Category: Tech news

One of the main problems with buying designer clothing off of eBay and other auction sites is that there is really no guarantee that the item you are purchasing is actually what it appears to be. Despite a crackdown by eBay on counterfeit designer goods, the site still has a problem with fakes (though eBay will refund you if an item is fake). YC-backed Lollipuff is an auction site that fully authenticates any designer clothing and accessories it sells.

On Lollipuff, the founders employ a combination of human expert authenticators with a patent-pending process to ensure that the goods on the site are real. For now, Lollipuff focuses on three of the most designer brands on auction sites: Chanel bags, Christian Louboutin shoes, and Herve Leger dresses. When a seller applies to sell on the site, the startup asks for specific photos that will be able to show whether a dress, bag or pair of shoes is a fake. All the items sold are either lightly used or brand new.

Often times, scammers will upload fake pictures to their eBay listings, so that buyers will believe that what they are purchasing is the real deal. But on Lollipuff all pictures have a specialized code number that ensures that seller took the photos themselves. The startup also asks for specific, detailed photos that would not be able to be found on a fake bag.

Lollipuff takes around 7 percent of every transaction. Lollipuff launched in December in beta and with no marketing, is now seeing over $15,000 worth of clothing and accessories sold every month.

The idea for Lollipuff grew out of founder Fei Deyle’s fashion blog where she would write guides about avoiding counterfeit items, and the industry in general. Many consignment stores started coming to her to authenticate resale items, and readers began to ask to purchase and sell the clothes she was blogging about on her site. The idea to provide an authenticated site for designer goods was born.

The market for designer goods amounts to around $50 billion in the U.S. Many brands like Chanel and Christian Louboutin hold their value extremely well, making the resale market also significant. In fact, some designer goods actually appreciate. For example, Chanel bags have historically gained about 20 percent in value annually.

And despite the efforts made by eBay to crack down on counterfeit items being listed, it still does happen. Deyle says she recently saw a fake Chanel bag selling for $2,900, and still had a day left for bidding.

The startup’s other founders include Travis Deyle, who holds a PhD in Robotics from Georgia Tech, and David Mohs, a former software engineer at Google.

Fei says that she and her co-founders will soon expand to verifying and selling other designer goods.

Apple doesn’t need a miracle, but clearly the marketing department thinks the company needs to step things up. To wit: Apple’s latest iPhone web page, which touts “There’s iPhone. And then there’s everything else.” It’s a brassy, ballsy statement worthy of Steve Jobs himself and it seems to show an Apple undaunted yet clearly aware that it can’t just say nothing about the competition.

For most of the past few years, Apple has ignored other manufacturers. Except for the Mac vs. PC ads, there has historically been a sense that Apple is above the fray and is not fighting down. They produce, others imitate.

However, now that Samsung has finally figured out how to build a phone that everyone (who doesn’t have an iPhone) wants, they’re in a slightly more offensive stance. I’ll call it the forward stance – that stance in Karate where you stand sideways, arms up to block, knees bent. It’s not as rigid and obvious as, say, Iron Horse, but it suggests a certain readiness.

Where am I going with this? Well the fact that Apple is ready to fight at all – albeit the the same cold calculation as they usually express in their advertising – is important. It means that people can now point to the Samsung line of mobile devices and say, “Oh, hey, you can multitask on that big phone thing” and that “You can print a book right from your photos and it makes an album from everywhere you are!” It shows that finally, after a decade of fumbling around in the dark, Samsung has finally switched on the light.

I won’t give my opinion on the Galaxy S4 yet – I’m still slightly high from the time they apparently hot boxed Radio City Music Hall – but I will say this: They figured out that people didn’t care about specs. Instead, they care about use cases. For years, Apple talked up the features: The iPhone can make video calls very easily, help you have as much fun as Zooey Deschanel, play Angry Birds and take fun videos. With the Galaxy Note you could be kind of a petulant snot or Mrs. Claus’ sex partner. Apple was aspirational, everyone else was confrontational. Samsung was dysfunctional.

I would argue that the S4 marketing is a step away from that tone (although it’s still pretty rough). The idea, however oddly implemented, is that this is the phone that works and does lots of cool stuff and you can, for one shining moment, use a Samsung product to woo the girl or make your mom happy. That’s important.

Apple’s response is to remind us that nothing Samsung (or anyone else does) is new or particularly noteworthy and that no launch can diminish the laurels iPhone receives on a daily basis. As Mark Gurman notes, Apple’s response page is all about how iPhone was better before Samsung (or anyone else) was even in the game.

Apple wasn’t rocked back by these launches. But Samsung is pulling something off that it has never pulled off before: accessibility. It is a human product, not a product for robots and, barring further missteps, I suspect the S4 will sell very well. Does Apple care? Clearly it does, but it’s been in the game a lot longer and has a lot more to lose. I think the company under Tim Cook still has a lot of tricks left and getting into fighting stance is just the first one.

The tech industry brought a lot of drama this week, so there was lots to dig into in this episode of CrunchWeek, the TechCrunch TV show where a few of us writers give our personal takes on the stories that dominated our headlines for the past seven days.

Watch the video embedded above to hear Leena Rao, Anthony Ha, and I discuss Google’s decision to axe its RSS-powered Reader app (and the tech press’ collective wailing about the decision), the new Samsung Galaxy S4, an apparently fantastic phone with a very awkward launch event, and the surprise Friday announcement that Dropbox has acquired Orchestra, the 13-person startup behind the super popular Mailbox app, for some $100 million.

