Category: Tech news

Today Blippar, a two-year old AR advertising company out of the UK, is celebrating its one-year anniversary in the U.S.

AR advertising sounds about as exciting API management, but 3 million users beg to differ. At its core, Blippar lets users scan Blippable content in the real world (think Ketchup bottles, packets of gum, train station posters, etc) to see extra digital content through augmented reality tech.

Obviously, this has been done before, but Blippar’s scale and smooth technology (users can access the Blippar digital content within 300 milliseconds of scanning) makes this one of the stronger steps toward mainstream augmented reality use, especially in advertising.

Mitra explained to TechCrunch that big brands are certainly interested in AR, but use it in their own native, self-developed applications and campaigns. Blippar is different because it acts as a consumer-friendly portal to AR advertising, so that users have a single destination to which they can go and experience a brand’s digital content.

So far, the service has over 3 million users (1 million of which are in the U.S.), with 500 brands and over 150 publishers participating on the platform.

Obviously, brands are champing at the bit for this type of interaction with consumers. Plus, Blippar offers them all kinds of consumer touch points and data, like their location, what time of day they’re interacting, which content is most popular, etc. For publishers, especially in the print and magazine realm, Blippar offers a way for users to buy direct from a magazine.

Even more impressive, Blippar allows brands to modify the digital content based on time of day, location, and other data points, ensuring that the Blippar AR content is as relevant as possible.

Right now, Blippar functions as a communications tool between brands and consumers, but the long-term vision involves making augmented reality a mainstream medium. Eventually, users will be able to build their own Blippable content to be shared with their friends.

For now, however, Blippar is focused on spreading the world and scaling the platform.

Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil.

In September 2012, Y Combinator’s Paul Graham penned a widely-circulated essay titled “Startups = Growth.” The message was clear — startups are about growth. Once a startup stops growing, it gets busy dying. Since so much of the Valley hangs on Graham’s words (myself included), this essay cemented what Andrew Chen proclaimed in his famous post earlier in 2012 “Growth Hacker Is The New VP Marketing,” that the stakes for gathering huge crowds of users on new hyper-growth platforms was big business. All of this culminated in an event, The Growth Hackers Conference, which was inaugurated in Fall 2012 and convened again in May 2013.

There’s no doubt Chen’s original claim that online and mobile marketers are now expected to be “full stacker,” yet at the same time, what I saw on the venture side of the table during this span has been illuminating and troubling. As traditional venture capital gets bigger, moves to  later-stage deals, and requires evidence of strong traction, the thousands of seeded startups blooming are in a desperate race for growth, to submit evidence to a jury of investors to proclaim, “Hey, look, our service is growing!” and hoping for the chance to secure funding to keep going. Investors, looking up and salivating at the skyscrapers like Twitter and Facebook, perhaps lost sight what it takes to build seismic-grade foundations under such edifices. All of this combined to create a vicious cycle where investors expect hyper-growth curves, and entrepreneurs must attain this growth at any cost — or die — thereby creating a perverse incentive to chase potentially inorganic growth in the short-term for the chance to survive.

Lost in the race were modest questions of common sense and decorum: “Have users organically found the product?” “What are users saying to their friends and acquaintances about the product?” And, “What is unique about the model that could make this scale to tens of millions of users naturally?” I’d like to underscore that I don’t assign blame  here — surprisingly, these are mostly rational moves considering all the circumstances facing these actors. We can point at entrepreneurs who chase bad metrics and wag our finger, but the unfortunate reality is that they can also be rewarded by VCs for it. Or, maybe, we are all to blame.

Like most things, the truth in this case probably resides somewhere in the middle. Early-stage startups might do better to think about growth from an engineering, product, and marketing point of view early on, and also to be realistic and willing to staff accordingly in order to carry out the variety of schlep work it takes, to do the things that do not scale, the things that large companies or the dispassionate simply would not do. Hacking growth to establish a beachhead to experiment with new tactics may buy teams more time, but may also be attempting to lock-in organic behavior.

Or, perhaps it’s not a this-or-that choice between focusing on growth and doing things that don’t scale, but rather a signal that both investors and founders need to bake  the quantitative ingredients of the growth hacker arsenal along with the softer, more qualitative elements of doing the hard things, many of which may be offline, in order to build a credible foundation and differentiate in the market. Maybe both founders and investors need to come to grips with the reality that most startups need more time to chart their path and that investors should be even more selective in choosing which teams and products deserve more swings at bat.

That’s why I found it interesting when Graham, most recently, penned another essay a few weeks ago titled “Do Things That Don’t Scale.” The web loved it, and rightly so. It’s almost as if we are finally dialing back on the culture of growth-at-all-costs. It may be time for everyone to take a breath and ask some more fundamental questions. “Do consumers have any time in the day and attention to use an infinite supply apps?” “How can we be more honest about whether a product is genuinely being used and organically shared?” “When is it time to concede a product just isn’t what the market needs?” “Will at least some investors be willing to have more conviction around earlier-stage products and back them based more on art and conviction, rather than pure metrics?”

I don’t know what the right answers are, and they’re likely to be different for each company. What I do know is that the current mix isn’t quite right, and it is not sustainable. I am most interested to learn what you think. Does a startup just equal growth, or should we be focusing on doing things that don’t scale, or is there a balance companies and investors should strike early enough so that it’s not too late? These are all important questions that affect the credibility of we all do, and as difficult as the answers may be to swallow, it is my belief that now is the time these questions need to be asked.

Photo Credit: Carl Glover / Flickr Creative Commons

It took a while for me this week to judge the news value of the G2 Crowd analyst report about marketing automation. I thought about it, took another look and concluded that, yes, marketing automation has to be one of the most boring topics to write about. It’s fascinating in its own way, right? No. This stuff is as boring as hell if you don’t get the right angle. More so, it gets confusing if you don’t organize it right. Thoughts shoot around and land in a pile of nonsensical crap.

It’s the bigger picture that makes this story interesting. At its most basic level, the G2 report is more about how data is changing the way the old-school big technology companies are valued and judged. G2 Crowd uses crowdsourced data that it analyzes and ranks. It’s interactive, as opposed to the static “magic quadrants” that Gartner Research uses to define the leaders in different sectors of the enterprise technology market.

The G2 report collects data from people who use marketing automation software and services. It’s immediately available on the site and updated as more data gets processed into the results.

Most analyst reports are updated on an annual basis or even every two years by one or a few people who spend months doing interviews. This has its drawbacks, because a lot can happen in the market between reports, and smaller vendors are often excluded. It’s essentially a manual, interview-driven process. Surveys may be done, but syncing results into a real-time quadrant is not the norm.

The G2 Crowd grid is based on 700 user reviews by people who have been vetted to ensure they are actual users of the products. Reviews are posted in real-time. The data is aggregated and analyzed quarterly by the G2 team. The grids are designed to aggregate peer reviews, web traffic, Twitter, LinkedIn and other social media data into an algorithm to determine how companies are perceived. As I noted in May, the peer reviews are weighted more heavily than other data.

It’s this data-driven approach that will continue to filter into the buying and selling process. Evidence of this is growing as companies from various market sectors are starting to offer the capability to make quick decisions without the guess-work.

For example, Brinqa uses a NoSQL graph database to do risk analysis for customers. The company offers context to machine data so customers can build models that help them make buying decisions that don’t rely on guessing.

CEO Amad Fida said in an interview this spring that the ability to do data analytics helps customers think more about the infrastructure that they run. They are doing more analysis to determine where they keep their data and the data center operations required to process it.

Wise.io, for example, acts as a framework for ingesting data from Hadoop, MongoDB and various file sources. As I wrote this spring:

The Wise.io engine creates multi-dimensional views of the data it ingests. For example, machine learning can analyze every pixel in a picture and correlate its relationship to all the other pixels in the photo. The Wise.io engne can, as well, process the billions of other signals that any data point relates to. Scale that multi-dimensional view from billions of signals and the benefits can come in any kind of form. A streaming provider might know if the customer using the smartphone is sitting or standing. The Wise.io framework serves as a central brain that takes a holistic look at the data. It has its most useful applications in tasks that require a high level of cognition and intelligence to get the work done.

