“There’s so much happening in Austin, it was place we had been wanting to expand to, and especially with the cloud program in San Antonio we had a lot of visibility because of proximity,” said Jason Seats, the managing director of TechStars Austin. “It was always a matter of when and not if.”

Seats, who was the former managing director of TechStars cloud, is moving about 90 miles up I-35 to take over the Austin class of startups. He told me that TechStars will, “keep the cloud program basically as it is. I’ll be involved with it but we are working on filling the director role.”

The Austin program won’t have an explicit theme and joins programs in Boston, Boulder, Chicago, New York City, Seattle, Wash. and London. TechStars Austin will provide $18,000 in financing and the option of a $100,000 convertible debt, but the most valuable aspect for most will be mentoring from establish entrepreneurs and other program participants.

In an interview with me, Seats said he is looking for about 10 companies for the first class that will run from August 5 to Nov. 1. TechStars looks for founding teams with an idea who want to take that idea to the next level. Generally that means companies seeking outside financing, but as the head of a former boot-strapped startup (SliceHost, which sold to Rackspace) Seats is happy to bring those in as well.

As for connecting with the Austin entrepreneurial community, including the existing Capital Factory incubator, Seats has laid the groundwork. He notes the Capital Factory founders Joshua Baer and Bill Boebel are already TechStars Austin investors and mentors, and both Seats and Baer are planning to work together, despite both running accelerator programs. “The last thing we want to do is cleave the ecosystem,” Seats said.

Seats has also reached out to support from the venture community in Austin, notably Austin Ventures, but also to Silverton Partners and local angels. He expects to see a lot of enterprise software deals given that Austin has a track record of building and then selling or taking such companies public. That’s a plus from his perspective since he views enterprise software as “the first cousin of the cloud,”

“I’ve spent the last two weeks canvassing the city and meeting the CEOs and founders and operators and investors, and the depth of talent and expertise is excellent,” Seats told me. “I have one data point of experience building and running a company, but I’ve met with so many people in Austin who have run and sold their companies and are on their third or fourth of fifth thing.”

That experience, plus more visibility provided by TechStars, should only help Austin and its entrepreneurs get even more experience.

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Tisch will remain active with TechStars as a co-founder, investor and mentor and will continue to help with the selection process. But it’s unclear who will become the new head of the New York program.

Since TechStars New York began, the program has taken in 36 companies, all but two of them are active. The startups have collectively raised more than $50 million in follow up funding. TechStars has been part of a big boom in accelerator and incubator programs in the city and has been arguably the most high profile. It was even featured in a Bloomberg TV series.

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In the past few months, the jockeying among cloud storage vendors — newbies like LogMeIn and more established players like SpiderOak, Box, Microsoft, and others — has been off the charts. All of these companies are trying to make themselves the Dropbox of the enterprise, Dropbox being the cloud storage choice for millions of consumers.

New API aims to ease integration with third party apps

Box aims to accomplish this, in part, by making it easier for third-party ISVs to make Box their de facto back-end storage with a new “V2″ API, said Chris Yeh, VP of platform for Los Altos, Calif.-based Box. With the new API, it will be much easier for companies to deploy Box behind their apps –so the file-sharing and collaboration happen in Box, Yeh said.

A new “instant on” capability will also make it easier for users to opt for Box as the backend storage when they use other, affiliated applications. For example, up until now,  each LinkedIn user had to create a Box account and log into it from LinkedIn. “With Instant Mode, LinkedIn sends Box the user’s email address and if we don’t have an account for you, we autocreate the account and a folder for you in LinkedIn,” Yeh said. “If the user approves it, it will show up to them as a Box folder within the LinkedIn account.

Finally, Box is working with TechStars and General Assembly, two New York-based groups that focus on tech startups. Box will sponsor TechStars’ HackStars program — which brings on experienced developers and designers to work with TechStars portfolio companies. And it will make Box resources available for members of both the TechStars and GA communities. General Assembly is a co-working effort that recently garnered a $4.25 million investment from DST Global’s Yuri Milner.

