Curate That! Nsyght Makes Twitter Curation As Easy As Hashtagging

There seems to have been a rash of startups based on Twitter in London. Some of the best known are Tweetdeck and Tweetmeme, but others have appeared like (which just moved out to the Valley). But one which has been bubbling under and, like is focused on curated realtime streams, We covered their relaunch last year when they announced Angel funding from a group of investors which included Shawn Kernes (co-founder of Stubhub).

Nsyght’s approach is that the product retrieves information from a user’s entire social graph (Twitter, Facebook, digg, Vimeo, Stumbleupon, Flickr, Delicious etc). Turn on the “everyone” firehouse and it updates very, very fast, due to it’s own bespoke search engine. Nsyght differs from in that it’s far more geared to archiving realtime streams – search is still limited by the same limits Twitter has.

They’ve now released a new feature which focuses on making a combination of twitter’s saved searches and lists searchable. That makes sense. Have you tried making lots of Twitter lists? It’s a pain in the ass. Curating is all very well, but it takes effort. So on Nsyght you create a list and chose to have the list follow just you, then create lists very, very easily.

An Instrument Geekier Than the Keytar? Try the Eigenharp

Just like junior prom, novel musical instruments can inspire both awe and awkwardness.

Exhibit A: the Eigenharp. Part keyboard sampler, part digital woodwind and drum machine, the veritable Franken-synth comes in three sizes: Alpha, Tau and Pico. The Pico is the smallest, cheapest (though still steep) and, in theory, most accessible of the trio. Not to say it’s a no-brainer.

The Pico hangs loose from a neck strap, like an after-hours tie, and has been likened to the Fanfar, the cylindrical thing tooted by a few dome headed-aliens in the Star Wars Cantina Band.

A plastic breath pipe with a reed curves from the top of the Pico. Two columns of nine keys each run parallel down its body, flanked by a touch-sensitive “ribbon” controller used primarily for pitch-bending and for bowing a software-modeled cello.

Each LED-decked, pressure-sensitive key of the Eigenharp is actually three keys in one: The concave center triggers a standard note, while the upper edge triggers a sharp and the lower edge a flat. Octaves can be raised or lowered by tapping on two smaller, circular buttons below the keyboard.

Two identical buttons above the keyboard serve different purposes. One turns the drum loop on and off, and the other — when held down — turns the keyboard into “main mode”: cycle through instruments, change scales, record and edit loops, add or subtract to the percussive beat, and manipulate a slew of other parameters.

Memorizing what triggers what in “main mode” mode takes a bit of fiddling. Luckily, several minimalist diagrams in a printed quick-reference guide — and a series of four video tutorials on a packaged thumb drive — flatten the learning curve a bit. The QuickTime tutorials are taught by optimistic-sounding Nick, “a musician and demonstrator at Eigenharp,” and they’re supplemented by an online support forum at

Obviously you’re supposed to play the Eigenharp in front of your weirded-out friends, not a computer screen. Nonetheless, the firmware-free instrument has to be plugged into a computer by USB 2.0 to operate.

Therein lies a bummer. The scrollable EigenD browser, a software app that comes with the Eigenharp, helps visualize the Eigenharp’s internals. On it, you can change instruments, build different drum kits from a vast library of loops, add effects, etc.

(The company is also phasing in Belcanto, a “command and control language” in which “words are defined as short sequences of notes on the major scale” of the instrument. Not, probably, for novices).

The Browser is super simple to navigate, but the Eigenharp is a resource hog. It takes a buttload of RAM (2 gigabytes or more) to seamlessly jam. In our tests, the Pico’s lights often flickered on and off and just as often the instrument crashed, prompting much frustration and many MacBook Pro reboots.

The Pico comes preloaded with seven software-modeled default instruments: a Steinway grand piano, Rhodes and Wurlitzer electric pianos, an easily manipulated Alchemy synth and — calling upon the breath pipe — a clarinet and a cello. All are stored as Soundfonts, an age-old audio format.

Users can add their own Soundfonts, but to convert existing sound samples you’ll have to purchase a third-party app such as CDXtract for $139. To our surprise, Eigenlabs doesn’t offer any recommendations for free, high-quality Soundfonts on the Web.

The Eigenharp has the power to both transfix and confound. When it’s not crashing, it’s like tickling Buddha: totally fun, even if it doesn’t make intuitive sense at first. Once the software bugs are worked out and the price slides down a bit, the Pico will live up to its promise.

