Digg Sells Humans In Deal With Elite Media!!!

Yeah, sounds like a headline straight out of the Onion.  Digg.com, a company that was built by Owen Byrne, a past Social Matchbox panelist, who was hired via Elance.com and scaled up by him and others including Eli White who is a Washington area guy as well, has literally sold humans to the elite media.  The terms of of the transaction were not disclosed (so maybe they were traded for a subscription to the Washington Post which owns SocialCode which is the acquiring company.  According to Matt Williams from Digg, “the Digg engineering team will be joining SocialCode, a leading provider of social media advertising and intelligence, and a subsidiary of The Washington Post Company.”  No word has been issued regarding who will support the Digg infrastructure post engineer team departure.  Maybe they found some new engineers on Elance. This sounds like a typical talent acquisition except for the fact that the team being sold isn’t going to the buyer.  We will keep you posted on details if we get any more about this.  SocialCode touts its abilities as an online marketing and advertising agency.  Founder & CEO Laura O’Shaughnessy is married to Living Social Co-Founder & CEO Tim O’Shaughnessy who is also a Social Matchbox presenter alumni.

TroopSwap.com Raises $100k via CIT

The Center for Innovative Technology (CIT) today announced a $100,000 investment in TroopSwap.com, an e-commerce platform built exclusively for members of the military community.

Veterans, service members and their dependents are eligible for TroopSwap membership.  TroopSwap validates the military affiliation of registered users to provide local and national business a verified channel to offer military and veteran discounts in a online. The company was founded by two Army Rangers.  According to our sources, a majority of the company’s employees are veterans and military spouses.  Ten percent of the company’s proceeds are donated to Wounded Warrior charities.

According to Blake Hall, Co-Founder & CEO of the company, TroopSwap has more than 45,000 registered users who are largely based in Virginia.

My Garage Or Yours

When the startup exit climate starts to heat up it isn’t a stretch to say that Monopoly rules are in effect.  Everyone wants to cash in, founders, founders seeking to be landlords while being founders, VC’s starting startups that compete with the startups they are soliciting pitches from, VC’s starting job boards, bloggers starting VC funds and investing in startups they are reviewing, and on and on.  The only trouble is that startups don’t start growing money trees despite the efforts founders’ make to hustle.  Lean isn’t green, it is show me the cash and I’ll sell you how to get rich like me most of the time.  Yeah, if you go to a meetup and you are competing with the organizer to sell to the audience then you might be the customer who paid to get in line.  I personally hate this culture that seems to be really popular when times are good and nonexistent in the actual lean years when IPO’s are not popping left and right.  I’m not saying that event organizers shouldn’t charge admission to cover costs or people should not realize their full entrepreneurial potential. I’m just saying that when everyone is doing the same thing and there is nothing new going on that really sucks.  Right now there is a whole lot of me too incubator and event action going on.  TED was good, but the X should be a check for been there done that.  BarCamp was really hot, in 2007.   Right now it is time for something new.  Something game changing.  All of this time, money and intellectual energy that is being poured into the conquest of the event hoppers would be a lot better spent if it was going into making the world a better place or into taking a startup to the next level or into actually creating startups.

Here is a hint: if you went to 10 meetups, multiply that times 4 hours, and you have just spent 40 hours of your life.  If 10 people all attended the same meetups, that is 400 hours of productive time that could have been applied to something.  Yeah, that is a more than two months of a full time person going down the drain.

So what I’m hoping that this post will inspire is the people who are thinking and talking about action, but who have not committed to action.  Pick your place, your garage or mine, and let’s do something.  There are a lot of people hungry for something new.  If you doubt me, visit Hacker News or Reddit or just go hit a meetup or two.  There are a ton of possibilities and hungry people out there.  Leave your me, me, me attitude at the door and just pick something to do right now. If you can’t find a co-founder or a developer or someone to get mixed up with then send me a note and I will point one out if I can.  Social Matchbox literally happened because of this exact problem way back in 2007.  We did it because people told us they couldn’t find people to help them build stuff.