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

On Friday, Dropbox’s acquisition of Mailbox marked the first time the tech community lit up in amazement and awe of a consumer transaction since Facebook acquired Instagram back in April 2012. The attention is well-deserved. For a variety of reasons beyond the high ticket price of the deal, the acquisition of Mailbox contains many interesting sub-stories that captured the tech community’s interest:

One, Mailbox only raised money once in the summer of 2011. When the funding was announced in November 2011, the company was known as “Orchestra.” At the time, raising $5m pre-product and right off the bat for an A round would seem high, and perhaps the quality of the team afforded the company the chance to raise enough money to have more than one shot on goal, which goes against some conventional wisdom that startups should stay lean and not raise too much dough upfront. I don’t know the specifics, but probably safe to assume their $5m cost them about 20% of their company.

Two, Mailbox was an incredibly well-executed pivot. The Orchestra team calculated that its product wasn’t going to breakout and be a mainstream hit. This is a really hard call to make because its often easy and logical to think in terms of sunk costs. In transforming from one product to an entirely different one, the Orchestra team quickly readjusted and started from scratch to build Mailbox, taking their initial learnings but essentially starting a new company from within their core.

Three, Mailbox was iOS-first. Even though Orchestra worked on iOS and web — and worth noting that Orchestra’s design and cross-platform sync technology was also quite remarkable itself — Mailbox was released on Apple’s platform and ginned up significant buzz to get acquired without expanding to other platforms first. Instagram waited a while before building for Android, which was released a little while before they were acquired and drove a huge increase in their overall install base. While Android is picking up steam (or in some eyes, surpassed iOS), value at the application layer still resides with iOS.

Four, Mailbox added extra buzz to their recent reinvention and re-launch by creating a brilliant marketing hack to get around the ornery distribution hurdles posed by the iOS App Store. Mailbox’s infamous “Reservation System” allowed consumers to download the app from the store but wait in line until their number was called up. This gimmick also became the subject of chatter around many pre-launch mobile startups (see: Tempo) trying to concoct their own special velvet-rope tricks.

Five, Dropbox’s move in this transaction also shines a light on the acquirer’s potential strategy. After raising $250M cash in the fall of 2011 at a very high valuation, Dropbox is on a tricky journey to transform from a commodity service into something more. Skeptics, for instance, wonder if Dropbox can make this turn, as the size of their valuation may have taken some exits off the table. I’d recommend two bloggers here: One, TechCrunch’s Ingrid Lunden penned a smart piece on the direction Dropbox is headed in, and a few months ago, analyzed its earlier purchase of SnapJoy; and two, Spark Capital’s Andrew Parker wrote an insightful post looking back on the history of file systems and where Dropbox could be headed.

Six, while Mailbox received accolades for its user interaction elements of “swiping away” and “snoozing” email, much of the inspiration for those gestures might have been sparked by Clear, the colorful iOS to-do list app. While many may credit Mailbox with inventing these gestures, the phrase “good artists borrow, great artists steal” may be fitting in this case, and the team should get credit for recognizing a great gesture and bringing it to a product category (mobile email) that desperately needed a new client.

And, finally, seven…this all went down so quickly. Just as it seemed Instagram launched, exploded, grew fast, and then sold two days after closing a $50m Series B, the story of Mailbox can be told in months, not years. Orchestra’s founder penned an op-ed in August 2012 analyzing why email is still a problem. In what seemed like a very long Beta test, influential tech users had access to the product and were publicly raving about it, indirectly generating buzz and demand for the app as 2012 ended. It was a great v1 product despite the fact it didn’t allow for search or always have consistent sync or push notifications. In early February 2013, Mailbox launched officially, but consumers had to wait in line, a tactic which became its own story. And, as we all know, on March 15, Mailbox was acquired by Dropbox for what many people believe is quite a healthy sum of cash and stock.

For these seven reasons, this story is captivating. We all may say that the product wasn’t that great, or that startups don’t seem to want to remain independent anymore and go big, or that startups are just meant to be flipped, but what Orchestra and Mailbox accomplished is nothing short of remarkable. Deciding to pivot is a really hard decision. Getting the team to buy into that is really hard. Throwing away all the previous bits of work can be demoralizing. I have seen a small handful startups with real funding and product used by millions try to pivot like this, and each one has failed so far. Actually creating a new brand and product that matters is close to impossible. Devising a product-marketing plan into the launch with a long beta and a reservation system was pure marketing genius. And, while many dreamed of what Mailbox could do for email on different platforms, the team decided to take a generous offer from Dropbox, one that would make all shareholders happy and, considering all the circumstances above, would turn coal into a diamond. That is why the story of Orchestra to Mailbox to Dropbox captures our attention. Building big, durable companies and going public is one pinnacle we see on magazine covers, but for many others, finding that one sweet exit — their own “Inbox Zero” —  is a dream come true.

Photo Credit: Digital Game Museum / Flickr Creative Commons

A couple years ago, I wrote a post called Google, Rome, and Empire. The gist of the article, of which I was very proud at the time, was that Google’s grand plan mirrored the structure of Roman roads in their build-out period, and that Google would unify its dozens of small properties with its five or six big ones by means of a single meta-service.

I envisioned this rich tapestry of services, obscure to monolithic, hooking in through engines and tools to a vastness of data and users, and, at the other end of the telescope, a single point of entry through which one would have instant access to everything from maps to obscure scientific results to the current price of tea. A bit like the real (or rather, idealized) empire, really: An assemblage of hamlets and metropoli, farms and academies, every citizen knowing that their via vicinale led to a via rustica, which led to a via publica, which led to Rome.

This constellation of services, this web of empowerment, resources, and variety. This bright future.

I’m feeling let down.

I’d like to think that I was at least not wrong the whole time. I think my optimism was warranted, just as I think their ambition was real. In a way, that ambition is intact. But it has been perverted. Google was like the Library of Babel: As near as infinite as the Internet age was likely to get. This mind-blowing edifice, bricks of information, mortared together with context, and gilded with accessibility. And they’re building it all so you’ll go to the gift shop.

