Category: Tech news

Some of the best conversations I have about the tech space are with investors — along with being rich and generally smart, they seem to have the best predictive insights into the industry. At a time when the Chinese seem to be making very real attacks to our cyber infrastructure, when legislation could make or break the evolution of the television industry, and when Google Glass stands to store more lifestyle data than any other computer in existence, I thought it only fitting to bring on a DC-based investor, John Backus, to chat out the latest news.

John Backus is a managing partner at New Atlantic Ventures, and before that, he overlapped at Bain Capital with none other than one Mitt Romney. But John has had his eye on the needle of the tech industry for decades, and offered some interesting opinions of what we can expect to see in 2013 and beyond.

According to Backus, “the most interesting thing in 2012 was the perceived shift from consumer tech to enterprise tech,” but that most of that comes down to the fact that “people care more about profits.”

As far as consumer-facing technology is concerned, Google Glass seems to be of some interest to Backus (along with the entirety of the tech industry). Backus believes that the most valuable asset of Google Glass, and other wearable computing devices, is the amount of data these products can collect. “When you think about that much data, we are going to have to start thinking differently about the way we use this much data, and how we parse through it for the stuff that matters.”

Backus also sees great potential with Google Glass in the education sector. “The courses and the professors at a particular school are much less relevant,” he said. “It’s all about the community.”

The education system, particularly in DC, is changing rapidly from the traditional model to online education products, and Google Glass should help facilitate that.

But setting aside the future for a moment, Backus and I took the opportunity to chat out a shift that’s happening at this very moment. That shift centers around the TV — what is a TV? Will any content provider have all my favorite content on one platform? Who will come out victorious?

“Technology can do much more than the legal framework can do,” said Backus. “The legal framework is outdated and needs to be changed.” Backus and I, however, seem to differ when it comes to the most important shifts of the TV space. While Backus feels that access to the channel (such as ESPN on your iPad) takes precedence over a single content provider nailing down content deals to have everything and eventually “getting it right.”

Yet, when measured against the current cyberwar seemingly being fought between China and America, matters of the livingroom seem much less pressing. “The relationship between China and the U.S. as it relates to cybercrime will not be resolved this year,” said Backus. “It will take many years.”

“All of our data belongs to corporations,” Backus reminds us. His solution is to build “much bigger fences,” but he seems optimistic about the fact that many of the most devastating attacks are cases of spear phishing, meaning it comes down to human error and weakness.

He is much more fascinated with how the U.S. will respond, as the U.S. clearly has the ability to launch its own cyber attack. With China being our biggest trade partner, however, launching a cyberattack on the cell in China responsible for these attacks would be considered a declaration of war.

Editor’s note: Mike Ghaffary is the vice president of business development at Yelp. He also co-founded Stitcher and BarMax, the $1,000 iPhone app, and is a former VC. Follow him on Twitter at @newmike.

Marc Andreessen and Reid Hoffman recently debated whether software would eat traditional retail, leaving no brick-and-mortar presence behind. Both articles noted that e-commerce is currently only 5 percent of retail in the U.S., while the other 95 percent is brick and mortar.

While Andreessen holds firm that e-commerce will completely overshadow physical retail, the debate missed why some industries will never go completely online.

Some industries will have a hard time competing as more consumers embrace online shopping, but some industries will do just fine. I have constructed a simple formula that can show that the magnitude of offline local commerce is likely to be larger than e-commerce for a long time. These calculations could have predicted that Amazon was going to do very well in categories like books and iTunes in music, but the $300 billion clothing industry is going to stay mostly brick and mortar for the foreseeable future, as are many service-driven local businesses.

One quantitative way to gain an understanding of which local businesses will be eaten by software and which will live on is to understand the local coefficient. The local coefficient (L) attempts to define how “local” each category of product or service must be, normalized on a scale of 0 to 1. You could even pick a number from 0 to 1 for each category (e.g. 0.2 for books, 0.9 for restaurants, 0.6 for clothing, etc.) based on your own intuition of how “local” it must be, but I tried to make the assessment more granular by breaking it down into three parts.