WIRED Multidirectional velocity and touch-sensitive keys are a joy to touch, and leave you uncallused. MIDI support. Could earn you giant bags of Imperial credits if you’re busking in Mos Eisley.

TIRED RAM-demanding software takes up a lot of space, and lags. No physical on/off switch on the instrument. Zero WiFi support. More Soundfonts or an accessible dev tool, please.

First i/o Ventures Demo Day Ever: Apps, Marketplaces And Facebook, Oh My!

I’m here in the i/o Ventures incubator, aka “a really geeky cafe” having just wrapped up a presentation of six i/o companies — some that we’ve written about before and some that haven’t yet launched (we’re looking at you Skyara). My rough notes on the companies presenting below:

App Bistro — A marketplace for Facebook business related apps, App Bistro attempts to circumvent some of the challenges around Facebook fan pages, giving brands an alternative to spending 1000s of dollars to market their apps, through an app store that lets users rate an review apps for businesses, which Facebook does not yet provid. Currently there are 20 million Facebook fan pages half of them for local businesses. App Bistro intends to monetize with a 70.30 revenue split, listing fees, sponsored placement.

Socialvision — Social Vision believes that the future of video viewing is in viewing parties and their consumer app, YouTube Social allows you to invite your friends through Facebook, and watch a video simultaneously. Currently partnering with Direct TV, Social Vision intends to monetize by proving platforms for content companies to hold their own viewing parties.

Anomaly — Anomaly is an attempt to “make the web personal” — an algorithm that provides personalized curated evolution of the web, which is a never ending firehose of information. The Anomaly algorithm finds out what you’re interested and serves it up in order of relevance. Their recent Twitter application was hailed as “a newsfeed for Twitter” and apparently increased Twitter userstream engagement by a multiple of three.

Damntheradio“If you’re going to promote anything you between have a social media presence,” says Johnny Hwin founder of loyalty and rewards based marketing platform Damntheradio, which has been cash flow positive since July. Capitalizing on the universal need to GET MORE FANS, Damntheradio helps businesses reward fans in exchange for their social actions. Currently just on Facebook, the Damntheradio social reward platform eventuallu wants tohelp businesses connect across all consumer touchpoints, social networks like Foursquare and Twitter, mobile, Google TV, Google car.

Skyara — Skyara, which hasn’t launched yet is an Etsy/Airbnb for experiences, targeting people who ask, “What is there to do?” Businesses who have experiences to offer can connect with people looking for things to do. An experience recommendation engine, Skyara has the potential to offer cool food experiences in SF beyond opentable, like going go to a beer tasting with i/o Ventures partner Paul Bragiel for example. Despite it’s still being in stealth mode, Skyara has already has a populated marketplace.

AppRats — AppRats are Facebook apps that cater to different brand of celebrity than that of TV, and radio, positing that celebrities need different set of skills for the Internet, providing platforms for celebrities who want to engage with fans via Facebook app. AppRats currently works with 50 our of the top 100 YouTube celebrities and hopes to add more to the list.

Stay tuned as I am covering this live and updating this post with our previous coverage, interviews and more info from the event.

Introspectr Searches Your Social Streams

We are inundated with so many social streams that it is easy to forget where exactly we read something. For instance, there was a story earlier today on Twitter showing better clickthrough rates than Facebook. I know I saw it somewhere, but was it Twitter, Facebook, or in an email? It’s easy enough to search the open Web, but how do you search all of your personal information streams at once?

Introspectr, a personal search engine still in private beta, is part of a new class of startups trying to tackle this problem. (The first 100 people to click on this link will get an invite). You give Introspectr access to your Twitter, Facebook, and Gmail accounts, and it indexes them for you, along with the content of any email attachments or the underlying pages of any links. Then you can just search for any term and up come all the Tweets, emails, and Facebook messages where that might appear.

Another startup in this class is Greplin, which is a Y Combinator startup we’ve covered before. I’ve tried both. Neither one gets it exactly right, but they both point in the right direction. For instance, Greplin does not index the pages that people you follow are linking to. So unless the keyword you are searching for is in their Tweet, you are out of luck. But if someone Tweets, “Check this out” with a link to an article about clickthrough rates, Introspectr should be able to catch that.

Introspectr, however, doesn’t seem to update its index in realtime. You have to do that manually if you are searching for recent Tweets, or emails. And it doesn’t yet search your Facebook News feed, only your inbox messages. Doing a few random searches of words in my Twitter stream, Introspectr is hit or miss (for some reason Greplin isn’t showing me any Twitter results even though it shows that my Twitter account is supposedly indexed). When it finds the right Tweets or emails, it’s great. But this is really a feature Twitter should have. As part of Twitter search, you should be able to search only your own stream. And Google or Bing should add a similar type of social search functionality to their larger search engines. It’s such an obvious feature. But until they do that (which could be years), startups like Introspectr and Greplin are paving the way.