Whistling past Google Drive

The appearance of Google Drive, after many fits and starts, looms over any and all cloud storage efforts now.  And, while most of the reverbs about the new arrival focused on its impact on Dropbox,  the rest of the market, including Box, is on high alert.

While Box CEO Aaron Levie downplayed the Google threat in some arenas, he also posted  a blog called “When elephants attack”  that deals with the Google threat. In the post, Levie took pains to point out less-than-stellar Google projects like Google Wallet, Wave and Google Health.

Seelie wrote that it’s impossible for smaller, innovative companies to avoid the “elephants” in technology which need to enter any and all large markets. But he said Box’s history of focusing on business users — especially CIOs who pay for value-added storage and collaboration services — will keep it in good stead. Levie wrote:

“If we avoided all markets with competitors that are larger or better funded, the world would be all but devoid of innovation. So we’re taking a different, yet highly recommended approach:  “Climb a large tree. Preferably one without thorns, stinging ants, or lions.” Our tree just happens to be filled with CIOs.

The one problem with that statement is that of all of the 10 million users Box claims, it’s far from clear how many actually pay for the service. Box does not break out that information.

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TechStars Cloud, the fifth iteration of the TechStars franchise and the only one focused on a vertical as opposed to a location, sent the 11 companies to Rackspace’s hometown for a 13-week incubation and sent them off today with spurs in hand — literal spurs. Some companies seemed like stronger contenders than others, but altogether the companies presented offered two insights into the current state of the web.

It’s an app, app world for infrastructure startups today

The shift from building for and thinking about building monolithic web apps such as Facebook or even Twitter has evolved. Now, the “plumbing” for the cloud seems centered around building services and infrastructure for apps, which means APIs and services aimed at mobile developers. Application programming interfaces that allow one program to talk to another are the glue between web services that make things run smoothly, tracking users and delivering quality of service. They also help make apps smaller and more manageable for a world where more and more people are accessing things on mobile devices.

Companies such as EmergentOne, Flomio, CloudSnap, Conductrics and Appsembler all offered products that view the world through this mobile and developer-centric lens. Many help turn APIs from a technical solution to into a gateway for business. Others make building apps so easy that anyone could do it. Appsembler, for example, lets you grab your code from GitHub, pop it on a platform as a service and provide your billing all in a few clicks. Whatever the next level above PaaS is, Appsembler is it.

And in the app-centric worldview, an API isn’t just a way to bridge apps, it actually can become a tool to help drive new business. That’s the case for Conductrics, which offers an API platform to show visitors to a web site an optimized version of the site based on their location, search terms or other pre-determined criteria. Also allowing for new business are EmergentOne, which helps customers build an API in minutes or hours, and CloudSnap, which helps companies link two web-based services together in a couple clicks.

Spending time talking to these companies, I kept thinking of the web as a vast ocean of unstructured data and available services that just need channels to bring seawater to developers and then to users. Companies such as Appsembler and EmergentOne are helping companies build those channels while others are connecting and ensuring the data flows across them. So, in a sense, that’s as basic as plumbing gets.

Making sense of it all

The other theme that linked many of these startups was data. Whether it was Keen.io, which is tracking user interactions on mobile and desktop apps for later analysis, or TempoDB, which has built a specialized database for time-series data, several startups were trying to capitalize on data or help others capitalize on data. Callisto.fm, for example, has a pretty compelling presentation for tracking real-time engagement with a variety of media from video plays to e-book reads.

Others are using data analysis to deliver new products. One of them, Distil.it, tracks who is visiting a publisher’s web site and prevents scrapers from stealing the content. Given how cheap computing is and how much digital tracking is going on, I wonder how long before Distil.it takes its technology and parlays it into a whitelist for other web industries.