Here is the equation I use to calculate the local coefficient:

L = (e + t – s + 5) / 15, with each of the following input variables ranging from 1 to 5:

• e = experiencing the service or product in person after buying it is important
• t = trying, touching, or seeing the product or service immediately before buying it is important
• s = substitutes are available online from a reliable source

Table 1 below shows my assessment of the local coefficient for a variety of industries. There is certainly a fair amount of subjectivity in choosing the variables e, t and s. For example, I assumed that for books, the desirability of experiencing them physically (e) is only a 2 out of 5. While some people say they still prefer the touch of paper as they flip through their favorite novels, the trend seems to indicate that the convenience of having an entire digital library of millions of pages at your fingertips in a device as light as an iPad mini or a Kindle is more appealing.

In addition, the need to try out books in person (t) is low at a 2 out of 5, as evidenced by the number of large bookstores shutting down. Finally, Amazon/Kindle and other sources provide an excellent online substitute (an s of 5); contrast this with doctors, for example, where WebMD provides an online substitute that is only a 2 out of 5.

The book industry, then, has a local coefficient of 0.27 — a pretty low value on a scale of 0 to 1. Thus, you would expect the book industry to move online more quickly than other industries, and it is no wonder that Amazon chose books as its primary market to launch with in 1995. It is also natural that music followed, given that music also has a low local coefficient.

Table 1 – Local Coefficient By Industry

Category	e	t	s	L	Largest Online Substitute	Largest Site to Find this Type of Local Business
Restaurants	5	3	0	0.87	–	Yelp
Apartments	5	2	2	0.67	–	Craigslist
Books	2	2	5	0.27	Amazon	Yelp
Cars	2	4	2	0.60	eBay Cars	Edmunds.com
Groceries	3	3	2	0.60	Safeway.com	Yelp
Clothing	2	5	2	0.67	No clear leader	Yelp
Shoes	1	5	3	0.53	Zappos	Yelp
Hotel	5	3	0	0.87	Priceline, Expedia	TripAdvisor
Spa	5	3	0	0.87	–	Yelp
Fitness/gym	5	4	0	0.93	–	Yelp
Plumber	5	3	0	0.87	–	Yelp
Music	2	2	5	0.27	iTunes	–
Doctor	5	3	2	0.73	WebMD	Yelp
Dentist	5	3	0	0.87	–	Yelp
Legal	2	4	2	0.60	LegalZoom	Yelp

While the assumptions on e, t and s in Table 1 are debatable, the implication in Table 2 is pretty clear that the local market is going to stay larger than the e-commerce and online-only market for some time to come, even if the local market continues to become heavily online-influenced. Table 2 shows local being 3x larger, in fact.

Categories of products or services with a high local coefficient are going to remain as desirable in-person local experiences. We can confirm the results in the table above with intuition. Obviously, you can’t eat food over the Internet, so restaurants will always have a high local coefficient. Dentists, spas, and plumbers are all similarly high, with local coefficients of 0.87; you really need that in-person visit, and you probably want to meet the service provider before you buy. In addition, there really isn’t an e-commerce substitute for any of those categories (although if it could somehow be done, there would certainly be demand for an online dental cleaning, or better yet, an online massage).

Legal services is an example of a category that is somewhere in the middle: Talking to your attorney in person is very desirable for many potential customers, but ultimately the final work product often doesn’t require you to be there in person (unless the attorney does a bad job and you wind up in court!), and there is a decent online service substitute with LegalZoom and related services.

With clothing, there is at least a medium desire to try clothes on in a store, as fit is an important part of the selection process for many shoppers. In addition, there is not a clear online substitute to trying on clothes other than buying them and shipping them back and forth (e.g. Bonobos, Warby Parker and Zappos). Startups like Clothes Horse, Fit Valet, Metail, and Fits.me are all trying to create virtual clothing fitting rooms, but there is still work to be done.