A new class of personal social search companies aare tackling thsi

Posterous iPhone App Will Make You Finally Get A Posterous

At least it did me. Touted by co-founder Sachin Agarwal as a one stop shop for all your sharing needs, the Posterous app (now available in the App store) is extremely intuitive to use, and you don’t even need a Posterous to use it to start uploading photos, video and text, which, if you’ve enabled the Posterous “Autopost” feature will also post to your Facebook, Twitter as well as 26 other social sites including Flickr, YouTube, WordPress, Vimeo and Tumblr.

While you might be experiencing iPhone share fatigue (Instagram, Twitter, Tumblrette, WordPress and many others allow you to upload content directly from your phone) Posterous has always modeled itself on providing its pretty fanatical userbase with ease of use, the original idea of the service being that you could send an email to [email protected] and get a blog back, to which you the could send any other subsequent posts to [email protected]

The Posterous mobile app takes off on this basic “no need to log in” philosophy, but supports geolocational tags, category tags and various levels of editing and privacy. And despite being buggy at points (one of my test posts posted twice, which was confusing), it’s pretty impressive how much you can actually do from the app (for example I set up my whole Posterous account) as opposed to WordPress, which has the effect of making you feel immobilized when blogging on the go because it does not allow you to upload media other than photos and lacks social sharing functions.

Winning “Keep It Simple Stupid” product strategy aside, it’s really hard not to root for the YC-backed Posterous; Their recent skuffle with Twitpic solidified them as champions of user portability which is always a crowd pleaser. Their user traffic has also risen accordingly boasting a 40% increase since June.

Currently funded at $5.14 million, Posterous’ future plans for the iPhone app include building the ability to directly edit posts from the app, landscape post viewing, multiple photo selection and showing attachments as actual thumbnails.

Information provided by CrunchBase

Celebrity Geo-Stalking In Real-Time. Finally. JustSpotted Launches Next Week

In the age of location updates, status updates, and tweets, it’s a wonder that more people aren’t out there stalking celebrities. I mean, people were doing that long before any of these services existed, and these new tools make it significantly easier. And now comes another new tool to make celebrity real time tracking even easier: JustSpotted.

Obviously, they’re not positioning the tool to be used for stalking. Instead, it’s meant to give fans an idea of what their favorite celebrities are up to at any given moment. Oh look, George Clooney is in Spain right now. Angelina Jolie is in France. And it’s being billed as a way for celebrities to better connect with their fans.

So how does JustSpotted get this celebrity location information? It’s a combination of data from Twitter, Facebook, and Foursquare, alongside their own data they’ll be collecting from users who actual spot celebrities in the wild.

The service, which is launching in one week, is the latest creation by AJ Asver, Dilan Jarawardane and Benjamin Tauber. If you’ve heard any of their names before, perhaps it’s because you’ve heard of Scoopler, the real time search engine that launched amid some fanfare back in early 2009 and got backing from Y Combinator, Ron Conway, Michael Birch, Avalon Ventures, and a few others.

But just like former rival OneRiot this morning, Scoopler is now ditching real time search in favor of this more focused JustSpotted idea. “We’re using the technology we developed while working on real time search to aggregate all the sightings, Twitter updates, status updates, news articles, blog posts — pretty much everything on the web related to a celebrity and put it all on one destination site,” Asver tells us.

We’re using technology to refresh a space that really hasn’t changed that much since TMZ and Perez Hilton moved in and started blogging.  We’re able to aggregate and produce 100X more content that most of these sites but without having to hire a huge team of reporters,” he continues.

Obviously, celebrity news/information is big business so this pivot seems like a smart one. We should know more about how well it actually works next week, but for now, these are the core features of JustSpotted:

  • The JustSpotted “Globe Spotters” map, which shows real-time celebrity sightings from around the world. By aggregating the information available from all other services (Twitter, Foursquare, etc) with the reported sightings by fans, JustSpotted has created a fluid world map that will allow you to easily see where your favorite celebrities are right now.
  • One-stop destination for over 700 celebrity sightings everyday; this is 100x more than any other celebrity news site..
  • Editorial team to produce engaging breaking news content based on the incoming sightings and updates
  • Up to the minute user updates for celebrity fans in real-time

I Got a Pony! I Mean, Reid Hoffman Is My Guest on Ask a VC this Week

File this under “ask and ye shall receive part two.” Reid Hoffman– uber angel turned Greylock partner– will be my guest on Ask a VC this week.

