resistance and skepticism, but if a few others support your argument, you shouldn’t have too much trouble working something out.

Helping to discover and spread the word about new mobile tech advances is rewarding in its own right, but it also benefits you as a web working professional. You’ll be occupying the cutting edge, and it’ll show in the products you deliver and in how knowledgeable you come across to employers and peers. That’s worth the price of a few duds, even if you are buying your own gear instead of folding it into contracts.

Does anyone else feel that part of their role as a web worker is to test out new things, or is it just my way of justifying an extreme gadget-buying process addiction?

Work Smarter: 5 Top, Inexpensive Hardware Devices and Tweaks

Samuel Dean — Tue, 25 Aug 2009 14:00:06 +0000

Some of the biggest hardware efficiency boosts we can get are either completely free, or nearly so. Sure, a maxed-out new laptop would be great to have, but these are tough times. If you spend a little time with the hardware you have or pick up some very inexpensive peripherals, you can immediately start working smarter. In this post, you’ll find five hardware devices and tweaks that you can put to work with good results almost immediately.

Optimize Your USB Flash Drive. Many people own USB flash drives that they got as gifts or were passed on from someone else, and high-capacity versions have become very cheap. Even on drives with relatively low capacity, you can put entire suites of freeware and open-source applications on your flash drive, keep it in your pocket, and have useful applications to use no matter where you are, even if you need to work on someone else’s computer. PortableApps is my favorite site for downloading a suite of Windows apps optimized for a flash drive, while MacLibre is a good equivalent for people on Macs.

Next-Gen Note Taking. Recently, I’ve been using the Livescribe Pulse smartpen (shown above), which you can get for $149 to $199, for capturing digital notes. It’s a writing instrument, but it has a computer and camera onboard. As you jot down notes on special paper (it has millions of dots embedded in it), every move you make is digitally captured so that you can take handwritten notes right into software applications. What makes it better than other similar digital pens is that it also records audio, and creates a time line so that you can jump to various parts of a recording and review anything you were taking notes on at that point. Highly recommended.

Better Battery Life. Low battery life remains a chief complaint among users of portable computers, but there are a number of simple steps you can take to radically improve it. In this post, you’ll find nine tips that can make a big difference. Also, this post illustrates how much juice the display on your portable computer consumes, which is an incredible amount. One of the quickest and easiest ways to get much more battery life is simply to turn your brightness down.

The Lowly Mouse. In my post, “Nine Ways to Make Your Mouse Roar,” I made the point that many of us spend more time sitting with a computer and a mouse than we do with any person. The post details a number of ways to get more out of your mouse (not many people read mouse documentation), including using a scroll wheel directly within productivity applications, scrolling horizontally, and speed scrolling without using the scroll wheel.

Get More From Wi-Fi. Many of us rely on Wi-Fi all day long, but I am constantly surprised by how many people there are who don’t optimize their Wi-Fi setups. As just one example, a couple of years ago, I wrote this post, recommending using access points around a home, and many commenters responded that they use a router only for home Wi-Fi, and haven’t considered access points. That’s fine in some homes, but in others, especially larger ones, an under-$50 access point can provide huge performance and range benefits. Check out more tips on inexpensive Wi-Fi hardware upgrades here.

Share your hardware tips in the comments.

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Dan Harmon Brings New Media Know-How to Community

Liz Shannon Miller — Mon, 24 Aug 2009 21:30:08 +0000

There’s a temptation to title this piece “Local Boy Makes Good!” or something similar, for it’s extremely exciting to see that Dan Harmon (Heat Vision and Jack) has got himself a bona fide TV show. As the co-creator of Channel 101, Harmon is indirectly responsible for the rise of Internet comedy legends like The Lonely Island and Chad Vader, while also providing a platform for independent web series like Bromos and Old Friends to gain awareness. Without Channel 101, it’s hard to say where we’d all be right now. Certainly laughing a lot less.