Now we can construct an updated table with market sizes (M) for each category (click links for sources) and estimate the size of the steady-state, local brick-and-mortar industry (L * M) compared with how much will go online (O * M):

Table 2 – Market Sizes

Category	e	t	s	L	O	Market in US (M)	O * M	L * M
Restaurants	5	3	0	0.87	0.13	$660 B	$86 B	$574 B
Apartments	5	2	2	0.67	0.33	$127 B	$42 B	$85 B
Books	2	2	5	0.27	0.73	$33 B	$24 B	$9 B
Cars	2	4	2	0.60	0.40	$168 B	$67 B	$101 B
Groceries	3	3	2	0.60	0.40	$491 B	$196 B	$295 B
Clothing	2	5	2	0.67	0.33	$305 B	$102 B	$203 B
Shoes	1	5	3	0.53	0.47	$48 B	$22 B	$26 B
Hotel	5	3	0	0.87	0.13	$137 B	$18 B	$119 B
Spa	5	3	0	0.87	0.13	$13 B	$2 B	$11 B
Fitness/gym	5	4	0	0.93	0.07	$21 B	$1 B	$20 B
Plumber	5	3	0	0.87	0.13	$88 B	$12 B	$76 B
Music	2	2	5	0.27	0.73	$7 B	$5 B	$2 B
Doctor	5	3	2	0.73	0.27	$800 B	$213 B	$587 B
Dentist	5	3	0	0.87	0.13	$94 B	$13 B	$81 B
Legal	2	4	2	0.60	0.40	$245 B	$98 B	$147 B
Total						$3237 B	$816 B	$2421 B

The results in the table should be surprising for anyone who believes brick and mortar is dying: Even after we all become compulsive smartphone users who buy anything online whenever possible, the theoretical equilibrium of local commerce versus online commerce will be 3 to 1.

The opportunity for mobile and web companies now is in online-influenced commerce for these high-local-coefficient categories. Online-influenced commerce means that consumers want a mobile or web experience before, during and after going to a local business. Forrester Research sized online-influenced commerce as already over $1 trillion back in 2010.

Let’s take restaurants for example. For many of us, the ideal experience before going to a restaurant is going online to find somewhere great to eat and explore ratings, reviews and menus. Then at the restaurant, we want to look at review highlights to see what to order, as well as photos of dishes. After we leave, we might write a review and rate the business. This kind of online-augmented local experience is becoming so ingrained in our normal behavior that The Onion finds humor in suggesting someone might actually go to a restaurant without reading online reviews first.

You can also see that the categories with the highest local coefficients map nicely to the most popular reviewed categories on Yelp. This is no coincidence and is part of the same trend:

Reviewed Businesses by Category:

• Shopping & Retail – 23%
• Restaurants – 21%
• Home & Local Services – 11%
• Beauty & Fitness – 9%
• Arts, Entertainment & Events – 7%
• Health – 6%
• Nightlife – 4%
• Travel & Hotel – 4%
• Other – 11%

The next wave of innovation will be less about how to deliver an experience online, and more about how to enhance it. While the assumptions behind the local coefficient are subjective and can be debated, even if you make very aggressive assumptions, it is hard to make the calculations show that e-commerce will become larger than local brick and mortar in the foreseeable future.

My analysis resulted in brick and mortar being 3x the size of e-commerce, but you can probably find a way to get it to 2x or even 1.5x. But getting to 0.5x would probably stretch beyond the set of assumptions that a reasonable person would agree with.

Changes in society will occur in the coming decades that could make all the input variables shift, but it is hard to build a mathematical case that e-commerce will surpass local by the end of this decade. Entrepreneurs would be wise to focus on online-influenced commerce and how to create great experiences in that area.

What if your browser could know when you are getting a call on your mobile phone? Earlier this month, Google and Mozilla demonstrated how their browsers’ WebRTC implementations could interoperate. Today, at the Mobile World Congress in Barcelona, Mozilla is going a step further. The organization has teamed up with AT&T and Ericsson to show a proof-of-concept called WebPhone, which demonstrates how its Firefox browser can use Mozilla’s Social API, AT&T’s API Platform and Ericsson’s Web Communication Gateway to let Firefox users sync with a user’s existing phone number and provide calling services without the need to install any plugins or special apps.