I suppose I’m criticizing them for deciding to become a business rather than a public service. That was their choice to make, of course, but I think it’s safe to say their choice was a poor one. The Google of the early 2000s, globe-spanning and yet delighting in esoterica, was on its way to becoming a historic framework, Standard Oil crossed with Bell Labs. Not only that, it was crazy, starry-eyed: It was an asylum by and for the lunatics, a padded room big enough to hold the world.

What was it about being the connective tissue of the net that became so distasteful to Google? What was it that made them shutter project after project, things that could have lived out their natural lives for years on minimal resources, supported by a thankful and loving community in happy allegiance to the Google Empire?

Google+ was, as I saw it, a huge misstep, albeit a high-quality one. But other products, other “sunsets” (each less scenic than the last) hinted at a company growing not just sloppy, but callous. More wood behind fewer arrows, when the whole point of Google was that its quiver runneth over. Now, with the senseless shutdown of Reader (I won’t bore you with my own analysis; there’s plenty already (but take this)), I’m faced with how deliberate and tawdry the whole thing has become. God damn it, Google.

It’s not that we can’t move on from Reader — maybe its demise will even help with the rebirth of RSS, or whatever comes next, and make us really look at how ideas move around the Internet. And it’s not that I hate Google+, although I sure as hell don’t have to like it, either.

It’s like seeing your favorite fighter (I was going to say Ali, but Google doesn’t deserve him, even in simile) throw a match for the money. He’s no worse a fighter for it, but could you ever cheer for him again?

How can I be excited for Google Glass now? How can I be pumped for I/O or 3D Google Earth or a partnership with the Library of Congress, or anything they come up with? They’ve poisoned the well in the worst way; they made it clear that Google is worse than mercenary — it’s banal.

I can still be happy for what they’ve given us, and that’s not a little. They led the data-voracious of the world, spurred sluggish markets into action, and truly revolutionized (I don’t use the word lightly) the way we navigate data by changing what we think of as data (namely, everything). I can still follow the good works of the Maps and Books teams with approval or marvel a bit at the technical accomplishment of Glass, or thank them for their advocacy in Washington, though now it is without positive sentiment, like looking at the drawings some other person’s kids did at school.

Google’s greatest legacy may be in the lesson that they have given the next generation of companies and visionaries. Google said “Don’t be Evil,” and they meant it, but they found what others have found: it’s easier said than done, not because of temptation, but because nobody is quite sure what evil is. Luckily, those that are to come may be guided by a simpler principle:

Don’t be Google.

Editor’s note: Nabeel Hyatt is an entrepreneur and Venture Partner at Spark Capital. He writes about startups, growth, product development, and design on his blog. Follow him on Twitter @nabeel.

It’s no coincidence that the last 12 months have seen an explosion in human-computer interfaces (HCI). Google Glass, Oculus Rift, Myo, Leap Motion, and several others are still in stealth mode and are quickly forming the new class of companies aiming to transform our computing environments. And unlike previous generations, this new group is generating the strong public and developer support, in some cases combined with millions in pre-orders, that are necessary to have a chance at breaking through.

We’ve been talking about augmented reality, virtual reality, and wearable computing for quite some time now. When I moved to Boston some 12 years ago, it was largely because of the MIT Media Lab, a hub of innovation that was focused on that crazy mixture of art and technology that they rightly believed would lead to the next stage of computing.

While it was a fruitful era for ideas, and wonderfully geeky photo opportunities, it was a failure for a new generation of global companies. There were advances thanks to eInk, Harmonix, Color Kinetics, Ambient Devices, iRobot, and others, but there have been no truly iconic companies – the Apples and IBMs – that the first generation of computing created. More importantly, our experiences with computers stayed largely the same.

So what has changed that may make things different this time? Two small things, and one big thing.

1. Technology. Core components, from accelerometers to displays, that used to be expensive and custom, are becoming commodities thanks to cell phones. Leap Motion, for example, hugely benefits from the hundreds of millions of cameras embedded in cell phones every year that have drastically reduced their price points.

2. Pitch and design. With any startup, getting people to believe is the hardest thing, and it is doubly hard when you are pitching a new category of experiences. Thanks to many factors, from 3D printing to the video demo culture pioneered by Kickstarter, companies are learning how to make a broad market message of beautiful design and ease of use at their earliest stages.

3. Culture. Sometimes the timing is just right culturally. While much of the technology involved here is difficult, it is not unique to this time and place. I believe the current wave has as much to do with the last generation of gaming consoles and cellphones than about cheaper components or a slick video.

That may sound strange, but I believe it was Nolan Bushnell who said that every great technological advancement starts out seeming like a toy.

The first commercial peripheral to use your body was the Nintendo Power Glove back in 1989. It was a commercial failure, selling 100,000 units, grossing under $100 million, and driving the parent company into bankruptcy. It was geeky fun kids stuff, but the product wasn’t awesome.

Fast forward and the picture of the advances in HCI is much more like this.

Editor’s note: This is the first part of a two-part guest column by Zach Noorani that examines the ways in which equity crowdfunding might impact the startup world and the venture capital industry specifically. Zach is a former VC and current second-year MBA student at MIT Sloan. Follow him on Twitter @znoorani.

It’s fun to ponder the awesome disruptive power that equity crowdfunding might have over the venture capital industry. The very people who spend their days plotting the disruption of any industry touched by technology are themselves displaced by hordes of technology-enabled angel investors. How ironic.

VCs are even playing along. Take FirstMark Capital Managing Director Lawrence Lenihan’s response when asked if crowdfunding platforms threaten his business: “Why should I as a VC not view that my industry is going to be threatened?”

We’ve all heard ad nauseum about the JOBS Act, the proliferation of equity crowdfunding platforms (of which there are now over 200) and how they’re going to turn everyone and his grandmother into a startup investor.  But could this realistically threaten the protected kingdom that is venture capital?

How Do You Threaten Investment Managers Anyway?

Simple, you take away their returns.