But Harmon has branched off in pursuit of more mainstream projects — that Hollywood money is tasty indeed. However, he’s continued to bring his own spin to projects, collaborating on the outlandishly low-fi opening musical number for the 2009 Academy Awards, and making sure that the NBC fall comedy he created, Community, has a web-friendly edge.

Watching the clips of Community available on Facebook, one thing is clear: Harmon has spent a LOT of time watching TV. The 5-minute preview contains some 20 references to various shows and movies, including a delightfully meta moment when Jeff (Joel McHale) explains to a lunch lady that being raised on sitcoms means that he (incorrectly) assumes that any black woman over the age of 50 is meant to be a spiritual guide for him.

But while the clips are good, Harmon has also come up with his own way of selling the project in the form of a truly inspired series of infomercials for Greendale Community College, focusing on the five As that the fictional university at the show’s center provides its student body: Accessibility, Affordability, Air Conditioning, Awesome New Friends and A Lot of Classes. (I’m looking forward to the Air Conditioning episode most of all.) Harmon stars as Greendale’s dean of admissions, and his deliberately amateur acting style is only one facet of the dead-on infomercial style being parodied.

There’s also an official web site for the college, which features extended profiles of the series’ primary characters as well as potential hints at future interactivity (a unlinked banner ad, for example, asks if you want to join the school’s A/V department). The overall approach is extremely net-savvy, the kind of campaign that comes when new media gets a seat at the old media table. Plus, it’s funny — the one thing that will always cross platforms.

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A Tech Recovery or Wishful Thinking?

Kevin Kelleher — Sat, 18 Jul 2009 16:00:09 +0000

Is the recession over already? Intel and IBM this week posted stronger-than-expected numbers and raised guidance for future quarters, pushing the Nasdaq 7.5 percent higher and inspiring some to hope a recovery was imminent, if not already here.

But with all due respect to the bulls (and apologies to Richard Fariña), the tech industry has been down so long it only looks like up. Maybe the past year has been so grim and disorienting we’re willing to redefine what a successful quarter looks like. But while it’s one thing to credit a company with managing a severe downturn competently, it’s quite another to declare the worst is over when there are no clear signs that revenue will be rebounding.

Intel’s second-quarter earnings were described as “stellar” and possibly heralding a recovery. So it’s somewhat jarring to look at the numbers and see that in fact revenue fell 15 percent from the same quarter a year ago and the company swung to loss of 7 cents a share (excluding a fine imposed by the European Commission, Intel posted a profit of 18 cents a share, down 10 cents over last year). The stock has rallied 11 percent on the numbers largely because analysts were expecting them to be much worse.

In its conference call with analysts, Intel executives offered little confidence in an actual recovery. CEO Paul Otellini said that even with Windows 7 due this fall, he doesn’t expect businesses to increase spending until some time next year. Sales to consumers remain as uncertain and unpredictable as ever. Any strength Intel saw last quarter came from stimulus spending in China and customers restocking inventories that they cleared out late last year. None of this points to a solid recovery.

IBM also delivered what was greeted as a “walkoff home run.” Although revenue was down 13 percent from the same quarter a year earlier, earnings per share rose 18 percent to $2.32. And while earnings growth in a weak economy is without question good news for investors, it’s a little harder to argue that this augurs a turnaround for tech.

IBM not only spent $1.7 billion last quarter to buy back shares of its stock, but so far this year it’s laid off 10,000 of its workers. Layoffs are a brutal if effective way to weather a recession, but to say that IBM has turned a corner simply because it’s cutting costs faster than its revenue is falling doesn’t make sense.

The cautionary note in Google’s slowing sales is a better indicator of where things stand with technology companies in general. The search giant eked out 4.5 percent growth in net revenue last quarter, down from 43 percent a year earlier. While CEO Eric Schmidt was “pleased” with Google’s performance in the downturn, he was also blunt in declaring that “It’s too early for us to tell when the recovery will materialize.”

I don’t mean to belittle what these companies have accomplished in the recession. But there is a sense among some investors and financial publications that a corner is being turned. It’s too early to start popping corks from champagne bottles. For that, we’ll need to wait until up once again looks like up.

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