WebPhone, which isn’t currently available to the public, demonstrates how users can receive calls and texts on their desktops. The system was built on top of WebRTC, the developing standard that allows for in-browser file transfers and real-time video, audio and text chats without plugins. According to Mozilla, this demo shows “how consumers can easily take and receive video calls from their mobile phones or desktop browser using WebRTC or share their web experiences with friends or family who might be on a desktop PC or mobile phone across the other side of the world.”

The demo shows how users can start a call from their Firefox browser. Using the operators’ APIs, the web application in the browser gets access to the user’s contacts on the phone and could eventually allow them to, for example, start calls on their mobile device and then transfer them to their desktop once they get home and receive calls right through their browser.

“We believe there is value for operators bundling mobile and fixed broadband offerings with browsers, and Firefox will be the first browser to give them this opportunity,” Magnus Furustam, Vice President Product Area Core and IMS, Business Unit Networks at Ericsson said in a statement today. “The open source project with Mozilla means operators can contribute resources to the project and in a new way, jointly collaborating with other innovators to shape the future of web communications.”

We will likely hear quite a bit more about WebRTC as this year’s Mobile World Congress gets underway. The standard is now stable enough that developers can feel relatively confident that most browser vendors will support it in their stable release versions relatively soon (with the exception of Microsoft, which is backing a different version of the standard). Browser developers are obviously implementing the standard in different ways, but now that there is some degree of interoperability between the different vendors (and third-party solutions like TokBox that ensure this actually works), we will probably see quite a few more developers jump on this bandwagon and launch WebRTC-based applications.

Image credit: Tsahi Levent-Levi

Yours truly won’t be attending the Mobile World Congress this year, but I found a story I wrote last year about a little excursion I took on the last day of the Barcelona-based mega trade show in 2012. So I guess this is not really about the GSMA trade show itself, but rather is about Barcelona, the city. However, the story reminded me of the hopefully obvious truth that technology can work hand in hand with designers and artists and that the marriage of an artistic approach and technical delivery, can make all the difference in product design and creation.

Up a steep hill, far away from the hustle and bustle of the Plaça d’Espanya in Barcelona is a small Luthier shop called Jerzy Drozd Basses.

I had heard of the bass guitar maker before and really appreciated his complex, unique designs and aesthetics, but hadn’t really paid attention to where his shop was located.

Last year in February of 2012, as my travels to Barcelona approached for the Mobile World Congress, I realized that Jerzy Drozd was actually based in Barcelona. What luck and what a shame it would be to travel 8000 round-trip miles  and not see the shop of this most interesting Luthier.

The Hike
With the news cycle dead by the last day of the Mobile World Congress, I ditched the Fira early that Thursday and headed up the hill to the north part of Barcelona.

Hill is possibly somewhat of an understatement. In fact, the walk up to the Horta-Guinardó district was steep enough to have an “incline track car” that I unwisely dismissed as unnecessary.

30 minutes later, I arrived at Jerzy’s studio, drenched in sweat, out of breath and late to my appointment, yet exhilarated to have seen a beautiful view of what seemed like the “real” city of Barcelona to me.

After a few moments, Jerzy emerged from the depths of the studio and easily forgave my tardiness stating that “everyone is always late” finding the studio in the remote streets at the top of Montressa. We started a tour of his fantastic wood shop/studio.

The New Approach
I had seen Jerzy’s basses before in magazines, and their marvelous, organic shapes are easy to remember. This guy makes bold, innovative and daring concepts come to life (check out the 12 string model he once created — that’s 12 string bass, not guitar.

Obvious comparisons to the architecture of Antoni Gaudi come to mind when looking at the undulating organic shapes of his basses. I asked about this however Jerzy told me that if that if there is a relation between his bass designs and modernism of Gaudi’s colossal influence on Barcelona, it is unintentional. He just follows his gut when designing.

To look at the finished products, you would think that these bass guitars are built completely by hand – soup to nuts – however I was shocked and impressed to find out that Jerzy is as much a technologist as a craftsman.