At a high level, the scenario for how crowdfunding could do this isn’t as crazy as you’d think. The crowd’s wealth is enormous in relation to the VC industry and has a miniscule allocation to the asset class. Increasing that allocation from miniscule to slightly less miniscule would represent a flood of new capital into the startup ecosystem that would bid up prices, over-capitalize good businesses, and fund more copycat competitors. As a result, everyone’s returns would suffer. [Insert generic comment about how VC returns are already bad enough and how hundreds more funds would face a reckoning if the industry experienced further systemic pressure on returns.]

1. How big is the angel capital market today?

The data is pretty sparse, but the Center for Venture Research (CVR) produces the most descriptive data available; it’s derived from a sampling of angel groups, so it mostly captures accredited angel investment activity in tech-related startups (as opposed to restaurants and such). For 2011, they estimate 320K people invested $23 billion in 66K startups. That implies each angel invested $70K and each startup raised $340K, both of which sound reasonable from an order of magnitude perspective. The handful of other attempts to size the angel market don’t materially contradict the CVR.

Additionally, unaccredited individuals invest as much as another $100 billion or so in “millions” of private companies run by friends and family. I’ll assume 10 percent (wild guess) of which reaches tech startups. Rounding up, that’s a grand total of $35 billion per year.

2. How much is $35 billion a year?

Collectively, U.S. households own $10 trillion in public equities outside of whatever’s in mutual and pension funds. We’ve got another $9 trillion in cash sitting at the bank. In total, we own $65 trillion in assets (net of consumer debt).

Assuming angel investors and friends and family invest ~$35 billion every year, then accounting for the three-and-a-half-year holding period of an angel investment means that approximately $120 billion is currently deployed as angel capital or 20 basis points (bps) of our total wealth. That’s not even considering how much of the $120 billion comes from outside the U.S. 

3. How miniscule of an allocation is 20 bps?

Let’s compare it to the professionals. Despite continually reduced allocations to venture capital, many endowment and pension fund managers still target roughly 20X to 40X more exposure than the average U.S. household (Dartmouth targets 7.5 percent, Washington State is comparable). Obviously the comparison isn’t perfect as more than half of angel capital goes to seed-stage investments compared to only about 5 percent of VCs – not to mention that those VC dollars are professionally managed. But it’s instructive.

From another perspective, just 5 percent of the 6 million U.S. accredited investors* made an angel investment in 2011. (There are 3 million individuals in the US with investable assets greater than $1 million, and roughly 3.5 percent or 4.2 million households make more than $300K in annual income.  Assuming 25 percent (wild guess) of the latter group meet the $1 million hurdle – therefore being double-counted – means there are 6.1 million accredited investors in the U.S.) Assuming the same ratio holds for the $10 billion per year from friends and family, suggests that another 1 million households (out of the 21 million that earn between $100K and $300K) invest $10K a year in startups.

4. What if crowdfunding doubled that allocation to 40 bps (10 percent of U.S. households with six-figure incomes)?

The chart below shows an estimate of venture, angel, and friends + family capital invested in startups over the last decade.

The next chart holds VC investment steady – though many would argue it will shrink in the coming years – and supposes that crowdfunding enables individuals to steadily pour into the market (8 percent growth rate) resulting in a doubling of angel and friends + family capital by 2020. No one, not the retail banks, brokerage houses, or mutual fund investors would even notice that incremental $35 billion was missing.

Two results pop out. First, that’s a huge increase – nearly 60 percent – in the dollars invested in startups.  Second, the blue bar gets pretty tiny in proportion. By 2020, VCs would only be about a quarter of the capital invested in the sector (down from 41 percent in 2011).

Thus far, I have entirely ignored where all that new money might go in terms of stage, sector and quality of company. Just assume that for this much capital to enter the market, most would have to land in what looked like reasonable investments. In other words, the same places VCs invest. Valuations would get bid up, founders would be persuaded to overcapitalize, and derivative competitors would proliferate. All of which would make it harder for investors to make money: Armageddon for hundreds of VC funds.

So Where’s The Panic?

With about 5 percent of people participating currently, let’s call angel investing a hobby for the general population. For it to become substantially more than that – let’s say reach 10 percent as discussed earlier – people not only need to believe they can make an attractive return but also that it’s not that hard or laborious to do. But the truth is, it’s at best completely unknown whether most angel investors have ever made money, and if they did, it certainly wasn’t easy. This is why no venture capitalists are panicking.

The debate over angel investing economics goes around in circles. Conventional wisdom says that angels are the dumb money. More delicately phrased: VCs have “consciously outsourced consumer Internet companies’ bad market risk onto the angels,” says Benchmark Capital co-founder Andy Rachleff and as a result “typical return for angels must be atrocious.” Robert Wiltbank, John Frankel, and David Teten counter that the data demonstrate quite the opposite.

The data in question is from from Robert Wiltbank’s 2007 study:

• 13 percent of the membership in 86 angel groups – 539 angels in all – submitted data on 3,097 investments made between 1990 and 2007.

• 1,137 of the deals had reached exit and only 434 of those had enough information provided to be analyzable.

• The big result: ~0.08 percent of angel investments made from 1990-2007 (assuming 30K/year) generated a 30 percent+ IRR.

Ignoring the huge potential for sample bias and inaccuracy, a generous conclusion would be that somewhere between some and many investors from organized angel groups achieved attractive returns over a period that included the entire Internet bubble and excluded the financial crisis.

That’s great for those 539 investors, but it doesn’t do much to refute the conventional wisdom, particularly for the casual end of the angel market, which crowdfunding would most resemble. In the face of such uncertainty, non-hobby investors will require actual evidence that the early-adopting crowdfunders are making money before reallocating their portfolios in any real way. Shall we adjourn for about five years to let the proof accumulate?