As customers use more data, they will seek ways to make their processes more efficient. Data will definitely determine the purchasing decisions they make.

But you have to wonder what the need will be for any service that is not data-driven. What will be the value of reports that are essentially compiled by hand? It’s hard to imagine that they will have as much relevance compared to data-driven services that help customers make it easier and faster to make buying decisions.

Nate Silver and I are big fans of Google’s Consumer Surveys tool. “Perhaps it won’t be long before Google, not Gallup, is the most trusted name in polling,” wrote Silver, on how Google conducted one of the most accurate polls of the 2012 election cycle.

But I didn’t know how useful they’d be for media outlets until I was able to identically replicate a non-election Gallup poll for a fraction of the cost. Last week, Gallup released an important poll on the (relatively) anti-immigration attitudes of Americans, which was one of the best pieces of evidence I had seen demonstrating why immigration reform has been so difficult to pass.

It turns out that no one needed to wait for Gallup or any professional outfit to conduct these very important barometers of public opinion. It took me about 10 minutes to recreate Gallup’s own poll with Google’s Surveys wizard tool.

For the question “In your view, should immigration be kept at its present level, increased, or decreased?”, Google was within a few percentage points for every single answer, except for two (it was off 15 percent for Republicans who wanted to decrease immigration and 12 for Republicans who wanted to keep them at the “present level”).

And, here’s the detailed table

	Gallup	Google
Increase (Republicans)	16	16
Increase (Democrats)	29	28
Increase (Independent)	22	21
Decrease (Republicans)	46	61
Decrease (Democrats)	27	28
Decrease (Independent)	35	41
Present level (Democrats)	36	38
Present level (Republicans)	42	20
Present level (Independent)	41	34

It’s not clear whether Google was wrong for the answer on Republicans. Internet and phone surveys naturally have different responding populations, since the Internet skews younger and the phones skew older (people still have phones?). And some people may have an aversion to saying they want to decrease immigration over the phone, whereas they’re perfectly willing to let their inner xenophobe fly at a faceless computer screen.

There’s still a lot more testing needed to see when Google can replace professional polling operations. But it looks very promising enough to start using it now.

Every journalism school in the country should be teaching students the (very difficult) science of survey methods, so they can all start adding more objective evidence to their stories — because, thanks to Google, all of them have the capacity to be pollsters.

Color this writer excited, more deliciously informative stats to come.

Editor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. His latest book, “Choose Yourself!” (foreword by Dick Costolo, CEO of Twitter) came out on June 3. Follow him on Twitter @jaltucher.

My most recent book, “Choose Yourself!” sold 44,294 copies in its first month out, hit the Wall Street Journal Bestseller list, was No. 1 on Amazon for all non-fiction books for a few days and is still flirting with No. 1 in its various categories. This post is about what I did differently, why I did it differently, and how I think anyone can do this to self-publish a bestseller. I describe all the numbers, who I hired and why, and how I made the various choices I did.

Every entrepreneur should self-publish a book, because self-publishing is the new business card. If you want to stand out in a world of content, you need to underline your expertise. Publishing a book is not just putting your thoughts on a blog post. It’s an event. It shows your best curated thoughts and it shows customers, clients, investors, friends and lovers what the most important things on your mind are right now.

Unfortunately, most people suck at it. I’ve largely sucked at it. I’ve published 11 books — five with traditional publishers and six that are self-published.

The distinction now is no longer between “traditional publishing” versus “self-publishing.” The distinction now is between professional versus unprofessional publishing. My first 10 books were done unprofessionally. Even the ones with the big publishing houses. They will probably hate me now. I hope not. I really like the people I worked with at these publishers.

I hope that everyone self-publishes. The benefits are enormous:

More money. Unless you are a John Grisham or E L James you will make much more money by professionally self-publishing. It’s not just money on sales but also foreign rights and special packages that you can offer if you control all the rights to your work. Packages that the traditional publishers almost never go for.

Control over design. Traditional publishers usually keep that control.

Speed. You will probably speed up your publication date by over a year or more if you self-publish.

Content control. My bet is close to 100 percent of the people reading this post have content in them strong enough for a book. But 22-year-old interns at publishing companies won’t recognize that content. Even the editors, the publishers, the marketing guys — most of them — will not recognize the message you have to offer. Which leads me to…

Avoiding bad things in life. I hate getting that feeling of, “I hope he or she chooses me for X.” Where “X” could be an investment, an acquisition, publishing a book, buying my product, whatever. I try to limit this feeling in my life whenever possible. When you have to deal with more and more layers of people who have to choose you, you don’t get the opportunity to choose yourself (!), which is infinitely more valuable.

Enter Publishing 3.0: How To Professionally Self-Publish Your Next Book

Here’s what I did step-by-step with my latest book for the first month since publication.

1) Build your platform

A traditional publisher is not even going to look at you unless you have your own platform, which means a Twitter following, Facebook following and/or a significant blog following. But if you already can hand-deliver the customers, what do you need the traditional publisher for?

Wasn’t that supposed to be what the publishers would get for you? Don’t they get you in bookstores? The answer is “no.”

Bookstores take very few of the books published by publishers. And whenever you see a book facing forward, or on the front table, or a “staff pick” that means the publisher usually paid to have that special placement. Most books don’t get this. And if you don’t get that, chances are your books won’t sell.

2) How do you build your platform?

Have an honest voice. Don’t be afraid to say things about either yourself or your industry. Provide unique perspective. If it doesn’t bleed it doesn’t lead. Make sure every post or video you do bleeds from the heart, entertains, and educates. In that order.

How do you get traffic? Blog on bigger sites that aggregate bloggers or podcasts or whatever. It takes time to build up. But sincere voices will always rise to the top.

3) Write

This is not a post about writing or how to write a good book. The assumption is that you will write a good book. BUT, two tips: write 500-2000 words every day to keep exercising the writing muscle. And read good writers every day. Then you will write an even better book.

A typical book is anywhere from 40,000-80,000 words. So if you can average 1,000 words a day, seven days a week, you can write four to eight books a year. Or one very very good, edited, revised, professional one. Or 10! Knock yourself out!

I also wanted a high-quality foreword for the book. I was really grateful that Dick Costolo, CEO of Twitter, agreed to do mine. I realize why he used to be an improv comedian when I read what he wrote.

4) Know What You Want

If you are self-publishing then you can publish your book right now without any other effort. Go to CreateSpace (owned by Amazon), check the box that you want to be both paperback and Kindle (it costs an extra $69 to be on kindle), pick a cover, upload your manuscript, and in a few days you will be published on Amazon and people can start buying your book.

If your goal is to have a published book and use it to get customers, consulting gigs, speaking gigs, etc., or a beginning set of readers for your next book, then by all means publish this way. It’s the fastest way to do it. I highly recommend it.

But if your goal is to put out the best possible product, maximize the money you make, and get the most readers, then follow the next steps, what I call “Publishing 3.0.”

• 1.0 was publishing with a traditional publisher.
• 2.0 was when the stigma of self-publishing went away and an entire new artistic outlet was open to millions of people (15 million books published last year versus 300,000 10 years ago). It’s cheap, quick, and easy to get your book published.
• 3.0 is starting right now — where you can self-publish better, more successfully, better edited, better designed, better marketed, and make more money than if you go any other route. The reason this is possible only now is because for the first time, the best editors, designers, marketers are no longer working at the big publishing houses. Instead, they are striking out on their own and independently charging for their services. The demand is there. This route is more expensive than “publishing 2.0″ but is much more lucrative.