While Jerzy used to build all his basses completely by hand, he has been able to evolve his methods using technology in a way that allows him to keep the same aesthetic and quality, but cut down on the time he spends on the less intricate portions of the labor in making a bass. This actually allows him to focus more effort and time on the craftsmanship parts like inlays and custom bodies and detail work.

I want to emphasize here that he is using technology as part of his art and not replacing it. It is a modern approach to craftsmanship and he has been able to increase his throughput, while still maintaining an independent shop he runs by himself.

Design and Wood Shop
Jerzy uses software by Rhinoceros and MecSoft (VisualMill) to design the initial bodies of most of his bass guitars these days and has his cutting machines in the lower area of his studio networked directly to his computer workstation.

His basic designs are mechanically hewn from the wood and then he works the gorgeous details and inlays (of which there are many) by hand. With this approach he is better able to meet increased demand for his basses.

The Sound
There was no way I was getting out of his shop without playing one of his basses. His Obsession 4-string model was in the foyer of his studio and I played it. Jerzy ran the camera while I showed off a bit.

The video doesn’t accurately communicate all of the tonal qualities of the bass, but trust me, the lows were rich and the highs cut through easily. Light and sturdy, the bass was a dream to play and the extra detail Jerzy puts into his bass guitars is noticeable in the feel of this instrument. It has a unique, comfortable, feel.

So What Am I Really Saying Here
It’s not unique that Luthiers use mechanized, computer aided tools these days, even at a small scale or in independent shops. It’s the contemporary way to produce. But for some reason, it is surprising to me that Jerzy’s basses are started this way — these just aren’t your every-day instruments. What I mean is that they just don’t look like this could come from a machine. And I guess they don’t really come from a machine. They come from Jerzy’s mind. The palette of his tools is just a modern way of working and evidence of his ability to innovate and adapt while hanging on to his vision — the mark of a great craftsman.

Editor’s note: Adam Jackson is a San Francisco-based serial entrepreneur and angel investor. Follow him on Twitter at @adamjacksonsf.

No part of building a startup is tougher than recruiting your team. Current supply is not meeting the demand for qualified people. Even President Obama is aware of this. And while innovative approaches, such as Google’s Summer of Code, to increase the number of experienced engineers will help in the long term, they aren’t of much consolation to those of us in the entrepreneurial trenches who need engineers to help us build products.

Companies have to compete against every other venture-backed startup, as well as big companies like Google, Twitter and Square that are willing to throw big salaries and perks at top talent. In addition, strategies for recruiting top talent often represent a moving target, as the best strategy five years ago might not be optimal today. For example, in recent years the visibility of talented engineers has increased, with many of them posting detailed profiles on sites like GitHub and Stack Overflow. This increased visibility impacts recruiting strategy.

Even more challenging for our startup in particular is that we are trying to keep a low profile about what we do, so reaching out to engineers is harder at this stage. That said, over the last few months we’ve managed to recruit some incredible folks to join our team. It wasn’t always easy but after some trial and error, we developed a method that worked well for us.

The Job Board Route

I’ve always taken to heart Michael Arrington’s advice to hire the right people and watch every penny, and so it was important to me to focus on strategies that were both effective and offered good ROI. I started by posting to a number of job boards using JobScore.com (an excellent candidate tracking system that also syndicates your listing to dozens of job boards) and quantity wasn’t an issue as lots of resumes came rolling in. However, the quality of the candidates and fit for the roles I was looking to fill wasn’t there.

The next step for me was A/B testing subject headers. If the email never got opened, its contents didn’t matter at all.

One of our primary needs is mobile engineers with 3-5 years of native app experience. Simply put, there aren’t that many folks out there who have that background, and the odds that someone with that background happens to be surfing a job board and comes across our posting are pretty small. So while we didn’t have the success we were hoping for, we also weren’t all that surprised.

Targeted Searching

I then began to search directly for potential candidates. There are a lot of ways to do this – Google, LinkedIn, etc. LinkedIn gave me visibility into possible fits, but unfortunately the InMails I sent didn’t get any response. It’s possible that this was due to my initial messaging, but it also could have been due to the fact that the types of people I wanted to reach typically receive a lot of InMails and often just ignore them altogether.