There is, however, one interesting observation from Wiltbank’s study: angel investors spent 20 hours on average conducting due diligence on each investment and 40 hours on investments that had a top quartile exit. That’s in addition to due diligence on investments that they passed on and deal sourcing, which, combined, arguably should comprise most of their time. That doesn’t sound easy at all.

Check back next week for Part II where I explain why, despite everything I just told you, it would be premature to count out the crowd just yet.

[Image: spirit of america / Shutterstock.com]

Editor’s note: David Selinger is CEO and Co-Founder of RichRelevance. He previously co-founded Redfin and led the research and development arm of Amazon.com’s Data Mining and Personalization team. Follow him on Twitter @daveselinger.

The passing of Jody Sherman stirred something deep within my soul. Jody was a friend, but not a close friend. Definitely not close enough to explain the degree to which I felt saddened. I still do not know Jody’s situation sufficiently to draw any conclusions or even analogies, but I have spent the past weeks reflecting on my own dark nights as a startup founder, and want to issue a call to arms to the entire startup community to recognize this challenge, its pervasiveness, and the opportunity it presents before us.

Because this is such a sensitive topic, I want to be very clear: while the events surrounding Jody’s passing are the real and sincere inception of this personal reflection, that is the entirety of the connection. I do not wish to speculate or in any way further examine the reasons for Jody’s decision out of respect for him and his family.

The life of a startup CEO can be lonely. People may know and acknowledge this, but we haven’t taken much time to understand its underpinnings (and thereby its mitigating factors) or its implications. I’ve spent the last month or so searching for the root cause of the torment of my own experience, and after days of rambling thought have arrived at the conclusion: fear.

My fear has two forms: fear of failing (in the future) and fear of discovering (or worse! being discovered) I have already failed, by choosing a path with a dead end; I simply haven’t found out yet.

All of the people with whom I interact daily have a direct dependency relationship on me. And behind this “Masters of the Universe” smile, my bold stride, and my unwavering voice is a little soul that is afraid: “What if I can’t do all of this?”

My co-workers/employees need me: They need to believe in where we’re going and that I am the leader who sees the future in a way that can bring them there. My customers need me: They need to know that our product and services work as promised (they do!) and that I will do everything humanly possible to deliver not only the technology but the business results they desire. My investors need me: They need to have confidence that their investment will have a return. My family needs me: They need to know that our future is financially secure and that I can put food on the table.

Sometimes I’m afraid that I may not be the superhuman who can do all of these things for all these people all the time. In the moments alone in a dark hotel room, in the middle of a four-city week, sometimes I’m not only afraid of the answer, sometimes I’m afraid even to ask. What would these people think if they knew that sometimes I have doubts?

My gut tells me it’s not only me. I see the CEO who’s been to 10 other events with me, she always says “Great” when you ask her “How’s biz?”—right up until the moment the TC article announces she’s shut her doors, or laid off half her staff. Or I see the CEO who’s smiling, signing autographs for his amazing new book, but breaking down in tears one-on-one after everyone’s left, because he just fired his co-founder and best friend of 15 years.

I’ve experienced it deeply myself. In 2010, we grew headcount too far ahead of our revenue, and we had to lay off some of our staff. I was ashamed. But above all, I was afraid that I would lose the confidence of my team, my investors, my family, my co-founders. I didn’t sleep for the 45 days leading up to the lay-off.

“How’s biz?”

“Great.”

Of course, we survived, became stronger, and we even grew (we tripled our 2010 revenue in 2012); but my soul is scarred to this day with the fear of that, the worst day of my career.

With the hope it might help some other folks, I’d like to share some of what I’ve learned:

1. Transparency rules. Both in phases of growth and constriction, if you’ve built the right team, the right values in your firm, transparency cures many things. I learned this the hard way as I reflected after our layoff in 2010: I had regressed and become protective to a degree that didn’t reflect my fundamental belief in transparency. By contrast, one of my personal heroes, Glenn Kelman from Redfin, tackled a similar situation head on.
2. Build trust. Stephen Covey, in his book, The Speed of Trust, agrees. Deeply trustful relationships are unique and powerful. They are bi-directional and take time to build. Greylock has a CEO group that meets every month or so, and it took almost a year before we felt sufficiently comfortable to sincerely open up to one another. Now it’s a group of entrepreneurs I’ve come to respect immensely, and I always look forward to our time together. We share our ups and our downs, and we can grow from one another’s mistakes and challenges. While we jokingly call it the “CEO support group,” the personal support is undoubtedly one of its key values.
3. Ask for help. I find that I respect others who admit their needs/gaps and ask for help. Why shouldn’t I apply the same lesson to myself? We build teams of people that are better, faster, and smarter than ourselves. We carefully choose our investors to add value to the equation. Building on that premise, I push myself to ask for advice when I am facing a new or challenging situation. I benefit from the experience of others, build trust, and hopefully make better decisions.
4. Spouses/partners are allies. My wife has become one of the greatest allies of RichRelevance. She may not understand the intricacies of our entire business, but building an open dialog about sensitive or overwhelming situations can help me offload some pent-up stress, and simultaneously involves her in my life. A spouse or partner who feels involved can be helpful in many ways—from a deeper understanding of some small familial sacrifices to a shared sense of “building something together.”
5. Friends are friends. A long time ago, I was given the advice that when you work with friends, the friendship must disappear behind the professional relationship. With all due respect, I consider that rubbish. Professional relationships must be managed with the rigor that comes with the territory, true, but that doesn’t mean you can’t maintain and even grow the personal relationship simultaneously—in fact, to do otherwise would be the most isolating of all: a zero-sum tradeoff between friends and co-workers. I have actually even fired friends, and yet maintained very close relationships with them through the experience—where the professional relationship ends with a hug. My two co-founders have been two of my best friends since I was before I was three years old. And they’re the two best business partners I could ask for. Many of our other co-workers I’ve known for 10+ years; and we are able to build off of the strength of our personal relationship while not allowing it to interfere with our professional relationship—or create distraction among other co-workers. Manage them thoughtfully, but don’t ignore the power of friendships.