Millennial Media IPO

Earlier today, Baltimore’s Millennial Media, Inc. began trading on the New York Stock Exchange under the symbol “MM”.  More details about the offering can be found in the company’s SEC Filing.  Morgan Stanley & Co. LLC, Goldman, Sachs & Co. and Barclays Capital Inc. are the joint bookrunners for the offering. Allen & Company LLC and Stifel Nicolaus Weisel are co-managers for the offering according to the company.

When Industries Collide

There was a time in my life when things were changing really fast in the technology space.  Things like Photo and Laser Tag were popping up at the same time as next generation gaming consoles like the Atari 600, 800, 9600 and 1040 ST were popping out alongside of the Commodore 64 and other various contraptions like the Video Phone.  Today I’ve got an iPhone with Face Time so that I can do video chat with a phone that fits in my pocket instead of a phone with a cord and a camera.  Things were changing really fast back in the 80’s and it seems that things are changing really fast again.

Case in point: there is a major shuffle going on in the hardware space right now.  Google, Amazon, Apple, and Microsoft are battling it out for the software and product space while simultaneously jousting for position as makes of mobile and portable and entertainment devices.  Google has thrown people for a bit of a loop with driverless cars and a fleet of eight private jets that are no doubt involved in more than transporting management around to meetings.  Apple has really changed the face of smart phones, both from a platform perspective and from a device perspective.  There is talk of an Apple TV soon.  Google is already in the TV business.  Microsoft has been trying and failing at it for a while now.

Amid all of this, Dell is announcing that it is no longer a PC company.  Can I just say that I’m impressed that a company that started out as a dorm room computer building business has gone as far as it has… Contrast that with Apple, a company that is selling us all movies and music while delivering products that make us all want to chuck the PC that we have learned to live with for so long out the window.  Some even go so far to say that Apple is really an experience company, not a software or hardware company.

Then there is the fact that Apple is getting into the book publishing business and I feel like I am just getting started.  This is going to be an exciting decade.

Assorted Startup Reading

Last week someone asked me who they should be reading so that they can get ahead of the curve in the startup community.  I recently asked someone the same question, but in the context of a search that I’m currently engaged in for a few different members of a mobile product management team.  I like to get to know the context of something before I jump into it.  So this post is the first in a series of short posts about what people I have talked to are reading and what I’m reading, or listening to in the case of podcasts.

For starters, I just read a post by Nat Turner who I saw speak at Founder Factory in Philly a while back.  He and his co-founders had just sold their company Invite Media to Google for truck load of money.  His presentation at the event stood out to me because of several things.  For starters, he either talked about or showed a photo of the air mattresses in the apartment he and his co-founders used as an office and dorm.  The air mattresses doubled as blinds to keep the light out during the day and as beds at night.  Nat’s recent posted ‘Build partners‘ is definitely worth a read and so is his blog.
A friend who just moved from Baltimore to San Francisco recently recommended the Build & Analyze podcast hosted by Dan Benjamin & Marco Arment, two guys who really know what they are talking about when it comes to the mobile web (and more).

AVC by Fred Wilson (NYC) is also highly recommended reading for startup community members.  Another good local VC blogger to check out is Don Rainey’s VC in DC blog.

Someone else suggested PandoDaily, the apparent successor to Tech Crunch if you judge based on writer flight there.  This site is published by Sarah Lacy, a contributor to Tech Crunch and a journalist known for asking tough questions of certain startup founders.  Sarah has been quite successful in getting access to top startup founders so you can count on some vip scoop on this site.  Of course you may also want to check out Michael Arrington’s new uncrunched blog.

This list is not meant to be complete or even balanced.  I’m just sharing a few things because a reader asked. If I left something out that you think is good reading or listening then feel free to add your thoughts, suggestions, etc. in comment form.

The Heart of The Start

Warning: This may be unsettling for some and inspiring for others.  The point of this post is not to turn it into some kind of wild rant about what is wrong with the startup scene. I am making an analogy about sharks in the water and pointing out the sudden fluctuation of wage fluctuation requests, because it is necessary to frame the rest of this post.  The “heart” substance of this post is in part two.