I ended up settling on a tool from a company called Entelo. Entelo gave me the ability to find candidates by showing me their relevant social profiles (e.g., their profile on GitHub), and it also provided, in many cases, contact information. Armed with that information, I was now able to begin to scale my outreach efforts.

Grabbing Their Attention

The next step for me was A/B testing subject headers. If the email never got opened, its contents didn’t matter at all. So I grouped my potential candidates into batches and tested various subject headers against each other. After a number of iterations I discovered that a subject header containing the name of one of our investors performed the highest in terms of response rate.

My final step then was to hone messaging. Unlike most recruiting pitch emails I’ve seen, I worked to focus as much as I could on the candidate instead of simply listing all the reasons why our company was awesome. The goal was to make the email feel personable and to open a dialogue. I wasn’t trying to sell them on anything but rather hoping for an initial conversation.

Within a matter of weeks I had a full pipeline of potential candidates and was in the enviable position of having to reject candidates that I would have previously considered “perfect 10s.” It was a ton of work, especially in the early days, but we now have a team that’s firing on all cylinders and is heads down on building some amazing, scalable software.

Recruiting is certainly daunting and tough at times but also incredibly rewarding. It had been a number of years since I’d built an early-stage team and consider myself lucky to have quickly found a method that worked well. Here’s hoping that some of what I learned will be helpful to you if you’re tasked with building a team of your own.

[Editor’s Note: This is a weekly series. If your company is doing something amazing to help a charitable cause or doing some good in your community, please reach out.]

Disruption comes in all shapes and sizes, and benefits people of all shapes and sizes. When you think about global entrepreneurs solving hard problems, you might not think about creating hardware products that aim to save the lives of premature babies.

A company called Embrace, based in India, is doing just that. It sounds lofty, altruistic and extremely difficult. That’s mostly because it is, and Embrace is making a difference in the face of uphill battles that they see as completely solvable and surmountable. According to WHO, 15 million babies are born premature throughout the world, and 1 million die annually from preterm birth complications.

Breaking down the walls of personal healthcare sounds like something that goes on in an MIT lab, but it’s  happening in the city of Bangalore. Embrace has developed an innovative, low-cost infant warmer that allows families to take their newborns home and care for them in a safe and affordable way. Most of the time, these babies have to stay in hospitals, which can be extremely expensive, away from the parents. Since premature babies cannot properly regulate their own temperatures, these devices help keep them warm in the privacy of their own home. Embrace’s infant warmer costs a fraction of the price of existing solutions and functions without a continuous supply of electricity.

For reference, Embrace has taken this device built by GE, and made it cheaper, mobile and more personal:

The result? These items are completely conceived of and designed and manufactured by Embrace:

This product requires no in-depth training to use, no electricity and no maintenance. It just works, as field tests have proved before launching its latest version.

The most interesting thing that I gleaned from talking to one of its co-founders, Rahul Panicker, is that its number one competitor, in theory, is GE. It happens that GE is a global partner for Embrace when it comes to distributing their product. For the for-profit arm of Embrace, this is a fantastic position to be in, business wise. After two years, grabbing funding from Khosla Impact and Capricorn Investment Group doesn’t hurt either.

Embrace started as a team project at Stanford and has evolved into its current iteration in Bangalore, drawing employees and volunteers from all over the world who are focused on creating change and disrupting emerging markets. I spoke to some marketing interns that had come from Palo Alto and Mountain View specifically to work on this problem. As the team walked through some of its design concepts, it felt like this would be the product that Apple would create if it were in the healthcare space…there’s that much attention to detail here.

Even though there is no medical device standard in India, the team has adopted the European standards, which is a forward thinking move to make its products available everywhere they are needed. The team sees huge opportunities for Embrace products in Africa, Ghana and Latin America with at least pockets from 30 countries total requesting the product to be launched in their back yard.

Until that expansion comes, which it most certainly sounds like it will, Embrace is focused on making a big difference where it is. The feedback that they’ve received and business they’ve gotten, mostly from word of mouth between families, is important lessons and feedback learned as a tiny group of people try to tackle huge markets like healthcare.