Together these principles have helped me bring my life a sense of balance. From time to time, I may still feel the pangs of isolation from my job, but the perspective that a founder/CEO role should be fundamentally isolating must become a thing of the past. It is a stigma that has taken too much from our community already.

I hope that by sharing a bit of my experience I can advance our all-too-critical dialog to create a healthier model of the startup CEO/founder.

Editor’s note: Ross Rubin is principal analyst at Reticle Research and blogs at Techspressive. Each column will look at crowdfunded products that have either met or missed their funding goals. Follow him on Twitter @rossrubin.

Back in January, Backed or Whacked looked at three crowdfunding projects that were aimed at getting novel takes on bicycles off the ground, or at least on the ground. But not every crowdfunded bicycle project involves reinventing the wheels. In fact, bike accessories have been such a popular target for crowdfunding efforts that they’re fertile ground for a two-part look, this first one of which covers smaller clip-on and snap-on accessories. Feel free to ascribe them symbolically to each wheel as you see fit.

Backed: Orp Smart Horn. Thankfully not a bike horn controlled by your smartphone, the smart horn, or “smorn” as no one will call it, is the brainchild of Tory Orzeck, or “Torzeck” as he likely doesn’t like to be called. While the portmanteau may sound whimsical, the smart horn addresses a serious issue. Bicycle riders are relatively invisible and inaudible at night, particularly when riding to the right of a vehicle looking to make a right turn at an intersection. Thus, the Orp, which wraps around a bike’s handlebar, combines a bright LED headlight with a piercing 96 dB horn that Orzeck claims is similar to a Vespa’s horn in practice. A softer 76 dB mode is also available, so you don’t need to scare the pedal pushers off pedestrians who meander into the bike lane.

Over 1,500 backers supported Orp, with the most pledging in the $45 and $55 tiers to put a lot more cannon in their Cannondale. The smart horn is due to ship in September. Especially till then, let’s be careful out there.

Whacked: Bag Buddy. New York industrial designer Nicholas Fjellberg Swerdlowe spends a lot of time with his bicycle, heaving it up and down stairs and taking it to the grocery store. There, he invariably picks up too many ecologically indifferent plastic shopping bags to carry home on his two-wheeled steed. His entrepreneurial epiphany to deal with the baggage in his life was the Bag Buddy — a small hard piece of rubber flanked with two hooks designed to carry food and whatnot back home. Fully loaded Bag Buddies look practical if a bit silly. Swerdlowe articulates three main Buddy benefits mostly related to the placement of the bags — safety, maneuverability and decreased risk of wheel pinches. Unfortunately, less than $4,000 of the requested $20,000 for this “necessary accessory” was collected and so for now the Bag Buddy has been bagged, buddy.

Whacked: Pub Pedals. Like the equally alliterative Bag Buddy, Pub Pedals are simple appendages that cover part of the bike to increase its usefulness. In this case, the slip-on pedals are intended to slide securely on to a certain brand of pedals called Eggbeaters, which are designed for mountain biking but are challenging to ride on with ordinary footwear. Pub Pedals, however, make them more suitable for transport to the pub or presumably even destinations where one might not become inebriated.

In its Indiegogo campaign, Pub Pedals collected just over 8,000 of 20,000 Canadian dollars requested. However, this “whacked” campaign has a happy ending. Taking advantage of the site’s Flexible Funding option and about $10,000 in offline contributions and preorders, designer Jeff Thom was able to get close enough to push ahead and Pub Pedals are now available for preorder for that person in your life looking for a way to beat the Eggbeater for less-demanding terrain.

Everywhere you went around Austin this past week, there were people queuing up for things, Grumpy Cat, the GroupMe Grill, the Twitter party, Salt Lick BBQ.

One startup fête was so packed even a founder couldn’t get in immediately. “If only all these people were daily active users,” one person at the same party quipped, on the app’s lack of popularity relative to the line outside.

“The most valuable part of a trade show is seeing where the lines are,” Bing Gordon told me at KPCB’s private SXSW lunch event, which didn’t have a line on purpose. Like a Petri dish of demand, the conference was a good, if flawed, gauge of which brands could generate “buzz.” Hence every marketer and their mother flew to Texas to hawk their wares, with Oreos and Cap’n Crunch joining Uber and TaskRabbit in a four-day-long exercise to acquire unique users.

The equivalent of startup steroids, hype isn’t necessarily a bad thing. As a new startup you’re judged by where you are today — nowhere. When you’ve got nothing, hype, manufactured by blog posts and marketing gimmicks among other efforts, is a tried-and-true way to raise venture capital and capture the imagination of early adopters. Not that many early-stage startups can tell a VC “Look at what we did”; but quite a few can say “Look what we’re going to do.”

The gulf between that promise and the satisfaction of that promise is driven by hype, and it creates a situation in which a company’s or person’s brand is further along in the market than their product is. Hype = potential.

This works for all new entrants to a space — hype for a VC means access to better deals. See A16Z, which, at four years in, is already considered a top-tier VC despite not having a decades-long roster of returns (they do have a slick domain name, though). The trick is building a brand where people want to work with you; there’s a reason a PR person has become the best accessory for many venture folks.

While hype’s network effect can help you acquire customers, if you court it you’re taking a bigger risk — you have to eventually fulfill expectations. When you go creating hype, the clock starts ticking. The pressure is on to satisfy the gap between what your brand promises and your actual product/value add. Don’t let your hype write a check that your product can’t cash, because the pressure can cause your company to lose focus.