There are plenty of things to ask Hoffman about. He was an angel investor in some of the most pivotal Web 2.0 companies, including Friendster, Facebook, Six Apart, Digg, Zynga and LinkedIn, which he co-founded.

Hoffman was heavily courted by most top tier VC firms for years, and many people were surprised when he finally capitulated and joined Greylock rather than starting his own firm ala fellow Web mastermind Marc Andreessen. I plan to ask him what was so special about Greylock, and about the new seed fund launched at Disrupt.

What do you want to know? Email you questions to AskaVC(at)TechCrunch(dot)com.

AppBistro Wants To Give Every Service With An API Its Own App Store

These days, it seems that every startup worth its salt (or at least, a lot of them) are offering some sort of API — an interface that allows third-party developers to interact with the startup’s data. The benefits to offering an API are clear: a developer community can build cool stuff on top of your service faster than your company can, and you can hopefully build a greater userbase as a result.

Once you have a community building on your API it’s obviously a good idea to showcase the apps they’ve built to users, but this can get tricky — it’s not trivial to manage a directory of apps. TechCrunch Disrupt finalist AppBistro wants to make this easier, and tonight it’s previewing a product called AppBistro AppStores at I/O Ventures Demo Day that may be one solution.

CEO Ryan Merket says that companies often consider creating a directory of applications that are tapping into their API, but give up when they realize how much legwork is involved. AppBistro already had to solve this problem to build its core product, which is a Facebook Page app marketplace. And with AppStores, the startup is going to whitelabel this underlying technology so that other companies can quickly launch their own directories.

So what exactly does this technology entail? Merket says that most of the front-end work would be fairly trivial for another company to build itself, but that the AppStores system will include features like threaded commenting to facilitate communication between a service and its third-party dev community, and queues to help ingest new apps. AppBistro will also allow other companies to use its payments system, so they could conceivably monetize by selling these third-party apps built on top of their APIs.

Merket thinks that most services will initially use these AppStores to promote third-party apps for free, but there’s definitely a trend toward selling web apps at a premium (see Google’s upcoming Chrome Web Store, for example). And it isn’t hard to imagine a world where a web service gives a third-party app living on its API some prime directory real estate in exchange for a cut of their proceeds.

The feature isn’t live yet —it will launch in November with a handful of beta partners including email marketing firm Constant Contact (Zappos is in talks with AppBistro as well), with plans to launch the white-label platform more broadly in the next few months (there’s a waiting list here). In addition to the AppStores product, AppBistro also intends to keep pushing forward with its core Facebook app market.

Information provided by CrunchBase

PlayFirst Plays Its Way To $9.2 Million In Series D

Gaming startup PlayFirst has raised $9.2 million to expand its casual gaming experience into mobile and social, raising its total funding to $35.7 million. The Series D round was split into $5.2 million of VC funding from existing investors Mayfield Fund, Trinity Partners, and Rustic Canyon ventures and $4 million in debt financing from Comerica bank.

PlayFirst was founded in 2004 and includes such titles as Diner Dash, Cooking Dash, Wedding Dash, as well as Chocolatier and Dream Chronicles, with the “Dash” triumvirate of games clocking in over 100 million play sessions to date. The company plans on using the financing to bolster its social and mobile gaming thrust, like just about everyone else in the entire sector is doing at the moment.

Along with the financing, PlayFirst also announced that former PlaySpan Chief Marketing Officer and Harvard MBA Eric Hartness will join the San Francisco based startup as general manager of social games, Loomia’s Matt Levy will be coming on as Chief Architect and Playdom’s Lars Berg will be joining as senior product manager.

The company currently publishes games for the PC, Mac, iPhone, Facebook and console platforms but is looking to expand, says PlayFirst president Marni Baker:

“We will continue to aggressively optimize the PlayFirst brands that consumers love, like Diner Dash, to social and mobile platforms and look for growth through partnerships and potential acquisitions.”

Information provided by CrunchBase

Google Instant Hits Mac Chromium, Exits Labs On Windows — Full Chrome Feature Soon

A month ago, when Google unveiled Instant, their new search-as-you-type feature, I thought it sounded great except for one little thing: I don’t use that often to search anymore. That doesn’t mean I don’t use Google — I do — I just use it in Chrome’s Omnibox (the URL/Search box that’s baked into the browser). And I’m hardly alone there. When asked when Instant would be making it to browsers search boxes, Google stated that it would come “in the next few months“. Luckily for Chrome, that’s happening much quicker.