Since I’m on the Geeks On A Plane trip with Dave McClure, I’ve been bouncing some ideas off of him as far as what stories would be interesting for you, as readers, to read and learn something from. On Embrace, McClure says that their story is a perfect example of “India lifting India up and not relying on anyone else.” That’s pretty powerful.

You can participate by donating money to Embrace’s non-profit arm or just sharing their story with friends. This company has made a product for hospitals that cost $250 and products for home that cost $80. I walked away impressed and inspired, and I of course asked McClure if he’s invested in the company yet. His answer was “not yet,” which certainly doesn’t sound like a “not interested.”

Editor’s note: Mrinal Desai is co-founder and CEO of addappt, developer of an iPhone address book app that your friends maintain. He was also the first business development manager at LinkedIn. Follow him on Twitter @mrinaldesai. 

Curly: Do you know what the secret of life is? [Holds up one finger.] This.
Mitch: Your finger?
Curly: One thing. Just one thing. You stick to that and the rest don’t mean shit.
Mitch: But, what is the “one thing?”
Curly: [Smiles] That’s what *you* have to find out.

For startups, a lot has been discussed about how to play the market: mobile first, web second. Many startups present themselves as mobile-first operations. Larger companies like Facebook are now saying they are a mobile company – not surprising since their mobile DAUs for the first time surpassed the desktop web DAUs.

These discussions about whether to be mobile or web first mimic discussions that take place about companies in the retail space: Should we open stores in BRIC countries, Europe or Latin America? And then should the store look like those at home or built locally to fit the culture?

But what exactly is it about the mobile market that changes the rules of the game and why might this be the best thing for startups?

Mind Share – Being First With A Differentiated Product

The size of the screen, the pattern of time availability and our “location” in the real world lead to a more single-task orientation than when confronted with the desktop web. One does one task at a time on the phone, and it tends to capture undivided attention for that short time span. Accordingly, the device aligns itself to bursts of one-task activities – there is less time (and room if you consider the screen size) for distractions.

I want to get somewhere and I need directions, and I don’t want to easily get distracted with news or a game. It’s lunch time; I want to eat and want to know which restaurant I should pick, so I pull up reviews – I don’t want to easily get lost in my email at that time. If I am responding to an email, it is going to be short and I am not going to switch to another app until I am done (I might on the desktop). I have downtime waiting in line, so I cut ropes, slash fruits or crush pigs with my nimble fingers. I am in bed, and I want to catch my news quickly. It is all about making decisions quickly. Mind share enables that.

This has led to an inherent difference from the web – the “one-thing” mobile app ecosystem versus the “many-thing” web. You have to look no further than the growth of the app economy where four out of every five minutes on a phone are being spent on an app. Or consider Apple’s recent announcement of 40 billion downloads, half of which were in 2012 alone.

On web, mobile or any business, companies always work hard to differentiate with that one thing with which they want to capture the user’s imagination. When you capture imagination, you get attention, and when you get attention, you get engagement, which leads to loyalty. Whether it is on mobile, web or consoles, everything else must be built and extended to protect that one thing – Gmail, Google+ and YouTube are all examples of Google protecting search. Facebook Camera and Poke are efforts to protect photo sharing on Facebook.

But what has changed with mobile is that no (large) company has been able to pull off a “fast follow” to unseat the incumbent startup who has mind share with that one differentiated thing. Some just chose to acquire the mobile startup instead – Twitter bought Tweetie and Zynga bought Words with Friends, for example.

The best thing that can happen to a startup in the mobile space today is a big company copying it.

It became evident with Facebook’s recent attempt to Poke a hole in Snapchat’s market share. Or Facebook pursuing Instagram; Twitter or Yahoo/Flickr adding filters to pursue Instagram users; Facebook (killed Places after one year of launch) or Yelp chasing Foursquare with checkins; or Apple’s iMessage and the continuing growth of WhatsApp. With almost 263 million monthly active users, Rovio comes very close to the 311 million MAU for all of Zynga. Furthermore, now we are starting to see startups that had the first-mover advantage grow even further when a larger company tried to do the same “one thing.” The barrier of entry is that mind share.