The road to the Deadpool is filled with startups whose products never lived up to the noise they made, most recently Formspring. The overhyped Color, which sold to Apple for low-digit millions, was compared to Google by Sequoia, which led its $41 million dollar funding round. But let’s not pick on whipping-boy Color; Foursquare, Zaarly, Highlight, Path and countless others, all for one reason or another, made a big headline splash and, for one reason or another, failed to live up to initial expectations and had to recalibrate along the way.

“Being overhyped means you have the wrong product at the right time,” investor David Tisch noted. “The brand and PR got too far ahead of the product, or they built the wrong product, or a bad product, or didn’t execute well.”

Perhaps the idea that hype can harm you if you don’t manage expectations is the strategy behind Snapchat’s shunning of the media spotlight. It had no presence at SXSW despite being the social app of the moment (or at least one of them). The management team even ditched the Crunchies, where it won “Fastest Rising Startup.” The founders are as surreptitious as their products.

Snapchat shows us that whether intentional or not, avoidance can at times be part of the hype strategy. And that hype is a necessary, but not sufficient, condition of success: Success will lead to hype — blog coverage, awards, etc., but hype won’t necessarily lead to success.

Pinterest, a startup that eschewed the tech media early on, is even further proof of this. At a $2.5 billion valuation, the company has convinced investors that it will eventually have a commerce ability and will eventually bring in meaningful revenue. Pinterest’s hype is writing a big check. But many believe that its product will make good on its vow, and that is where the magic happens.

As Foursquare struggles to live up to its hype, Mailbox, an app that has over half a million people still lined up just for the privilege of using it, cashed in on what was perhaps the most lucrative product relaunch in tech news history — getting Dropbox to place a nine-figure bet on the hope that the app will one day be able to expertly handle email attachments. It doesn’t at the moment.

One could argue, as Gartner does, that the tech industry on a macro level is an example of hype, promising that emerging technologies will actually create the future world we want to live in.

We’ll see.

Editor’s note: Bill Ready is CEO of Braintree, an online and mobile payment provider to many of the top apps in the App Store, including Uber, Airbnb, Angry Birds, OpenTable, Fab and HotelTonight. Follow him on Twitter @williamready.

When asked about a Facebook app for iPad in November 2010, Mark Zuckerberg brushed off the question with a quip. “iPad’s not mobile. Next question…. It’s not mobile, it’s a computer, it’s a different thing.” Since then, Facebook has evolved its view of mobile, having dealt with the struggles of its user base moving to mobile before they had an answer to mobile monetization. However, the debate over whether tablets are mobile devices has continued.

The introduction of the Samsung Galaxy S4 may finally put an end to the debate. The Galaxy S has been one of the best-selling smartphone models ever and the next incarnation will have a 5-inch display – just under the size of the Samsung Note II. Now, the next best-selling phone on the market may, in fact, be a tablet that people are carrying around in their (oversized) pockets.

The similar user experience on smartphones and tablets has led to the convergence of the two devices. Smart phones are getting bigger (iPhone 5 increased from a 3.5-inch to a 4-inch screen) and tablets are getting smaller (iPad mini – now the best-selling iPad model – reduced the size of the iPad screen by nearly two inches). Perhaps the best exemplification of this phenomenon is the Samsung Galaxy Note II, which sports a 5.5-inch display and has been dubbed a “phablet” because it can be used as both a tablet and a phone.

Those that would argue that tablets are just a new form of PC point to data that tablet usage is rapidly cannibalizing PC usage. Tablets now account for a third of the overall PC market, and consumers who own tablets find they are using their PCs less. It is also the case that 90 percent of consumers use their tablets at home, instead of a PC. However, it is also the case that tablets are clearly being used as portable devices, with 40 percent of consumers using them outside the home.

In addition to being commonly used outside the home, the user experience on a tablet is fundamentally different than on a laptop or PC and is much more akin to a smartphone than a PC. For example, GPS and native applications allow for context-driven experiences across the web on both smartphones and tablets. Touchscreen displays and the absence of a physical keyboard require a style of interaction on both that is largely driven by context-aware experiences (i.e. applications that know about you or what you want so that you don’t have to enter lots of information for the application to work).

The implications of this are profound. Mobile devices are becoming the primary computing devices now that they pack the power to perform many of the things that people previously did on their PCs. Nowhere is this more evident than in e-commerce where mobile devices now account for more than 30 percent of all e-commerce shopping sessions. That percentage is more than doubling year over year, meaning that by the 2013 holiday shopping season, mobile devices will likely account for more than half of all e-commerce shopping. It is also the case that consumers aren’t buying mobile devices with the primary purpose of making phone calls anymore. In fact, phone calls are only the fifth most popular feature on smartphones – behind browsing the web, using social media, playing music, and playing games.

This radical shift in consumer behavior has created huge opportunities for those who have embraced it and massive threats for those who have failed to. Uber and HotelTonight are great examples of wholly new commerce experiences that are only possible because of mobile devices. At the same time, traditional e-commerce providers are seeing their conversion rates drop by 75 percent or more on mobile sessions if they have not properly optimized for mobile with context-driven experiences, such as one-touch checkout. Brick-and-mortar retail locations now deal with the showrooming phenomenon where more than 40 percent of consumers will use their mobile devices to price check items and perhaps complete orders online while in the store.

If the Samsung Galaxy S4 is as successful as its predecessor and manages to create the perfect combination of phone and tablet, the shift in consumer behavior toward mobile devices as the primary computing devices will certainly accelerate. Along with that will be a meaningful acceleration in the opportunities and threats that are posed by consumers shifting to mobile.

What do you do when you have a health question? You likely either search Google or WebMD, try to call your doctor, or set up an appointment. For most people, the latter two options would be preferable, because, after all, you’re more likely to trust a human being than Dr. Robot or some crowdsourced health resource.

Of course, visits to the doctor’s office will cost ya. Oh, will they cost you — both your patience and your wallet. In 2010, Wellsphere’s Ron Gutman founded HealthTap to leverage the scalable distribution afforded by the web to connect you with real, live human doctors in realtime — for free.