5) Editing

Previously my editing was just a spell check. And that was more than some of my mainstream publishers did. My wife asked me if I was kidding on this. But I told her to read my second book and she stopped questioning it. In other words, it was awful.

With my latest book, I went all out. I hired two copy editors to go through the basics on spelling and grammar. Then I hired Command Z Editing, run by Nils Parker, to help me structurally edit, i.e. do the job that editors used to do (example: Maxwell Perkins in the 1930s) but have been sorely lacking in the past 20 years from traditional publishers. Nils has previously edited bestsellers from Tucker Max, Kamal Ravikant, Ryan Holiday, and a dozen writers, as well as written screenplays, books, etc.

Nils and I went back and forth on more than 15 different rewrites for my book. The difference between the original version and the final version is like the difference between chicken shit and chicken salad.

I am not saying “hire Nils” by the way. I’m just saying this is who I used (and paid). Make sure who you use is among the best in the world, or else you aren’t taking advantage of what the Publishing 3.0 world has to offer. Nils and I went back and forth on more than 15 different rewrites for my book. The difference between the original version and the final version is like the difference between chicken shit and chicken salad.

And yes, publishers have editors. Some very good ones. But I specifically wanted to choose my own editor and use an editor that has worked on books that have sold millions of copies. The entire idea of “Publishing 3.0″ is that I am not limited to who is on the publisher’s staff but I can pick the absolute best people in the industry. With millions of books out there, the competition is incredible.

Hiring the best editor, design firm, marketing firm, and audio firms were all part of that. Not just the best around but who I felt were the best in the world.

6) Design

I never liked any of the designs on my traditionally published books, but I had no control over them. I don’t mean this to sound so anti-publisher. But they were busier with bigger authors, and I don’t think they were always able to devote resources to me.

I made sure I put out a product I could be proud of. I used Erin Tyler Design who helped me find the right cover designer, and she also managed the interior design process, which was a lot trickier than I thought.

She designed the spine, picked the fonts, the inside flaps, the back cover, and all the quirks — tables, pictures, asides, etc. — inside the book and then helped format for when I uploaded to Kindle Direct on Amazon.

7) Audiobook

I was at a dinner that Amazon had for self-published authors last October.

One guy who was making a solid living self-publishing science fiction novels told me that he always made an audiobook. I thought that was a horrible idea, and told him so.

But two things about audiobooks:

1. He said, “When people see you have an audiobook, they see your book as even more credible. It stands out from the average self-published book when you have an e-book, a print version, and an audiobook. Plus, the audio book is more expensive, so even though there are fewer sales, it’s decent money.” By the way, if you self-publish, always do a print book at the very least. Even if 99 percent of your sales are going to be e-book.
2. I asked the head of an ad agency what marketing tips he had for my upcoming book. He said, first thing, “Make an audiobook. For your kind of book, people will love listening to it while they drive into work.”

So Claudia, my wife who has been supportive of every aspect of this effort, set up her office in our house to be a mini-recording studio. I wrote to Tucker Max that I was going to make an audiobook. He wrote back:

“James, where are you doing the audio, and who’s editing it? Please tell me you aren’t just doing it yourself with your Mac and a mic you bought online.”

We looked at our Mac and a mic that we had just bought online and decided to go to a professional studio. Tucker suggested John Marshall Media. They had done audiobooks ranging from President Clinton’s autobiography to the Harry Potter books to Freakonomics.

It was a thoroughly annoying experience but it was worth it.

I felt uncomfortable just sitting there for eight hours reading words I had written. For one thing, it hurt. Reading for eight straight hours was killing my throat.

Second, I didn’t want to just read stories I had already written. So I did it totally unabridged and improvised quite a bit, making it somewhat original compared to the book.

But the best reason for doing the audiobook is it forces you to really look at your writing and hear what works and what doesn’t. I rewrote about 20 percent of the book after reading things that didn’t quite sound right out loud.

It meant another round of edits (with the help of Nils) to improve the book, a process I never would have gone through if I hadn’t done the audio version.

8) Title

This deserves its own category. I had total control over the title. My first choice for the book was “The Choose Yourself Era.” But whenever anyone asked me to say the title I had trouble saying it. “Era” sounds like “Error.” One person asked me if it was going to a book about archaeology. So somehow it wasn’t working.

So I picked 10 titles that I liked, combined them with the cover and created Facebook ads that I sent out to all my friends and friends of friends in the U.S. Then I sat back and watched the click-throughs. After a few days and thousands of click-throughs I had my title.

“The Choose Yourself Era” came in a distant third place. “Pick Yourself!” was right above it in second place. And “Choose Yourself!” came in first by far.

I then took the same Facebook approach to pick the subtitle and the final version of the cover design.

Results of the Facebook Title test:

 

9) Marketing

I used Ryan Holiday’s company Brasscheck. Ryan is the head of marketing for American Apparel, and has marketed many bestsellers, including books by Tim Ferriss (“The Four Hour Chef”), Robert Greene (“Mastery”), Tucker Max (“I Hope They Serve Beer in Hell”), and others.

I had never before used an outside agency, always trusting either my own basic platform or a publisher. What Ryan provided was unbelievable. Between his Rolodex and mine we scheduled about 60 podcasts, radio interviews, speaking engagements and guest posts on popular blogs and websites.

There were also some other things that I would not have been able to coordinate: A Reddit AMA that got over 3,000 comments and probably close to a million views over the past month. His company created a SlideShare presentation that became the most viewed SlideShare on the site the week of the launch with over 300,000 views. My schedule the month after launch was non-stop marketing. I was burnt out by the end of the month.

I had also become a fan of Bitcoin. So I set up bitcoin.chooseyourself.us a month before I released the book and became the first book ever pre-released solely on bitcoin. Ryan then got several key media sources to cover this.

I offer to pay people back for the book if they could prove to me that they bought it and read it.

I also wanted to market an offer in the beginning of the book. My goal was not to necessarily make the most money but to make sure the message reached as many people as possible. So on the very first page, before the editorial information and dedication, there is “the offer.”

I offer to pay people back for the book if they could prove to me that they bought it and read it. Then I would pay them back completely for the book (losing money on each transaction because of the cut Amazon takes plus shipping). The idea was I would be happy to give the book for free, but I know people don’t value things they get for free. And I also know most people don’t read the books they buy. Hence the offer.

Ryan was successful at making sure that the offer itself was covered in various media outlets.

Brasscheck also scripted the video trailer that was produced and animated by Simplifilm. I describe the results of the marketing below.

10) Foreign Rights

I found with my prior books that the traditional publishers would more or less wait for foreign publishers to call and then they would sell the rights and my split would be minimal. Typically the split was 50-50, but out of my 50 would come my agent’s split. I was competing with too many of the other authors in the publisher’s stable to get any attention from foreign publishers.

Now I own all the rights to my book. Most people who self-publish aren’t thinking foreign rights. You still have to have someone who is going to be your advocate with the foreign publishers. So I got a foreign rights agency, 2 Seas Agency, to handle all of the foreign rights on a commission basis. They go to book conferences all over the world and have connections in each country.

In June, the first month the book was out, Marleen Seegers from 2 Seas sold rights to: Brazil (USD 2500), China (USD 4300), Korea (USD 5000). She is currently in negotiations with publishers from 10 other countries. The three mentioned above are where  the contracts were finished blindingly fast.

11) Other Merchandise

Since I own the rights I can do whatever I want. Below in the “Numbers” section I describe a bundle I put together combining a hardcover version of the book with three earlier books plus some original writing that was sent out by an e-newsletter company that did all of the fulfillment and split the proceeds with me.

With the help of The Social Pages and Litographs I also made a poster that is designed like the cover of the book when you look from afar but when you get close to it you see clearly all 67,000 words of the book.  I’m also making that into a shirt. What will I do with it? I have no idea. But it’s fun and I wanted to do it.