I was struck by the subtext in many of these presentations that all data is potentially useful, so grab it, store and then just find analyses to run against it at your leisure. It’s the antithesis of the legacy world in which databases were built based on the types of questions users planned to ask.

Vidmaker CEO Dale Emmons

The other two startups presenting were Cloudability, which launched last year at our Structure conference in June (psst, we’re holding our Launchpad event again this coming June if you want to apply), and Vidmaker, an online collaborative video editing software. Cloudability provides users with a dashboard that shows their cloud spending, something that’s useful, but also something that big vendors such as IBM and CA are also eager to provide.

Vidmaker didn’t really feel like an internet plumbing company at all, but it was pretty cool. Much has been made of the idea that we now living in a post-document era where versions of files are replaced by online collaboration. This has occurred in spreadsheets and in test editing, but video hasn’t made the leap, possibly because the infrastructure required to host and allow for multiple people to edit online video is pretty daunting. However, of all the startups I saw today, Vidmaker is the one I am most likely to use. I can’t wait.

Photos by Stacey Higginbotham.

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London-based Memrise has a cool take on learning and memorization, combining vivid encoding techniques such as visual tools and mnemonic devices with the kind of game mechanics you might find in a Zynga game. The company can take a word in a foreign language and create an animated cartoon or a “mem” around it, giving a user a visual way to remember that particular word. It then schedules reminders and tests of mems to ensure they stick in a user’s long-term memory.

The goal is to move a new word from a greenhouse for short term memory into a long-term memory garden. Memrise will take into account the difficulty of particular words and tailor tests for users that ensure it doesn’t die. Ultimately, it’s supposed to make learning fun, like a recreational activity.

“We found game dynamics are useful to allow people to relate emotionally to memories. That’s not easy because memories are organic beasts that fade,” said memory grandmaster Ed Cooke, who founded Memrise with Greg Detre, a Ph.D. in neuroscience from Princeton.

Memrise fully supports six languages: French, Spanish, German, SAT Vocabulary, Mandarin and Italian, with more than 2,000 full audio and mnemonics-enabled mems. But its user community has added another 1 million words. Memrise is looking to expand beyond languages to anything factual and recently began a partnership with the Guardian newspaper in the UK, teaching readers about things like cheeses, herbs, plants and animals.

Cooke said the company is poised to release mobile apps in the next few months. Memrise is looking at making money through a premium model for the mobile apps, which could have extra features available through a subscription, he said. Further down the road, the company is looking to relocate to San Francisco or New York.

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Unfortunately, these bills, both in their substance and, significantly, the process by which they have moved along, fail this test. As such, they reveal a disturbing picture about the policy process in Washington, D.C. and threaten to create significant and unintended consequences if they are passed. And their passage was a real possibility before the tech and entrepreneurial communities spoke up.

The problems with these bills have been well-documented. I leave to others to discuss just how and why provisions authorizing a private right of action, or that leave an overly broad definition of affected websites, pose a threat to innovation and free speech. Rather than try to describe these problems, I’d like to explore what’s going on behind the scenes.

The way I see it, SOPA / PIPA is a very simple case of a small, very powerful set of industry incumbents (in this case, certain media companies, led by organizations like the MPAA) trying to use complex legislation to slow down the disruption of their industry. Ultimately, this becomes a debate between the incumbents and the innovators, the old and the new, the disrupted and the disruptors. In such debates, the incumbents tend to prevail, and the voice of the innovators — many of whom are too busy with their companies to focus on Washington or who may not yet exist — are rarely heard.

Talk to your representatives

I first heard about SOPA and PIPA in the fall. I sat down in a quiet space, printed out each bill, and read them carefully. If you’ve ever read a congressional bill, then you know that it’s hard work; they are written in a special version of English that only a lawyer could love (and I’m not a lawyer). As I read them, I got increasingly nauseous. I checked with a few friends who were lawyers to make sure I understood them, and when I did, was appalled. In my least charitable moments, I wondered why our Congress was spending time on this when there are so many more pressing issues for our country to deal with.