That really shouldn’t be a surprise considering that Google also makes Chrome. But it was still impressive that just 9 days later, an Instant test started showing up in the Labs area of Chromium (the open source browser behind Chrome). Sadly, it was a Windows-only test for the past several weeks. But as of the most recent nightly builds of Chromium (which is already on version 8), it’s now working on Macs too. And based on the progress on the Windows side of things, it looks as if it’s getting ready to roll into Chrome itself shortly.

To enable Instant in Chromium for Mac, you have to type “about:labs” into the Omnibox, and you’ll be taken to a page with the various Chrome Lab options. Once you enable Instant here and restart your browser, it will be ready to roll. It works just as Instant does on — you start typing and Google search results start to appear in your browser window. One thing I didn’t realize though is that if you type a URL such as:, it will immediately take you there without you having to hit enter as well. Nifty.

Meanwhile, over on the Windows side of things, Instant has already graduated out of Chrome Labs as of today. It now exists as an entry in the preferences section of Chromium and when the box is checked to use it, an info box pops up to let you know more about the feature, as Google Operating System points out.

Both of these updates likely mean that Instant will soon be making its way as a standard (optional) feature in Chrome itself. As for other browsers, they’ll undoubtedly need plug-ins to make Instant work, and you can bet Google is working on them as we speak.

Update: It looks like the dev channel of Chrome was just updated to version 8 today as well. The Mac version doesn’t yet include Instant, but it’s only slightly behind the latest Chromium build, so I suspect it will in a few days.

TC Teardown: 13 Ways To Get To $10 Million In Revenues (Part II)

Editor’s note: This post is the second part of an analysis of different consumer Internet business models by guest author Steven Carpenter. It is suggested that you first read Part I.

Most consumer Internet startups fall into a baker’s dozen of possible business models. In the first part of this post, I tried to lay out the three main buckets those business models fall into (media, paid service, and physical commerce) and then began to sketch out the first four business models (search, gaming, social networks, and new media). In my analysis, I include a rough financial model showing the key drivers necessary for each different type of business model to generate $10 million in annual revenues.

In this post, I continue with the final nine business models (marketplace, video, commerce, retail, subscription, music, lead generation, hardware and payments). As I mentioned last time, this list is not meant to be exhaustive but it should cover most consumer Internet startups today. Please feel free to comment or email me at tcteardown at gmail to let me know what I may have overlooked or help me flesh out my analysis. You can also view, download, and use each of the below financial models here.

Type 5: Marketplace

As I wrote in detail in the Teardown on hand-made goods marketplace Etsy, online marketplace companies create efficiencies between buyers and sellers that are difficult to achieve in the real world. The leading online marketplace is eBay, which happens to run the default sale process as an auction, but fixed price sales have emerged as competitive due to their simplicity and ease of use. Marketplace companies make money by getting as many people as possible to put their goods up for sale and charging a nominal fee for those listings. The more products available for sale the more buyers are attracted to the platform, and the higher the likelihood that a sale will be consummated, generating a commission for the company. Due to the network effects of marketplaces and small fees, these businesses are notoriously difficult to achieve critical mass and take a long time to build. But once they do, these companies tend to have a long, profitable existence. Newer listing companies, like AirBnB, which focus on higher price points ($100+), may achieve scalability faster than traditional product marketplaces.  In my financial analysis below, I estimate that a typical marketplace would require 2 million listings a month generating gross sales of $12.5 million a month in order to achieve $10 million worth of annual fee and commission revenues for the marketplace itself.

Key Drivers:

  • Listings
  • Listing Fee
  • Sales
  • Commission

Type 6: Video

While the cost of video production has come way down, creating high-quality video content still requires a moderate investment and high level of skill. Innovation in the video space has seen the use of freelance video producers who charge $200-$300 to produce and edit a 5-minute, professional-looking video on a variety of subjects. Once you have a handle on production, video companies need exposure to as broad an audience as possible, so distribution is key. Video ad rates are typically amongst the highest in online media ($15-$20 CPM) but a viewer will only see one ad per viewing. Therefore, the number of ad impressions is critical because the broader your audience, the higher you will rise in importance with the online media buyers. Most media buyers will not even consider your videos as a buy until you can guarantee their clients exposure to tens of millions of viewers.  An Internet video company would need 120 million video views per month at an $8 CPM in order to reach $10 million in annual revenues.