In the below photos you can see the far away version and the words when you are standing about an inch from the poster.

12) The Numbers

First off, what were my prior numbers? Here are my advances on my first mainstream-published, five books in order: $5,000, $7,500, $30,000, $100,000 and $30,000. Advances are coming down quickly!

My first book made back my advance and with about a 10 percent royalty I probably made another few thousand dollars on it. None of my other books came close to making back their advances.

I don’t have all the numbers on my first five self-published books, but I gave an enormous number of books away for free in order to build up my readership. Almost all of those books I produced for free but my revenues were minimal even though I had many readers for them.

In the first week “Choose Yourself!” was out I made the WSJ Bestsellers List with about 10,000 copies sold. To hit the New York Times bestseller list I can tell you anecdotally (and it depends on the week) that you need about 2,500-3,000 copies sold in your first week. I couldn’t get on the NYT Bestsellers List because they do not look at books that do not appear in bookstores. I’m not in any bookstores at the moment, although I’m working on ways that can change. Suffice to say I would have hit that list as well as the WSJ list.

In the first month I sold 44,294 copies between my paperback, audio, e-book, and even hardcover versions.

The hardcover version was sold via an email newsletter, run by Porter Stansberry, that bundled the hardcover with three free versions of my past books plus an original report written by me. He split the proceeds 50-50 with me after the cost of the hardcover was recovered. I sold about 20,000 through this method in the first month. Email marketing is almost never attempted by mainstream publishers.

Of the remaining 24,000, close to 50 percent was Kindle, 45 percent was CreateSpace and 5 percent was Audible. On all the Amazon Kindle sales, the royalty is 70 percent of the $4.99 cost. On the Audible version the royalty is approximately 52 percent, give or take a few percentage points. On CreateSpace the royalty given my pricing was about 26 percent.

The total cost of everything described above was $31,000 (which can be reduced significantly depending on your specific needs. For instance, not every book needs an audio version and a video trailer), not counting traveling I did for the marketing and other marketing costs involved in building my platform.

I am happy to answer questions about the process in the comments below.

[Top image: Shutterstock]

I’m not a huge fan of banks, but when senior director Michal Panowicz approached me about mBank, my interest was piqued. How could a banking spin-off of BRE Bank and founded in 2000 create one of the coolest, most high-tech banking experiences I’ve seen? The more important question, however, was how could a Polish bank beat the big guys — the Chases, the Citibanks, and the Credit Suisses of the world — to the punch in terms of improved user experience and unique features?

In short, a small group of programmers and finance guys in Warsaw, Poland, did what the rest of the world couldn’t. And, more importantly, they were quite successful.

MBank, in its current incarnation, is very nearly a startup. While they still get some funding from their parent organization, mBank was designed to be a greenfield operation and work independently from the staid old banks that aggravated customers with long lines and odd rules. Now, however, it’s a snappy, surprisingly usable web-only service that lets customers view their transactions using user-experience rules that are more familiar to Steam users than bank customers.

The new mBank is built on a completely responsive design that uses HTML5 and UI tricks to create a unique experience that is more reminiscent of a Windows 8 app than a bank website. While other bank websites show a list of transactions and little else, mBank can show you where those purchases appear in your overall account balance and how and where they fit into your budget. This is done with some clever animations and dynamic objects that are as modern and sleek as an app.

To be clear, banks are still pretty boring. However it’s important that mBank is trying something new. If my own bank, Chase, had something like this — complete with mBank’s gamification aspects, as well as its clever deal offers that mimic the best of Groupon and Pinterest — I’m sure I’d be far more interested in staying on the site. By making the site, for lack of a better word, fun, mBank has changed the relationship between bank and customer. This is important in almost any B2C environment and more important when the traditional customer/business relationship in banking has always been vaguely adversarial. mBank isn’t better, per se, but has done far more about user experience than any other bank I’ve seen. That’s what’s important here — the attention to detail.

I spoke with Panowicz at our Warsaw meet-up and thought it would be interesting to get his input on how to turn a banking website around in a few short years. Panowicz is a former Microsoft employee and a true technophile. He brought a unique vision to a 10-year-old company and turned it around, which is quite important.

Some days you’re on call for weekend news duty and it’s pretty boring and you get tired of just sitting around waiting for something to happen and then this happens. And other times, you’re just sort of hanging out and watching Twitter and HOLY SHIT IS THAT KEVIN ROSE TOSSING A RACCOON?

Why yes, yes it is.

The epic raccoon toss came after Rose heard his dog Toaster “crying and yelping in pain” around 1:00 a.m., leading the Google Ventures general partner to come to the dog’s aid. Rose broke up the fight by picking the offending raccoon up by the sides and HURLING IT DOWN A SET OF STAIRS LIKE A BAWS.

Seriously, the Internet hasn’t seen a raccoon so thoroughly PWNED since this image:

Animal violence critics should note that the toss was in self defense (or rather, the defense of Rose’s best friend). That said, as some YouTube commenters have noted, it’s not clear who started the fight. I mean, the raccoon could have just been minding his own business before Toaster attacked him, for all we know.

Wear a mask and you instantly get painted as a criminal—
Kevin Rose's Raccoon (@TossedRacoon) July 20, 2013

Anyway, Toaster is apparently “ok, but has some minor claw and bite marks,” according to Rose’s video. The entire Internet, meanwhile, is urging Rose to take Toaster to the vet today to get a rabies shot.

We’ve reached out for comment and will follow up with any additional details if Rose responds. In the meantime, this:

Founders – all VCs claim they have your back, but only Kevin Rose will wrestle a racoon for you.—
Benedict Evans (@BenedictEvans) July 20, 2013

About a month after it shut down its app, mobile coupon startup Endorse has been acquired by Dropbox, the team announced on its blog today. The deal follows a number of other recent acquisitions Dropbox has been making, as it looks to add headcount in an increasingly constrained talent market.

Endorse had raised $4.25 million from Accel and SV Angel in 2010, and launched a web version of the product before moving to mobile with the launch of an iPhone app last August. The mobile coupon service was shut down a month ago, with Endorse announcing on its blog that users would have until the end of June to transfer cash that they’d accrued to their bank accounts.

Importantly, we’ve heard that this was an acquisition and not an acqui-hire of the company’s talent, although terms haven’t been disclosed and no one’s really budging on price. (If we can find out more, of course, we’ll update this post.) Last we heard, Endorse had about a dozen employees, the majority of whom will be joining the Dropbox team in the acquisition.

That includes Steve Carpenter, who founded the company as an entrepreneur-in-residence at Accel after selling Cake Financial to Etrade in 2010. Other notable members of the Endorse team include CTO Erik Klein, who had held engineering roles at SofaLabs and YouTube; Jiten Vaidya, lead engineer and former SRS/DBA manager at YouTube; and Franck Chastagnol, former lead engineer for YouTube ads.

Dropbox has been on a bit of a hiring and acquisition spree over the last year, as it purchased photo storage startup Snapjoy, as well as email management company Mailbox. It’s also made a number of significant hires, including Instagram Designer Tim Van Damme, Google’s Guido Van Rossum, and veteran Facebook designer Soleio Cuervo.

The San Francisco Bay Area pays the highest median tech wage, at $123,497, but comes with higher taxes and housing costs, according to data assembled by Good April, an online tax-planning startup based in SF.

Despite the significant gap in wages and costs between the Bay Area and other tech hubs, it doesn’t look like it’s causing a significant talent exodus yet.

The median wage for tech workers in San Francisco, Marin, and San Mateo counties is nearly 21 percent higher than the second highest, Boston, at $102,230. However, while this wage is good for top-flight engineers, it leads to significantly higher costs for entrepreneurs.

Good April found that salaries for a 10-person team, on average, would total $1,234,970 in San Francisco, but only $932,490 in Austin, Texas. The difference in how much equity a founder has to give up can be substantial. If you were raising capital at a $5 million valuation to run your company for one year, you would have to give up 27 percent equity to hire the hypothetical San Francisco team versus only 20 percent for the Austin team.