I then started exploring how these bills came together. I started by talking to my representative in the house, Jared Polis (D-Colo.). Jared is a very successful Internet entrepreneur (founder of BlueMountainArts.com and Provide Commerce) who has led the charge in the house against SOPA. Jared is one of the few people in Congress who has direct experience with and understanding of the Internet. I then spoke to my Senator, Mark Udall (D-Colo.). Mark just came out against PIPA and, while he is not an Internet entrepreneur, he is a huge believer in innovation and willing to explore, in-depth, the dynamics of legislation regarding innovation.

In each case, the story of how this legislation got this far is distressing. I watched the House Judiciary hearing where the chairman, Lamar Smith (R-Texas), who is also the sponsor of SOPA, unilaterally shut down virtually every amendment being proposed to improve SOPA so that it made sense. I then learned that Chris Dodd, a former Senator is now the CEO of the MPAA, which had a deep hand in crafting PIPA.  As I dug deeper, the insider game got worse.

Entrepreneurs don’t support it

More distressing, I searched in Colorado in the business and entrepreneurial community for anyone who supported either bill. I could not find anyone. Most people had never heard of either bill (this was last fall) and, when they heard about them, they had the same reaction that I did. So I started speaking out against the bills, publicly, and loudly.

Initially, those promoting SOPA and PIPA responded by being more forceful. The backlash quickly built, and starting in mid-December, the innovation economy and Internet community kicked into full gear decrying these bills in terms ranging from idiotic to unconstitutional. Then the politics really began. The proponents of these bills started referring to them as “jobs bills” and talked about the massive loss of jobs if they were defeated. Senior executives at large media companies forcefully defended the bills and lied about what was in them, and what their impacts would be.

We are now in an untenable situation. Both SOPA and PIPA are toxic. My view is that anyone who supports these bills either doesn’t understand what they are supporting or is simply no friend of innovation. And, if you are no friend of innovation, I can’t support you in any way, as innovation is the lifeblood of our economy, our country, and what I’ve dedicated my life to.

So, let’s call on our Congressmen to stop this nonsense, hit reset, and, if this issue is one that they really want to address, do so in a balanced, thoughtful way. It’s time to bury both SOPA and PIPA, and try again.

Now, the Boulder, Colo.-based company says it has raised a $21 million Series B round led by Bessemer Venture Partners, with additional funding from existing investors Foundry Group, Highway 12 Ventures, SoftTechVC, 500 Startups and TechStars. This follows a $5 million Series A round raised in 2010.  SendGrid will use the money to grow internationally, increase hiring and invest in product, developer relations and customer support.

Since launching in 2009, SendGrid’s cloud-based SMTP platform has been a valuable tool for many web application companies that stay in touch with their users through emails. It has delivered some 27 billion emails to date. Companies such as Pinterest, Hootsuite, Foursquare and Path all offload their transactional email to SendGrid. It’s a growing market, as companies rely on email to update users and keep their services sticky. SendGrid isn’t just handling a lot of emails; it’s doing some smart work to get past spam filters and blocked IP addresses to ensure emails reach their destination.

“Web application companies are under tremendous pressure to build fantastic services quickly. Offloading a core service like transactional email management and delivery is a smart and simple choice,” said Jim Franklin, CEO, SendGrid.  “Today’s funding validates our original vision and supports our global expansion plans as we continue to build out our team.”

SendGrid also said it’s launching on Windows Azure, Microsoft’s cloud platform for web applications.  Windows Azure customers who sign up for SendGrid will receive 25,000 free emails each month. SendGrid is showing the opportunity in infrastructure apps that help developers plug in needed services that keep their apps running.