When I first heard the idea, I pictured a dark call center filled with ill-kept quacks giving questionable medical advice to the ailing masses. But HealthTap has been on a mission to buck the WebMD trend for health databases and become the web’s go-to repository for health info that’s actually reliable.

Not only that, but HealthTap’s real success has been its “Quora for doctors” — the Q&A portion of the platform that allows anyone and everyone to ask a health question and have one of the 35,000 licensed, U.S. physicians in its network (which also includes 128 specialties in all 50 states) respond to their question. The difference with Quora, Gutman tells us, is that all of HealthTap users’ questions get answered within 24 hours. Quora is a terrific resource, but anyone familiar with the platform knows it can be hopeless in this regard.

Thanks to its Q&A network, which provides patients with near-same-day answers to their health questions, the Eric Schmidt-backed startup has been growing fast. However, HealthTap has yet to give much of a peek behind the curtain, but today we’ve managed to convince Ron to share a little more about the startup’s growing traction.

The founder tells us that people are now asking doctors more than 10 million questions on HealthTap every month and that the site is serving more than 7.5 million unique visitors each month, with its mobile apps having been downloaded by more than 2 million. But what’s really encouraging for HealthTap is that doctors are excited about it and spending time interacting with the platform. “They actually want to take the time to answer people’s questions,” Gutman says. Which, admittedly, was not what he expected — at least to this degree.

As of now, doctors are spending an average of over one hour per session (61.2 minutes to be precise) each time they log in. They’re not only answering questions, but engaging in peer reviews of other doctors’ answers, building transparent referral networks and voting on one another’s expertise. (HealthTap is far from being the first to go after these concepts, by the way, as Doximity, QuantiaMD and many others will attest.)

Cumulatively, HealthTap has served more than 581 million answers to users seeking health advice from their mobile devices and browsers. But, what really makes a difference is that over the past five months, 2,963 people have sent HealthTap thank-you notes saying that these doctor answers had saved their lives. Whether you buy into HealthTap’s concept or not, if someone were to ask you why healthtech is important, this is it.

But, for HealthTap, though it may sound like vapid cheerleading, it’s hard not to admit that this growth is impressive having launched its beta less than two years ago and its mobile health platform eight months ago. The platform has added more context around its Q&A platform, creating an interactive “Health Journey” so that all topics on the platform are now connected through a network of semantic relationships, doctors and interactive images, along with creating a repository of wellness topics and doctor-created tips.

As Obamacare incentivizes more people to go to the doctor’s offices, those aforementioned lines are only going to get longer and doctors are going to be inundated by more people than they can handle. “The more we can create mechanisms that help make doctors more efficient and reduce wait times while saving people money? “That’s a win,” Gutman says.

HealthTap has to date raised $13.9 million from investors including Esther Dyson, Mark Leslie, Aaron Patzer, Mohr Davidow Ventures and Mayfield fund. What’s more, based on this growth, we’ve also been hearing that HealthTap is in the process of raising a substantial Series B. So stay tuned.

Find HealthTap at home here.

After much fanfare the Pebble smartwatch made the leap from fanciful concept to full-fledged product earlier this year, but now that units have started to ship and people have started to wear them, what’s Pebble’s next step?

Why, enticing developers, of course. Pebble founder Eric Migicovsky noted in a backer update video released earlier this morning that an early version of the smartwatch’s watchface SDK would be made available to would-be Pebble developers during the second week of April.

And when I say “early version,” I mean early version. At this stage it’s being looked at as more a proof-of-concept release than anything else, and Migicovsky points out that there’s a “99% chance” that the team will revamp some of the underlying APIs involved. What’s more, anyone expecting the ability to use the SDK preview to tap into the Pebble’s sensors and radios (like the accelerometer for tracking movement) will come away disappointed — the release is geared strictly toward new watchfaces, though Migicovsky says that games are also fair game as they rely mostly on button inputs.

The early SDK has been in testing with “hacker” backers — a group of about 100 people who pledged $235 or more for the privilege of early tinkering rights — for the past few months, and some of the apps they’ve created will be released alongside the SDK. The most notable new app? A low-res (and therefore faithful) reproduction of Snake that hearkens back to Nokia’s feature phone glory days.

Granted, new watchfaces may not seem like the most crucial addition even to Pebble buffs, but the impending release marks a pretty dramatic shift in scope for the Pebble team. What once started as a company whose daily operations were completely dictated by the need to manufacture and ship over $10 million worth of gadgets is now a company gearing up to focus on the next stage of the Pebble’s life cycle: building up the app ecosystem so the value of owning a Pebble extends beyond the wow factor of wearing a tiny e-paper display on your wrist. Migicovsky concedes that Pebble hasn’t “done the best job so far of communicating with developers,” but the team looks very willing to change that — hopefully a full-blown version of the SDK shows up sooner rather than later.

Update 34 – Pebble Watchface SDK in April from Pebble Technology on Vimeo.

The Gillmor Gang — Robert Scoble, Dan Farber, Keith Teare, Kevin Marks, and Steve Gillmor — enjoys a week of actual tech news for the first time in quite a while. Samsung’s latest big screen phone comes with a suite of Android add-ons, some of which tickle @scobleizer’s shiny bone while making it clear his rationale for switching to Android has more to do with pocketing his Google Glass base station.

@dbfarber rejects the notion Google will take over our eyeballs with Glass; everybody will have a say in this wearable moment. @kevinmarks sees Google moving toward unification of web and Android in Andy Rubin’s resignation, and @kteare sticks with me on Apple’s Strategy of Doing Nothing strategy. That bulge in my pocket remains iOS, or are you just glad to see me.

@stevegillmor, @scobleizer, @dbfarber, @kteare, @kevinmarks

Produced and directed by Tina Chase Gillmor @tinagillmor

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