The high taxes and pricey housing market in San Francisco can hurt both entrepreneurs and employees. Good April co-founder Mitchell Fox argues that companies have to pay a higher salary in order to offset the higher cost of living in the Bay Area; then those higher salaries lead to a higher willingness to pay for a house or apartment.

The cost of buying a home in San Francisco dwarfs other tech hubs, according to median sale prices from Zillow. San Francisco’s houses went for $805,500, a 50 percent increase over New York’s $535,900, and nearly four times the median sale price in Austin, $206,600. The rental market isn’t any better, with the median rental price for an apartment in San Francisco reaching $3,295 in June.

Fox says he recently met an entrepreneur who’s moving his business to Austin, saying, “The business case to move is just too compelling. Austin has everything we need at a much lower cost.”

Matt Mickiewicz, the co-founder of DeveloperAuction, a startup that enables startups to bid on engineers and designers, says data from the platform shows “nobody is leaving SF because of the high costs so far.” He adds that 87 percent of the developers on the site end up taking jobs with a company that did not make them the highest salary offer.

Map via GoodApril.

In case you haven’t heard, 3D printing has entered the mainstream, and it will disrupt every industry’s manufacturing processes slightly differently. Let’s talk about why it will work in fashion.

3D printing is not entirely new to the fashion industry, as jewelry designers have for years outsourced quick modeling jobs to printing companies. But as 3D-printed pieces begin to pop up on the runway and in presentations outside of fashion week as the finished product, it’s worth asking why the method stands a chance of proliferating among designers.

It looks damn good.

Catherine Wales, a designer trained in classic garment cutting at Yves Saint Laurent and Emanuel Ungaro, is currently exhibiting a collection of masks, corsets and helmets at the Arnhem Mode Biennale in the Netherlands. Designers Francis Bitonti and Michael Schmidt collaborated with Shapeways to produce a 3D-printed gown modeled by the burlesque icon Dita Von Teese at a presentation in February.

The results are beautiful. Comprising 3,000 articulated joints and dotted with 12,000 Swarovski crystals, Dita’s gown fits her curves like a glittering Chinese finger trap. Wales’s feathered shoulder piece fluffs and falls like the real thing.

This is art. It isn’t wearable, but it suggests that 3D printing has the finesse necessary to break into an industry known for its attention to quality craft.

It is becoming more and more wearable. 

Printers are getting closer to producing good fabric-like materials, using interlocking structures to create weaves and stitches. Duann Scott, Shapeways‘ “Designer Evangelist,” said that once more fashion designers start using 3D printing, it will make a case for 3D manufacturers to develop more breathable, wearable materials. This is, of course, a chicken and egg situation, as designers aren’t going to want to migrate to 3D printing until they know it’s as good if not better than their current methods.

At the moment, 3D printing may be most compelling to designers when used in conjunction with organic materials. Bitonti told me that he’s currently working on 3D-printed handbags finished with stingray leather, an idea that has a lot of potential. Designers and consumers have a strong historical and emotional affinity to non-synthetic materials like leather, silk and cotton, and they aren’t going anywhere. It wouldn’t be surprising to see designers incorporating complex printed elements with traditional materials in the near future.

It could save young designers.

If 3D printing disrupts mass fashion production, it will do so because it will have become cheaper and more efficient than current manufacturing methods. Ready-to-wear, however, with its smaller production runs, financial insecurity and impulse toward the artistic, is the ideal space for 3D printing to take root now.

The designer Kimberly Ovitz, who showed a small range of Shapeways-printed nylon jewelry with her ready-to-wear collection at New York Fashion Week in February, said that 3D printing revolutionized her production timetable. Consumers could buy the jewelry immediately after her show and receive the product in two weeks.

“I found that there are so many benefits for small designers. You don’t have to deal with minimum or volume issues. You can design as many prototypes as you want as intricately as you want, and it doesn’t affect anything the way it does with clothes.”

For small, young brands, which have a failure rate not unlike tech startups, 3D printing offers the previously unheard-of option to manufacture exactly to order. In a world where botched manufacturing runs and over-estimated interest in an item leads to unusable and unsold stock, printing minimizes risk in a way that never existed before for fashion designers.

It can find a happy medium with handmade.

One of the obvious challenges facing mainstream adoption of 3D printing in the clothing industry is a longstanding appreciation for handcrafted pieces. Would a Birkin bag cost as much as it does if it were not stitched by human hands?

Scott argues that the traditional idea of handcraft is romanticized. Manipulating code to make a dress flow and fall over the human form is the new craft, he said.

But Scott is a Shapeways guy, and not all classically trained designers would agree. Anna Sheffield, a New York-based jewelry designer who experimented with printing finished products for an event sponsored by Shapeways at the Ace Hotel in February, told me that while she sees the advantages of using 3D printing to create a finished product, it’s not right for her brand. She likes the slivers of imperfections that can result from casting.

“In some ways it can be used to enhance the design,” she said. “But in other ways I think it leaves a generic motif on all of the goods, and to me it would be better to make the product and make a mold and cast it and finish or change it in some way. Hammer it. Something that gives it a more sensory feel. I’m a bit of a purist.”

3D printing is, however, part of Sheffield’s arsenal. While she often hand-makes wax models, Sheffield will go digital for repeating patterns, as on a ring of overlapping wheat sheaths. Scaling and altering designs on a CAD file reduces her workload by hours. For designers with an interest in preserving the uniqueness of handcrafted pieces, 3D printing could simply be a standard design tool to be used as needed.

If 3D printing is making moves on manufacturing in general, you can bet fashion won’t be exempt, even if it is initially treated by the press as a futuristic conceit. It’s dubious that the Fashion Institute of Technology and Parsons will start training their students as coders just yet, but printing could easily make inroads in accessories, shoes and non-fabric elements of clothing in the near future. It isn’t hard to imagine that some of fashion’s more avant-garde talents would be willing to experiment with printing in a more substantial way soon.

Welcome one and all to a brand new episode of CrunchWeek, the show that brings a few of us writers together in front of the TechCrunch TV cameras to dish on some of the more interesting stories from the past seven days.

This time around, I was joined by Billy Gallagher and Ryan Lawler to talk about Microsoft’s massive stock price downturn after its disappointing earnings release, the latest rumors of Path raising new funding, and tech taking over Hollywood with Netflix’s bunch of Emmy nominations.

This is a guest post by Ciaran O´Leary, a Partner at Earlybird Venture Capital in Berlin. Earlybird manages €600m in funds and are investors in companies such as Carpooling.com, Peak Games, SocialBakers, The Football App, and Wunderlist. He usually blogs here. He’ll be among those attending Disrupt Europe in Berlin in October.

Some folks consider Berlin to be the next Silicon Valley. Some folks consider it to be a place where a bunch of hipsters are only building fluffy consumer apps, spare-time in between clubbing permitting. Others again are convinced that Berlin is in the tight grips of a clone army. Of course the truth is that it’s a bunch of hipsters and cloners building the next Silicon Valley!

I am of course kidding. I’d argue that all of the above views are exaggerated. But it’s fair to say this: Whereas Berlin’s ecosystem is still very young by any standards (even European ones), it is on a very promising trajectory and is already now one of the great places in the world to build a company – with plenty of room for improvement. If you haven’t read Matt Cohler’s post you should (“These are still the early days, and it’s good to be in on the ground floor” is a nice way to sum it up).

So the first key point I’d like to bring across is that all the excitement should be much more about the trajectory than the status quo.

It’s a movement. Guaranteed 100% organic

So, over the last 4-5 years thousands of startups have been founded, seemingly out of nowhere, some have already claimed their spot as global category leaders, many of the top-tier international investors have began investing here (USV, Benchmark, Kleiner, Spark, Atomico, Founders Fund, Battery, Index, etc.) and the first sizeable exits (at least a few hundred million) have been realized (more on that later). So how did this all happen?