Part I – It feels like a tornado has hit the startup community
Over the last few weeks I have been looking for a lot of people to do a lot of different things. I’m the founder of two active companies, one is a web startup and the other is a services company that I started to bootstrap my startup. So far so good. There are good and bad days that we go through as founders.  Right now is a roller coaster.  There are exciting things happening; startups are getting funded, getting acquired, having IPO’s, and getting a shot.  The media coverage is back, even here in the Washington area, after the Washington Post essentially cut startup coverage after the market downturn.  You may recall that the startup beat team scattered in the wind after a nice run.

This post arises from many conversations. Yesterday I started my day talking to designers and developers and finished by talking to product managers. Today I will divide my time between talking to developers and product managers. I might even talk to a couple of designers if I get lucky. Recently I’ve had some discussions with people about salary numbers that gave me pause.  One person hired onto one of my teams a few years ago has gone from asking for mid 50’s to 60’s to asking for $150k (in under four years).  A second person I talked to has more than doubled their salary requirement in the last four months.  A third person fluctuated from requiring the solid mid $200’s down to a bare six figures within one phone call.  A fourth individual’s freelance design estimate doubled in the same day for essentially a first draft.

And the sharks are starting to circle. There are more “startup incubators” and “startup job fairs” than there are people qualified to attend them or creating new startups (side projects not counted).  There are also an insane number of meetups, conferences and trainings popping up.  This feels like the Texas Oil Boom (I’m a Texas Ex-Pat, so yes, I know).  There are two startup job fairs in DC, one that took place recently and one that has just been announced.  The one that happened recently was organized by people from out of region!  The one called “Startup DC”, is so awesome that they count government contractor staffing agencies among their startups!  I’m not joking; check it out  here:

Meanwhile, startups are being hit up for everything from profit taxes (yes, there is one incubator that put a profit tax clause into their term sheet language) to equity to consulting fees for advice from experts on how to run their startups.  It is all too much to take in.  I went to a technical meetup recently and they asked how many people were looking for developers.  I was amused that they did not ask how many people were developers.  The answer would probably have been embarrassing for the organizers.  In that audience I met one developer who was an employee and one who was a freelancer.  The rest of the people I met were either consultants (pick your poison: government contractor, software development consulting, biz dev consulting, etc.) or people looking to hire someone for their team.  Then there are the startup meetups, but most of those are selling the same startups over and over again or just plain selling something.  Meetup.com meetups and many local startup user groups have become the LinkedIn of networking groups.  Just like LinkedIn started having sales reps spam users, which made it undesirable just as Facebook was coming up, the meetup and user group community for startups is being overrun by people who are in it for something else.  This isn’t the end of times, but it should be a wake up call.

Over the last few years I have watched as some of the best and brightest people from the Washington area startup community have packed up and moved away.  They go off to South By Southwest or to events on the West Coast and get caught up in the superstars that they rub elbows with while they are there.  They listen to or read stories about apps like Twitter getting Launched at these events and blowing up.  In short, they get intoxicated with the whole ordeal.  Then they leave.  Their seat on the local startup bus, train or whatever the popular analogy is almost immediately taken by someone else.  Often there are people waiting in line to take their place.  The problem is that the ticketing agent for these seats is the user groups, Craigslist, and meetup organizers who are peddling something.

Part 2 – What should you do if you are in it to win it?
The subject of this post is ‘The Heart of the Start’ because I wanted to express  what amounts to the most crucial core of a successful startup and to remind people not to get too caught up in the West Coast envy or East Coast buzz nets.  The most successful startup teams start with people who are working together on something that inspires them.  It is often not something that makes them a lot of money, though bonus points if it does.  The team has to be a tight unit of people who are working toward a common goal.  All too often people get into startups because of the West Coast Gold Rush or the startup lottery.  There is certainly a place in the world for that, but they forget that some of the most successful founders didn’t pick winners the first time but they bonded and that lead to the next startup that was a winner.  Starting up is a lot more like Jazz; you get the right people together and magic happens…but it doesn’t happen every time and most good startup people are playing with more than one team.