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New Revenue Streams: When sites can’t compete on CPMs, where else can they find revenue? The St. Louis Beacon, a nonprofit online publication for regional news, sought to tie revenue strategies to its mission, business manager Shawn McGinness said. The site derives about 10 percent of its revenue each year from events. The Beacon also created what it calls “SpAd packages,” which give sponsors exposure on the site, at events and in printed materials and also provide them with engagement consulting to help them frame their message, design their ads and use social media. (Jeff Jarvis has previously stressed the importance of efforts like these.) And its coverage of the health/biotech industry, which makes up the bulk of the startup scene in St. Louis, has led to donations larger than those raised through typical development efforts.

For many sites, though, advertising is key. Display ads make up “95 percent, maybe 98 percent of revenue,” said Debra Galant, the co-founder of Baristanet in Montclair, N.J. Meanwhile, the site has scaled back its effort to offer daily deals. “We felt like we had to be in the deal space,” Galant said. “But it just doesn’t turn out to be a lot of money. Sometimes it makes sense for an advertiser; we have the apparatus there and can sell it, but it’s not our emphasis now.”

Success As a Standalone The key to starting a small hyperlocal site from scratch is to think about it as a business, as well as a journalistic enterprise, said LocalAmerica‘s editorial director Tom Grubisich, who moderated a panel on the topic. Baristanet’s Galant said, “We’re like the community elders. That’s how we stayed valuable.” How valuable? The site pulls in “well north of” $100,000 per year. “I’d like to see Patch sites as standalones competing against us,” Galant said, and “see how well they do without the AOL (NYSE: AOL) infusions.”

Scott Brodbeck, editor and publisher of Arlington, Va.’s ARLNow, said the journalistic product is the key to a good business. The site grew its audience by offering a “consistent product,” he said: all content is written by fulltime or freelance reporters with backgrounds in journalism. The site links to local blogs and their reporting, but “I don’t really view them as competition,” he said.

Going Hyperlocal In Silicon Alley A panel moderated by Curbed founder Lockhart Steele focused on the startup scene in New York City, and whether hyperlocal businesses started here can scale nationwide. It depends, said Owen Davis, managing director of early-stage VC firm NYC Seed: The “car culture” in other parts of the country may hinder the expansion of a startup focused on “trying get people to interact and purchase.”

Steele asked whether, given fatigue on the part of local merchants, startups are better off demoing a product outside NYC. “San Francisco is more fatigued than New York,” said David Tisch, managing director of seed funding firm TechStars. “Here you can test 15 different kinds of neighborhoods”–tourism- and finance-focused Midtown, neighborhood-y Brooklyn–without leaving the city.

The Next Big Thing (Hint: It Is Not Daily Deals) Offline retail is still an open space, said Tisch. “When was the last time your in-store experience was changed?” Steele pointed out that NYC is a great place to test a retail-based startup. Tisch mentioned Prism SkyLabs, which used footage from stores’ surveillance cameras to build heat maps of how people walked around the store and finding which aisles and shelves got the most attention. “That’s innovative,” he said, “taking existing technology and finding a data layer on top of it.” As for daily deals, Davis said it’s an oversaturated space with little new innovation.

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TechStars NYC managing director David Tisch introduces the new class

TechStars New York, now a TV brand thanks to a new Bloomberg series, graduated its second class of would-be breakout stars, plucked from a pool of 1,200 applicants. The class shows that the program is still churning out a lot of quality, with a pretty polished group of graduates debuting Tuesday. Many of the start-ups offered services marketed to businesses and looked to help smooth commerce or increase consumer engagement. Six of the start-ups had already raised money and many demonstrated some impressive traction with customers.

The demo day even attracted New York Mayor Michael Bloomberg, who seems lately to be on a barn storming tour touting the New York tech scene. He exhorted the start-ups to thrive and help turn the city into a tech capital, hiring many people along the way and ultimately paying taxes to the city.