The key thing to take away is that it’s not because of, but despite of what any government or city initiative did. There is no tax program, no special angle to the education system, no initiative to attract tech companies and entrepreneurs, no huge pots of money, no entrepreneurial powerhouse university, etc. – the list of ‘nos’ goes on and on.

That’s what makes Berlin’s tech ecosystem so hard to describe, so hard to nail down to a few points. The Berlin tech community is fueled by talented folks from around the world coming together to build companies, to the backdrop of an urban canvas. In a city which has only ever witnessed change and wants more of it. Berlin’s tech ecosystem is more about the type of people it attracts and the inspirational environment it provides than anything else.

No one is tactically engineering a tech hub – it’s a movement, 100% organic. The cab drivers know all the big startups, the local media has started tech blogs, large real estate owners now specifically construct buildings to suit startups, etc. The tech community is on its way to become the heart and soul of the city. This is also what makes it very different (not better or worse) than other urban ecosystems that are dominated by other industries.

So every $ we pore on to the fledging ecosystem is fuelling a fire that is already burning. We like that because organic things tend to be the most sustainable and it has us bullish about what can come if the community continues on its trajectory.

Berlin and the Urban Entrepreneurship Shift

But before I go in to some of the details on Berlin, its fair to point out there is a bigger trend going on that Berlin is profiting from extremely. For the lack of better words I call it the “Urban Entrepreneurship Shift”:

• The internet in general, open source software, cloud services, app stores, etc. have really liberalized entrepreneurship in every way, also geographically. You can build and scale / distribute products and services from (nearly) anywhere
• Capital is increasingly mobile. Everywhere you look the source of capital matches the increasingly global profile of companies. This is happening as early as seed and later stage companies are finding it even easier to attract very large amounts capital from around the world
• Key to building a tech company and a community of many tech companies however remains the ability to attract and retain top international talent. Talent has also become highly mobile
• International, talented folks have a strong preference for inspiring, English-speaking urban environments with a high quality of life

Therefore: inspiring, English-speaking urban environments that offer a high quality of life are going to become increasingly relevant entrepreneurial hubs: New York, London, Berlin, etc. For those of you who have not been to Berlin: good luck ordering that hand brewed coffee in German. English, Swedish or Hebrew is more likely to work.

The shift to urban centers is a long-term mega trend (even on the US West Coast the increase of activity in San Francisco is notable) and we’re in the middle of it here in Berlin. Long term. This does not mean this comes at a cost to say the Valley, which for the foreseeable future will remain the prime global tech ecosystem. This just means more additional entrepreneurial hubs in urban environments.

Berlin is not the next Silicon Valley. Neither is anywhere else (and that’s OK)

However each hub has a slightly different DNA and whereas its fine to copy best practices and some critical ingredients, I believe that focusing on your own DNA will yield better results than trying to copy each and every element of the Valley or any other tech hub for that matter – that’s why I always cringe at the notion of a “next Silicon Valley”. I’ve tried to sum-up Berlin’s DNA in this presentation:

So really it’s all about the normality of change and an urban green field, paired with the right attitude. I think what you can also take away is that, whereas Berlin is also all about more ‘serious’ linear businesses as e.g. e-commerce or ad-tech, a wild hacker culture – just taking plenty of shots with little experience and even less to lose remains one of the core DNA strands and is a key differentiator of the community for now.

However make no mistake – it’s much more diversified than you might think, ranging from high volume, high failure rates (due the low-cost combined with still low experience) in mobile consumer applications, more and more enterprise SaaS to the cut-throat e-commerce execution skills of Rocket, Project A, Team Europe & Co. There are highly disruptive companies, more linear companies and – yes – still the occasional copy-cats (more on that later and why it has died down significantly).

Entrepreneurship isn’t always ‘cool’ and Berlin can do the hardcore execution and ugly bits also. It’s not a one trick pony and I think we’re better off for it.

The produce and the rise of hidden champions

So what has Berlin achieved? We have to keep reminding ourselves that the Berlin tech scene as we know it today – international teams building disruptive global businesses, is really only 3-5 years old (even most European hubs have 10+ years under their belt, never mind key US hubs with up to 30-40+ years). Whereas the internet has shortened cycles everywhere, Berlin is not going to be a miracle ecosystem that catches up to others overnight that have been around for 10-40 years.

Having said that the number of globally relevant business, created with comparatively little resources have us very much exited about the years to come. You have probably heard of Soundcloud, ResearchGate, Wunderlist, Wooga, Zalando, etc. who have all claimed leadership positions in their markets internationally. Those companies are 3-5 years old – comparing this to some of the leading companies from other European hubs e.g. London (Mind Candy 10 years, King.com 10 years, Wonga 5 years, Hailo 3 years), Stockholm (Spotify 7 years, Klarna 8 years, iZettle 3 years), Helsinki / Espoo (Rovio 10 years, SuperCell 3 years) or Paris (Criteo 8 years, Vente-Privee 12 years) – it’s easy to see that the first wave of Berlin startups that are scaling internationally will really need another 1-2 years to be comparable.

But what has us pretty exited is that this year a bunch of companies have hit the scene that were virtually unheard of until very recently; most of them having already reached meaningful scale and are holding leading positions globally, such as:

• GetYourGuide (globally leading activities platform / market place)
• The Football App (worlds largest mobile football community)
• ProfitBricks (next gen Infrastructure as a Service)
• Auctionata (word’s leading online auction and market place for antiques and art)
• Sociomantic (leading RTB ad tech player)
• TradeMob (large scale app marketing platform)
• Number 4 (SME SaaS, not launched yet but raised a $38m Series A recently – get’s them an honorable mention!)
• Applift (leading mobile games marketing platform)

This is just a selection – but it’s an important sign of critical mass – big companies on great trajectories are now popping up at a higher frequency than 12 months ago.

The other thing that is very healthy it that we are seeing the creation of clusters – i.e. certain verticals where there is real critical mass leading to cross-pollination, e.g.:

• Ad tech: Trademob, Sociomantics, Madvertise, SponsorPay, Adspert, Adeven, Applift
• Gaming: Wooga, Hitfox, Game Duell, Game Genetics
• Vertical Networks / Media: Soundcloud, ResearchGate, TheFootballApp, Tape.tv
• E-commerce: Zalando, Home24, Auctionata, Mr. Spex, Wummelkiste, MySportsGroup, Tirendo

Again just a select few, but nice to see a few gangs forming.

Also the number of US companies setting up shop is increasing – e.g. Fab.com has its European HQ here; twitter, Etsy, google, Microsoft, Amazon etc. all are increasing their presences. To be fair though this is still a weak spot: we should have more established international tech companies with larger presences here. Right, now London and Dublin have the lion-share of these and have much better programs in place to continue to attract such companies.

On exits: the low average age of the companies and the fact that Berlin is just starting out means there haven’t been a lot of huge exits yet. This is not surprising – if you compare average VC hold periods to exit and look at when the most advanced companies in Berlin have raised their first significant rounds (max 2 years ago), at least another 12-24 months before we start seeing the first very large exits would be the norm. But of course there have been some nice liquidity events: Zalando’s secondary priced at $3bn, rumors have it some folks at SoundCloud were able to sell some shares at a significant triple digit million value, Brands4Friends sold for $200m, CityDeal for $1bn (got a nice uplift from Groupon IPO pricing), DailyDeal for $100m. All this in Berlin’s first 3-5 years of getting started. This was just the first salvo that had been largely dominated by Rocket & Co. The more disruptive companies of course take longer and we expect them to be in the next wave, starting 12-24 months from now.