Key Drivers:

  • Unique Viewers
  • Ad Impressions
  • Sellthrough Rate
  • CPM

Type 7: Commerce

Selling physical goods online is one of the more proven consumer business models. With Google’s ascension over the past decade, e-tailers are getting smarter and smarter about driving cost-effective traffic to their offerings via free search engine optimized pages as well as paid keywords. Social media via Facebook and Twitter has become another main activity to aggregate purchasing intent; Groupon, for example, drives more than 50% of its traffic from Facebook and Twitter. Creating unique community experiences, like Threadless and ModCloth, is another innovative way to increase customer loyalty and repeat purchases, while keeping the marketing spend low.

Once you drive potential consumers to your offering, you need to convert those people into paying customers. Because of these free and low-cost direct marketing channels, it has never been easier and more cost-effective to launch an ecommerce business. That said, fulfillment, customer service, and managing a warehouse is incredibly complicated, so attaining profitability for these companies can take years.

Key Drivers:

  • Uniques
  • Conversion Rate
  • Average Spend
  • Gross Margin
  • Acquisition Cost

Type 8: Rental

Similar to commerce companies, rental startups like Chegg, Zipcar, and RentTheRunway, sell access to a digital or physical good. The biggest difference with these companies is that they are selling short-term access rather than ownership, so how frequently they turn over their inventory along with the average rental rate and frequency of rental are the main drivers of the business. Cost effective access to inventory and how many times an asset needs to be turned over to breakeven are keys here.

Key Drivers:

  • Uniques
  • Conversion Rate
  • Average Rental Rate
  • Repeat Purchases
  • Customer Acquisition Cost

Type 9: Subscription

Subscription companies sell access to a premium service recurring on a monthly, quarterly, or annual basis. Subscription businesses are typically either content (music, video), information-based (financial, news), access-based (LinkedIn), or data services ( Regardless of what kind of premium service you are providing, the single most important metric is customer lifetime value (LTV). LTV incorporates your churn rate (what percentage of your customer base stops paying you each month) and dictates how much you can spend on customer acquisition. Once subscription-based businesses mature, they are incredibly predictable and profitable—see Netflix—because the company knows how to aggressively and cost-effectively acquire a customer based on expected margin. These kinds of businesses should never spend more than 40% of expected LTV on marketing to ensure profitability. Like marketplaces, subscription businesses often take several years to get to scale but if they hit 50,000 subscribers, they are typically around for the long haul.

  • Uniques
  • Conversion Rate
  • Customer Acquisition
  • Churn Rate
  • Life Time Value

Type 10: Music

As I wrote in the Teardown on Pandora, consumer audio/radio startups are difficult to monetize because they are typically amongst the lowest-valued forms of advertising. It makes sense because audio ads are not actionable, and display ads often get ignored (music apps tend to stay open in a browser tab in the background). The other challenge to audio companies is access to cost-effective content—music rights are difficult to secure and typically cost-prohibitive. Pandora has shown that a sustainable business can be created, but it also takes huge scale (10 million+ users) to reach that critical point.  If you can attract 10 million unique listeners a month and show them 40 ads each at a $2 CPM, plus you can convert 1 percent of those into paying users of some kind and squeeze out an extra $2.50 from each of those, then you can get to $10 million in annual revenues.

Key Drivers:

  • Uniques
  • Ad Impressions
  • CPM
  • Conversion Rate
  • Upsell Value

Type 11: Lead Generation

I have found that lead generation businesses are amongst the most widely followed, least understood of the 13 consumer models. The reason I say that is not that entrepreneurs don’t know what the model is, they do, but that the scale required to generate a sustainable lead gen business is not appreciated. Lead gen businesses need to do four very difficult things well:  1) drive a ton of traffic; 2) get people to click on offers; 3) convert a significant portion of those clicks to complete the offer; and 4) have enough high-value offers that the company generates enough revenue. Successful companies here either focus on a vertical, like financial services, that pays high bounties ($50+) or they have figured out how to encourage significant volumes of repeat purchases. The challenge with financial services lead gen companies is that customers don’t tend to turn over their credit card company or open a new brokerage account several times a year. A startup like Hunch, if it chooses to monetize via leads, has a shot at increasing repeat purchase volume due to its personalization engine and forecasting demand.