I’ve already written about two of the graduates Piictu and Urtak, which put on strong demonstrations Tuesday. Of the companies I had yet to see, these caught my eye:

Ordr.in looks to create a Sabre for restaurants, enabling any website, app or service to offer food ordering from restaurants. The idea is to unite all the different ordering services around the country like Seamless Web and others through one API into a larger platform that can serve companies and destinations looking to offer food services. Wyndham Hotels, for example, is building a virtual room service widget for guests who use its Wi-Fi network. The service is finding its way on to Facebook, Boxee, Microsoft Windows Phone 7 and also a new food decider app through a partnership with Hunch.

Just like Sabre has helped power Kayak and Hipmunk while Multiple Listing Service (MLS) helped enable Zillow, Ordr.in is looking to have a similar effect on the restaurant industry, helping the sector make a leap similar to when franchising appeared in the 1950s. The start-up is already working with more than 70 local food ordering services, which allow Ordr.in offer service in all 50 states. I like Ordr.in because it seems like a smart way to expand the market for restaurants, who are often seem stuck in the past and are slow to embrace technology improvements. This gives them much broader reach and it helps brings food ordering to a lot services that we might not have thought of in the past. The company has already raised money from Google Ventures, which led its seed round, and is now looking for a Series A round.

Contently bills itself as a structured market bringing together freelance journalists and brands looking to add content. The service has generated more than $1 million in sales and is doubling in sales every six weeks. It already has 2,000 journalists from the New York Times, Los Angeles Times, Boston Globe and other publications who are making an average of $60,000 annually, 40 percent more than average journalists. Companies such as LinkedIn have already turned to Contently to create content and American Express Open Forum has just signed on for a pilot.

Contently is taking advantage of a couple of trends including the often forced migration of 90,000 journalists into freelance jobs in recent years. Brands are also becoming publishers as they look to engage consumers with original content. I like Contently because it looks like a good solution for the times we’re in. I know a lot of journalists who have moved into freelance work and though it sometimes seems like a more uncertain place to be in, I think a service like Contently can solve a lot of problems for journalists and companies who are increasingly looking to put these writers to work. Contently has already closed a $335,000 seed round with Founder Collective and is raising $3 million with $500,000 already committed.

ChatID is a universal chat platform that lets any business or company connect with consumers through existing chat channels. Right now, users who want to connect to a brand need to head off to their company site to get questions answered. But ChatID allows users to connect through their existing chat services and through popular retail destinations to talk to a company, which should help foster more communication and engagement, increase conversions and cut down on consumer support costs.

This is helpful for companies who sell their wares and services over a lot of different websites. A user who visits Amazon.com, for example, could connect directly to a manufacturer though a chat button on their product page that connects them directly into the brand’s instant messaging system. This makes sense because people increasingly favor text messaging over phone calls. And companies want to be able to reach out to users in real-time just as they’re looking to buy. ChatID has already raised $1 million. I think it’s headed for a lot more if it can become the go-to resource for companies looking to reach out to consumers in real-time.

Here’s a complete list of all the companies in the TechStars NYC class:

Ambassador: Social Customer Acquisition Platform for eCommerce

ChatID: Universal Chat Platform Enabling Businesses to Communicate with Customers on Any Site or Device

Contently: Professional Writing Marketplace for Brands

Coursekit: The Social Network for Education

Dispatch: Service for Cloud File Sharing, Movement, and Management

MobIntent: Ad Optimization and Analytics for Mobile App Marketing

Ordr.in: Restaurant eCommerce Platform Connecting Restaurants Anywhere to Clients Everywhere

Piictu: Visual Network for Mobile Photo Interactions

SideTour: Peer-to-Peer Marketplace for Authentic Experiences

Spontaneously: Mobile Service for Sharing Social Plans and Availability

Urtak: Addictive Q+A Tool Creating Structured Engagement with Web Content

Wantworthy: Shopping Utility that Bridges the Gap Between Browsing and Buying

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