Although to be fair most of the above companies (that are not exited yet) could have been sold for healthy, but not outstanding values over the last 1-2 years; but as a next generation of European VCs and US money is fueling the ecosystem we don’t do that kind of stuff anymore. Good riddance

Not Berlin vs. London, but Berlin AND London AND Stockholm AND…

Whereas competitiveness is a healthy thing, I tire of the “my tech hub is better than yours” attitude, not only because it signals low opportunity costs and insecurity to engage in such a discussion – but much more because I have the firm belief that there are really several great places to build a company, also within Europe. The evidence also suggests nothing else. Hell even in Germany – Trivago, based in Düsseldorf, was just acquired for $1bn – our largest company by revenue – B2X Care, churning out hundreds of millions in annual revenues – is based in Munich.

But here’s the really amazing thing and what matters most to me – Europe is right now in the middle of witnessing the creation of several tech hubs with barely an hours flight from each other: Berlin, London, Stockholm, Espoo (yes, Espoo, near Helsinki), etc. Heck, even Tel Aviv isn’t too far away.

So I think the right way to view it is not e.g. Berlin vs. London but Berlin and London and Stockholm and…. Each have their individual strengths and weaknesses, but together Europe is really a mind-blowing different place in terms of creating global category leaders than even 5 years ago.

No serious participant in the Berlin ecosystem is seriously wasting a single thought on “beating” or “challenging” another tech hub, there is simply too much homework to do here on the ground.

Copy Cat Factories: Deal with it – they are (by shifting their strategy because cloning doesn’t work so well anymore)

To make a long story short: since the daily deal frenzy there has not really been a breakout successful clone created in Berlin. It’s just become a lot harder – innovators are being more aggressive, the web has moved on from plain vanilla – it just doesn’t work anymore to the extent it did.

The clone factories have shifted their model mainly in two ways: i) seeking to partner with genuine innovators, offering their execution and internationalization skills in return for equity ii) building largely vertical e-commerce or other more ‘plain vanilla’ companies, that build on their core execution capabilities – without the pixel-by-pixel copying piece. Like it or not they have contributed to the creation of talent and wealth in the ecosystem.

Local Funding Environment and the Death of the Old School Euro VC

Getting seed financing up to say $500k at reasonable terms really is not an issue and mostly done in angel syndicates. Seed financings in the $1m +/- range usually always have an institutional fund involved. This is a direct result of the young age of the ecosystem – there haven’t yet been too many exits with broad wealth creation, so the capability of private individuals to cough up a few hundred $k is still limited. There is also a bizarre amount of independent and corporate backed incubators, leading to a more than healthy capital base to get started. Even international funds are fueling the seed fire – e.g. Index, SV Angel, Betaworks, Lerer, Battery and many more have made investments at the seed stage in Berlin.

However if you get to the $3m – $5m A rounds things are a little more tricky; too small for the larger US growth funds, too far for the smaller ones to make a larger commitment (although some like Blumberg are very active also at this stage) and there just aren’t that many active $100m+ funds in Europe. However good news there is now really a sustainable gang of high-quality VCs around Europe that is active in this range and willing to invest across Europe and especially in Berlin – e.g. Index, Balderton, DN Capital, ProFounders, Passion, etc. from London – Sunstone from Denmark – Partech, VenTech from France and of course Wellington, Holtzbrinck, Target and Earlybird in Germany, Prime from the Netherlands – there are more I have forgotten for sure. The cluster is arguably still to small but is vastly better than even just 2,3 years ago.

However (interest declared) Earlybird is the only large-ish VC (ability commit to $10m+) with its main presence in Berlin. Whereas capital has become highly mobile and Berlin is a great showcase of this, it’s an obvious weakness. Whereas you can fly-in and make great investments (and many do), the community would benefit from more money and ideas bumping into each other. It may take a while for more established funds to move here, but really promising is the creation of entirely new funds such as Point Nine, Paua Ventures and Global Founders Fund.

However, as mentioned before, it has to be said that in addition to US VCs all of the major pan-European VCs have investments in Berlin, from Index, to Accel, to Balderton to Wellington and others. Even smaller UK funds are very active here. So I am not convinced it’s holding back the ecosystem for now.

In general the European VC landscape is going through a phase of renewal, as old European VC partnerships that lack the agility to adapt to an entirely new environment, where close to all startups are global and demand that VCs see themselves as a product for entrepreneurs, not ‘deal makers’, are dying out. We will continue to see the death of these partnerships over the next years, the strengthening of those that have been willing to make tough changes and the rise of new teams, which is exactly what should be happening in any ecosystem.

Great Trajectory, Lots of Homework left

So it really seems like Berlin is on to something. But on an international scale Berlin is still an underdog. It so far has managed to turn its greatest weaknesses into some of its greatest strengths (don’t have local talent – great let’s get the best from around the world, don’t have a lot of VCs locally – great lets raise from the best around the world, etc).

So Berlin needs to continue to hustle – and that just may be a good thing, I’d like it to stay like that for just a while yet.

P.S.: See y’all at TechCrunch Disrupt Berlin!

The Gillmor Gang — Robert Scoble, John Borthwick, Keith Teare, Kevin Marks, and Steve Gillmor — woke up, fell out of bed, dragged a comb filter across our head. Television is going streamland in a big way, and the Emmy nominations of Netflix’ House of Cards are but the most obvious indicator of the transformation. And what Apple has in store for us is becoming tangibly clear based on its dance with the studios.

Apple is in position now to do to the studios what it couldn’t do to the record business: provide a way to integrate the first and second screens without disrupting revenue. Right now it looks like TimeWarner is to Apple TV as AT&T was to iPhone. HBO ToGo and ESPN are here today on the Apple TV home screen, and my Comcast app lets me manage my DVRs at 30,000 feet. The Gang consensus: Apple goes TV by the end of the year.

@stevegillmor, @borthwick, @scobleizer, @kteare, @kevinmarks

Produced and directed by Tina Chase Gillmor @tinagillmor

Live chat stream

Facebook Home’s launcher was inspired by Lunchables. That’s just one nugget of insight into Facebook’s design process from a presentation it gave to Bay Area designers in May and that it’s now released as a video. The 40-minute clip illustrates how Home evolved, iteration by iteration. Facebook’s Julie Zhuo introduces it saying “the things that the articles never write about is the journey.”

“We all just see the final product, we see the design in its completed state, and we don’t really get to tell the story about all of the things that happen along the way, the ups and downs, the bad ideas we tried, the endless iteration and critique,” product design director Zhuo explains. Designing Facebook Home, embedded below, tells that story.

While that end product hasn’t gained the traction Facebook might have hoped for, it’s slowly getting better. The relentless brainstorming and testing process exposed here are why Facebook keeps evolving, and why Home could eventually become a livable mobile “apperating system.”

Mirroring The Real World

“This is how we should design our products” says Facebook designer Justin Stahl. “I think they should mirror this feeling of being alive. The way we do that at Facebook is by drawing parallels between the real world and the virtual world that we’re building.”

Stahl breaks down some of the key features of Facebook Home by outlining the meatspace experience they mimic:

Cover Feed – “If you think in real life, news tends to find you. You don’t really have to seek it out, and that’s how we designed Cover Feed. I woke up one day…and had the brand new trailer for Iron Man 3 I was totally into [on my Cover Feed]. It was delivered to me. I didn’t have to check a bunch of feeds and bounce between apps. It was as if someone had told me about it and it was available right when I turned on my phone.”

Chat Heads – “It doesn’t matter what I’m doing. If [my friend and co-worker] Francis comes to talk to me, I’m willing to talk to him. I’m not just going to tell him to leave and get back to him later that day. With Chat Heads I can quickly pop in and out of conversations. I can continue what I was doing. It’s just like Francis dropping by my desk every day.”

Stahl then takes a dig at the design of apps like Path, which use showy “fly-out” animations to reveal their navigation buttons. “There’s a tendency to solve tough navigation design problems by doing little magic tricks like having menus fly in out from nowhere. What’s really important for us is maintaining a sense of where you’re at.” That’s a bit rich, considering Facebook has cribbed stickers and one-touch “ok” message replies from Path.