Key Drivers:

  • Unique Visitors
  • Offers Viewed
  • Conversion Rate
  • Affiliate Cost Per Action

Type 12: Hardware

Perhaps the most traditional business model of the group, hardware companies manufacture a physical good and then distribute the product through online and offline channels. Hardware companies make money based on retail price less cost of goods sold, minus marketing costs. Hardware startups, such as Kno, and Tivo and mobile phones before that, are bundling hardware with ongoing services. There are three factors that lead me to believe that we will see an explosion of innovative hardware companies over the next few years: 1) manufacturing costs in China continue to come way down as is their ability to cater to customized, small runs; 2) software is becoming easier to update remotely; and 3) the ability to bundle unique services on the devices. This is a space to watch.

Key Drivers:

  • Units Sold
  • Gross Margin
  • Marketing

Type 13: Payments

Payments are a volume-based business. These companies are charging pennies for each transaction that flows through their systems, so the biggest drivers of these kinds of businesses are the number of customers that have access to your payment method and the size of the average transaction. The characteristics that make up a good payments or financial services company are the number of high-quality distribution deals you can enter with a customer base that has demonstrated it will pay for goods and services.  You need one million customers a month making payments of at least $25 to get to $10 million in annual fee revenue, assuming a 3.5 percent fee.

Key Drivers:

  • Unique Users
  • Average Payment
  • Transaction Fee

Former Google CIO Douglas Merrill Wants To Reform Payday Loans With ZestCash

With more than 60 million Americans considered “underbanked,” meaning they have no access to credit or conventional banks, there have been a plethora of companies that have emerged to help better serve this community through technology. GreenDot, PayNearMe and others all offer banking options to the underbanked. Today, former Google CIO and VP of engineering Douglas Merrill is launching a new product today, called ZestCash, to serve the underbanked that aims to legitimize the payday loan industry.

Payday loans are common amongst consumers who don’t have the credit to take out a standard loan through a bank. Payday loans shops allow users to pay a fee to borrow a certain amount of money. For example, a consumer will on average pay $60 to borrow $300 for 14 days. After 2 weeks, the borrower must pay the entire loan and fee back in one payment. If the borrower cannot pay the loan back, then he or she can get an extension but will need to pay another $60 for the additional time. ZestCash says that the average payday loan gets rolled over 6 times, which means the average borrower pays $420 in fees to borrow $300 in principal. Last year alone, 30 million Americans took out a payday loan.

ZestCash wants to offer a better alternative for those who are forced to take out these immediate loans. With ZestCash, borrowers pick how much money they want to borrow and for how long. As they pick their loan terms, the company clearly displays their weekly payment, allowing users to adjust the terms to arrive at a payment that is manageable for them. Instead of paying the money back in one big balloon payment, borrowers can pay back their loans in small chunks over time.

For now, ZestCash has a loan limit of $500, but this could expand in the future. Additionally, ZestCash will be available in Utah, and will slowly expand to other states in the U.S. over the next year. In terms of payments, ZestCash will auto debit people’s accounts on the dates their payments are scheduled for. And while most payday loans are processed through brick and mortar shops, ZestCash operates solely online. When someone signs up for a loan they also get a full payment schedule of when every payment will come out of their account. The startup also promises flexibility when dealing with individual borrowers and late payments.

While Merrill, who left Google in 2008 for music giant EMI Group, has the technology end of things shored up for ZestCash, his co-founder and chief risk officer for the company, Shawn Budde, is helping lead the banking part of the platform. Budde served as the Senior Credit Officer at Capital One and managed their sub-prime credit card business with earnings in excess of $1 billion.

It’s hard not to be bullish about a service that tries to legitimize services for the underbanked. And as we’ve seen from the wild success of GreenDot, this can be a profitable business as well.

ZestCash has raised an undisclosed amount of seed funding from Flybridge, GRP and a number of angels.

Information provided by CrunchBase

Nick Denton: Zuckerberg’s Original Idea for Facebook Was Dark Facebook.

Facebook CEO Mark Zuckerberg is mentioned 10 times in Ben McGrath’s much ballyhooed New Yorker profile on blog impressario Nick Denton. The most interesting mention is in the context of a story about Zuckerberg and Denton serving on a panel together at a News Corp. retreat in Monterey, a fact which in and of itself is kind of ominous:

“I actually like the guy,” he said. “Apparently, his original idea for Facebook was this dark Facebook. Like, the idea was that it was going to be a place for people to bitch about each other, and then it evolved. It was interesting how agnostic he was about which approach to take.”