Lots of people have different ideas about what makes the perfect startup team. Your team isn’t going to be the same as anyone else’s team.  There are books like Four Steps to the Epiphany by Steven Blank that offer incredible clues about how to get closer to success by being iterative and by engaging your target audience early and often, but even therein lies a set of clues and not the keys to success.  If you get the team wrong, then it doesn’t really matter what your approach is.

So one of the biggest things that I would like to point out to you is that when thinking about what you do next, as a founder or person joining the ranks of a startup, is to take a big step back and look at the big picture.  You should ask yourself if you are joining up with a team of people that will really inspire you and make you more passionate.  You should ask whether or not what you are looking at working on is epic to you in terms of what you want to do in the startup world.  The founder of a company is an important part of that consideration.  If you are interviewing with a startup then you should absolutely meet the founder and get to know them. If you are interviewing with a startup that has 60+ glass door reviews online that talk about the meetings with HR more than they talk about the meetings with the founder who was inspiring then that might be a useful clue.  If you are a founder, you might want to start off by working on a really simple project with the person or people who you think are the right people. Try out the experience of building something with them and see what happens.  You may lose a little time, but you will not lose years or your life savings and your edge.

I can’t help but think of the Steve Jobs quote “Stay Hungry, Stay Foolish“.  He is a really motivational speaker for startup folks, but the real reason I’m pointing out his often re-used quote and linking to his speech is because of something else entirely.  He talks at the beginning of his commencement speech at Stanford about being a dropout from Reed College.  He follows that up by describing what he did next as becoming a “Drop In” at Reed College. The concept of being a startup community Drop In is one that we should all consider closely. It takes up a lot of our time to go to all of these meetups and user groups and networking events where we are hunting for people who are like minded or capable.  It might be a worthwhile exercise for all of us to spend a little less time going to events and a little more time collaborating with each other on smaller projects that are not necessarily our main objectives in an effort to get to know each other better and to figure out if we can work together to achieve larger objectives. Sometimes this means surrendering to what the group wants to do or what the group is thinking. For developers this might even mean working on an open source project that doesn’t even have a profit motive in mind.  At the end of the day it means that like Jazz musicians, there is a time to play with a band, a time to improvise, and a time to start your own band and start lining up gigs or to start playing shows for money or cutting an album and going on tour.  As I’m writing this I’m thinking about the episode in David Simon’s Treme where Wendell Pierce’s character Antoine Batiste tries to start his own band.  We more frequently should stop to consider which of these times it is in our careers and for the startup companies we’ve joined.

One last parting thought is that we all need to consider is the problem of the new Acura vs. used Honda Civic (or amend this problem to include the car vs. no car scenario in the case of many Washington area founders).  We all have to make choices and sacrifices in order to work in the startup world.  If you want to work for a startup that is doing exciting things and disrupting the market, sooner or later you are going to have to ditch that new high end Acura lifestyle in exchange for a used Honda Civic lifestyle for a few years,  unless you have a trust fund,  a spouse who is willing to or capable of supporting you, or the ability to learn to raise money and stand it.  You should make this uncomfortable decision sooner rather than later.  And if you are going to have to make this decision, then so are the people whom you support, both family and those who are going to work for you.  If the people you are talking to are not even willing to consider giving up that level of high society then they are going to have a really tough time making a big bet on the startup that you, or you + they, are working on.  Your decision and theirs will impact the willingness and capability of you and your team to push the envelope at key times, which creates a really big obstacle.

Whatever you decide to do, good luck!

This post is dedicated to the original @CoWorkCharles gang in Baltimore, MD which included a great bunch of guys who really inspired and pushed each other to keep their hearts in the right place.  Since that group started, two founders who were regularly involved have moved from Maryland to the Bay area (one took a job and one is working on bootstrapping a new startup) and two are still here (both are working on bootstrapping startups that others are involved in).