The Social Design Process

The most fascinating part of the video shows early prototypes of Cover Feed, gesture-based navigation, and the app launcher on Facebook Home.

Originally, Facebook considered simply docking a more traditional version of the mobile news feed at the bottom of the Home lock screen. Facebook’s Francis Luu explains that “we put news feed at the bottom so you could just scroll up. And the background was my cover photo.” But that didn’t show how the feed is the “lifeblood of Facebook.” In fact, it conveyed the opposite.

In this design, Luu says “the majority of the screen is just this big photo that doesn’t change much and something that makes the news feed a bad experience is when it feels stale. So we just decided, ‘what if we fill up the entire screen with your friends’ content?’” The video then shows a series of designs for the like and comment buttons, and how it settled on the option to double-tap to Like.

Facebook then tackled how to reveal your apps. Eventually it settled on swipe left for Messenger, right for your last app, and up to open the app grid. The designers originally considered offering more than three gestures to get you to your apps but realized it would confuse people. “What about 5, 6, 8? And you’re like ‘what the hell is going on?’” says Luu.

One solution Facebook tried was swiping to open an overlaid panel of a few favorite apps on top of Cover Feed. Luu says with a laugh that “Maybe instead of swiping up and getting three separate options you got a tray of apps as inspired by Lunchables [the pre-packed kids lunch]. We actually called this design direction Launchables, and we literally turned it into a tray of apps you could curate.

In the end, Facebook stuck with the apps gesture opening a full-screen launcher. Unfortunately at first it came with no widgets, folders or dock. But with time Facebook has begun adding those features, and now Launchables has emerged as Dock, a single row of favorite apps locked to the bottom of the launcher like on iOS.

The video concludes with Facebookers discussing the need to design mobile experiences right on a touchable mobile phone, not some image-editing software like Photoshop. Facebook designed Home using Quartz Composer so they could feel the physics of flinging Chat Heads around the screen. The company’s insistence on careful design led it to have the employees who built Home oversee the productions of the commercials that promote it.

Facebook is famous for its “Move Fast And Break Things” iterative design. By letting its guard down and giving us a peek into its process, we gain better understanding of what works in Home and how it and the rest of Facebook are likely to progress.

Jane Austen? Shakespeare? Tolstoy? Hacks. Beethoven? Bach? Mozart? Wildly overrated. Statistically speaking, at least.

It’s a curious fact that while the long-dead titans of literature and music are revered above all others, they were working in a time when the talent pool — the educated population of the planet — was a tiny rounding error compared to today’s. What’s more, today’s writers and musicians have the advantage of learning from those who went before. Simple statistics implies that most of history’s great works of art must have been created within the last 50 years–

–but you’ve probably never heard of them. These days it’s nearly impossible for even geniuses to elbow their way out of the teeming masses of would-be writers, musicians, and other artists. It was bad enough back in the 18th century, when Samuel Johnson’s biographer Boswell wrote:

I told him that our friend Goldsmith had said to me, that he had come too late into the world, for that Pope and other poets had taken up the places in the Temple of Fame; so that, as but a few at any period can possess poetical reputation, a man of genius can now hardly acquire it. JOHNSON. ‘That is one of the most sensible things I have ever heard of Goldsmith. It is difficult to get literary fame, and it is every day growing more difficult.’

That’s a sentiment echoed more recently by Microsoft Research’s Duncan Watts, who a few years ago performed an experiment that indicated

market success is driven less by intrinsic talent than by “cumulative advantage,” a rich-get-richer process in which early, possibly even random events are amplified by social feedback and produce large differences in future outcomes… someone who is incredibly successful may owe their success to a combination of luck and cumulative advantage rather than superior talent.

What’s more, the traditional gatekeepers have mostly been beaten down by the hammer of technology, and find themselves fighting for smaller slices of a diminishing financial pie. The music industry has been so utterly transformed that we barely remember what it was. The book business is in the throes of the same transformation: Borders is dead, Barnes & Noble is floundering, 60 percent of book purchases happen online, the lines between agent, publisher, distributor, and retailer grow blurrier daily, and anyone who wants to can and frequently does self-publish.

As for television, as Ryan Lawler pointed out a couple of days ago, TV isn’t even really TV any more:

Re: latest Apple TV rumors. Is Ad Skipping really a killer feature? Aren't live sports and @HBO the only reasons left to even need cable?—
Rich Kearney (@richkearney) July 16, 2013

But even as the supply of what the industry cynically calls “content” skyrockets, the demand for it is at best flat. There are only so many books one can read, so much music one can listen to, so many movies and TV shows one can watch, so much content one can consume — and many consumers nowadays refuse to pay for any of the above when free or pirated versions are available.

Paradoxically, in the face of this ever-expanding panoply of choices, today’s audiences are frequently reading and viewing less diversely. It seems that today’s tech has actually intensified the Watts effect mentioned above — meaning that if you don’t already have a brand or a franchise, odds are you’re in big trouble before you even get started. Just ask J.K. Rowling and/or her nom de plume Robert Galbraith.

Or ask Jonny Geller, CEO of major literary/talent agency Curtis Brown, who says: “We used to operate on the 80-20 rule. Now, it’s more like 96 to four.” I’m all too grimly aware of that myself; I was represented by Curtis Brown back when I was a full-time thriller writer. I’m pleased to report that my novels were quite well-reviewed but sold very modestly. Just like J.K. Rowling’s! …er, as Robert Galbraith. (But it’s okay. Writing software is three times as lucrative and sometimes almost as fun.)

And yet.

There remains one last unransacked bastion, one creative castle as yet unconquered by this rising sea of disruptive technology and social change. I refer, of course, to Hollywood. They’re making more money from the box office than ever, thanks to higher ticket prices. The common wisdom is that they’ve become more megahit-driven, but if you look at the numbers, the top 10 releases of 2012 commanded 31 percent of all U.S. box-office income that year, compared to 27 percent and 30 percent 10 and 20 years ago; not exactly a shocking change.

True, streaming has destroyed the enormous DVD profits to which the studios had become accustomed: but at the same time, the rest of the planet has grown enormously wealthier over the last 20 years, and it turns out they like going to movies, too. Almost everyone does. It’s a social event that isn’t really a social event; how great is that? So: “In the past decade total box-office spending has risen by about one-third in North America while more than doubling elsewhere,” saith The Economist.

As a result the studios just keep sailing along. True, Spielberg and Lucas have predicted a Hollywood “implosion” — but they see it happening because “three or four or maybe even a half-dozen megabudget movies are going to go crashing into the ground, and that’s going to change the paradigm.” Not because of Netflix, or piracy, or increased supply, or diminished demand, or the democratization of the means of production. None of those actually seem to be a problem yet.

Is this a false sense of security? A rising tide lifting a fleet of sinking ships? Maybe–but I don’t think so. I think Hollywood is on to something here, and that the death of the DVD was not such a bad thing in the long run.

Movies at home have to compete with every other form of entertainment, and that’s a loser’s game; but if you can drag people out of their living rooms and into your theaters, then you’ve won the battle already. People who see movies in theaters aren’t just absorbing entertainment, they’re attending a performance. In the same way that live shows remain music’s great cash cow, movie theaters can vaccinate Hollywood against Netflix and BitTorrent.

So that big red flag waving over the iconic Hollywood sign isn’t the death of the DVD; it’s the steadily diminishing number of tickets sold. Ticket inflation may keep short-term revenues high, but in the long run it could be what cripples the business forever. The question is, will Hollywood realize in time that they need to take a short-term revenue hit, and lower their ticket prices, in order to keep their audience coming out to theaters? As a movie lover, here’s hoping that the answer is yes.

Image: Kaiju, Pacific Rim. Go see it.