Hmmm a “Dark Facebook” … Sounds a little like Gawker. Maybe Denton, who recently published “Mark Zuckerberg’s Age of Privacy Is Over,” (which is surprisingly not about the fact that Zuckerberg recently befriended Mike Arrington) is projecting, attempting to meta analyze the concept of web privacy by invading Zuckerberg’s with a paparazzi lens. In any case the piece, which definitely erred on the “dark” side of media coverage, garnered 300,000 + views.

“’Zuckerberg is the Angelina Jolie of the Internet,’ Denton explained, in response to a critic who charged him with aspiring to ‘no higher principles whatsoever,’ noting with particular disapproval the exposure of the girlfriend. ‘His lovers, friends, and acquaintances—like those of any other celebrity—are caught up in the vortex,’ Denton went on. ‘He has to make a choice; and they have to make a choice. And none of the choices—retreat from the public eye, abandonment of friendship—are palatable.’”

A “Dark Facebook” where perhaps people could finally get the “Dislike” button they’ve been clamoring for is an interesting concept to ponder, and Denton describes Zuckerberg as “agnostic” as to whether or not to go over to the dark side, almost as if he had flipped a coin on which one he should follow through with. Denton, who is described as hiding under a cloak of his own autism in the New Yorker piece, attributes Zuckerberg’s matter-of-fact demeanor to a condition of Asperger’s.

“But for people like Zuckerberg it’s more like Asperger’s, that they lack something essential and don’t have an instinctual understanding of human behavior. That’s why he ended up creating algorithms to explain it.”

We’ve now seen multiple press points and an entire movie highlighting the supposed “dark side” of Facebook, perhaps Denton’s anecdote is another sign that there is actually a strand of dark in the social network’s DNA?

Genius: Facebook Texting Users Temporary “One-Time Passwords” To Use On The Go

For all the controversy they create with privacy issues, there’s no denying that Facebook has good ideas (well, unless you’re Trent Reznor). The latest feature they’re starting to roll out today is very, very smart: one-time passwords.

We’ve likely all had the situation where we’ve logged into some account at an Internet cafe, library, or friend’s computer and worried that we forgot to log out and/or accidentally saved our passwords on that computer. Facebook’s new feature allows you to simply text “otp” to 32665 from your mobile phone (the one associated with your Facebook account) and you’ll immediately receive a temporary password that can only be used once and will expire in 20 minutes. Brilliant.

The only downside seems to be that you need to remember that texting shortcode, but perhaps they’ll put a link prominently on their mobile site and/or apps.

On top of one-time passwords, Facebook is finally rolling out the ability to sign out of your account remotely. This obviously also solves the problem of worrying you forgot to log out of your account on another machine. Google and other services have had this for a while, and it can be very useful.

In your Account Settings page, Facebook also now shows you your period of last activity on the service, just in case you’re afraid someone has accessed your account. This is also similar to what Google does with Gmail, but it’s laid out in a much nicer way on Facebook — including the approximate location of the person and what device they were using to access the account (Google lists both of those things as well but in a much more computerized format).

Facebook also notes:

Lastly, when people log in to Facebook we will regularly prompt them to keep their security information updated. If you ever lose access to your account, having this information helps us verify who you are and get you back into your account quickly.

Speaking of Google, they’ve also been recently stepping up their game with regard to security. Last month, they started enabling two-step authentication which requires you enter a username, password, and secret code sent to the mobile phone associated with your Google account.

Information provided by CrunchBase

Google’s Marissa Mayer To Leave Search Team, Take Over Location And Local

If you had to make a list of the most public figures at Google, there’s a good chance that Marissa Mayer would be at the top. Mayer joined Google in 1999 as a very early employee and has been heading its all-important search team for years as Vice President of Search Product and User Experience, where’s she’s played an instrumental role (she also frequently leads Google’s press events). And now, Mayer’s about to take on a new role: Bloomberg is reporting that Mayer is stepping down from her position on the search team to head up Google’s location and local efforts.

This is a big deal, and it hopefully means that there are big changes ahead for these Google products. Google’s location service Latitude is rarely even mentioned in the same conversation as Foursquare, despite the fact that Google is selling Android mobile phones like hotcakes. Likewise, Google’s local results seem to have embraced the company’s spartan aesthetic a bit too much.

According to the Bloomberg report, Mayer will be replaced on the search team by Udi Manber, VP of engineering for Web search. The report also says that Mayer is joining the ranks of Google’s elite operating committee.

Mayer hasn’t wasted any time in prepping for her new role: as you can see, she’s been very active on Foursquare lately.