It was and is still very different in the “many-thing,” non-mobile world. We saw Myspace come from behind and dethrone Friendster and then Facebook come from behind to remove Myspace. Gmail followed fast and took on Hotmail and Yahoo Mail successfully. Internet Explorer decimated Netscape and now Firefox and Chrome are giving IE a run for its money on the desktop. Microsoft persisted with Xbox and is a leading console now. RedBox, Hulu and Amazon Prime Video are nipping away successfully at Netflix.

Before, every startup when raising capital was invariably asked the dreaded questions, “What if Microsoft or Google built this?” and more recently, “What if Facebook built this?” Now in mobile, if that is the question your startup is asked, you are in luck because it implies that you are first to market with a differentiated product. And if a “fast-follow” attempt happens, it will probably validate your product further, highlight your effort and help you gather even more mind share leading to further market share. Believe it or not, the best thing that can happen to a startup in the mobile space today is a big company copying it.

The first-to-market differentiation, that one thing, is of paramount importance, though. It was filters for Instagram, ephemerality of photos with Snapchat (the complete opposite of Instagram and Facebook), cross-platform free messaging with WhatsApp, Checkins for Foursquare or user experience with Tweetie. As Curly says, you have to find out that one thing first.

It is hard to build a consumer service, or any good business, anywhere and in any industry, but if you are first with that one thing right on mobile, a larger company being interested in what you do might be the one best thing to happen to your startup.

[Image: Jack Palance in City Slickers]

The Galaxy Note 8.0 — the newest device in Samsung’s many-sized range of tablets, unveiled today at Mobile World Congress in Barcelona — has just managed to trump Apple’s iPad Mini in the small tablet category with one-tenth of an inch more of screen space (more on the device in our hands-on). At the same time, Samsung is also introducing a few new services and features — including expanded hovering capabilities and more apps, which it hopes will also help it gain more consumer ground against the world’s biggest tablet maker. The extra features show that Samsung sees improved services and content this as key to improving its market share in the tablet space.

Don’t touch, just hover

Samsung’s S Pen stylus has been upgraded to work both on the touchscreen of the Note 8.0 as well as with the physical navigation buttons, and Samsung is also extending the functionality of the pen in other ways. And the Air View feature, where users can initiate previews by hovering their pen over something without touching the screen, is now getting expanded to third party apps. The first of these is a new version of the Flipboard social newsreading app, where users can select and expand a tile by hovering the pen over a selection.

Yes, you can argue that this is more of a gimmick than a useful element at this point: why, exactly, do you need to hover the pen over the over a tile when it’s just as easy to tap and select? And isn’t the point of the touchscreens that you can “touch” them? But I can also see how this could become more useful as the feature develops and gets used elsewhere. For example, one of the annoying issues with touchscreens are accidental clicks, such as those made on ads when you are trying to navigate around an app.

Companies like Google are introducing ways of reducing accidental clicks; others are even playing around with the touchscreen to de-sensitize them for those with less precise fingers. But the hovering pen — whose pin of light needs to rest for a brief moment to select an item — could be another way to select what you want to see and do.

In addition to the Flipboard app, the hovering already works with file folders, email, gallery views of photos and videos, a spokesperson notes, and it will also work with more apps in the future, as developers upgrade them to recognize and respond to the S Pen’s proximity to the screen.

New apps, and new features in older apps

With the Note 8.0, Samsung is also ushering in a couple of new developments on the apps front, in addition to the new version of Flipboard.

In keeping with Samsung’s original vision of the Note acting as a kind of organizer and productivity device — more screen than a phone for planning; but smaller than a tablet to make it portable — Samsung has scooped an exclusive on a new Android app launch. Awesome Note, a note-taking that lets you track progress and make lists across different categories, has up to now only been available for iOS devices, where the full edition of the app for iPad retails at $4.99.

Now developers Bird are releasing an Android version, and while this will also be sold as a paid app in the Google Play store, Samsung will be bundling it as a free app on the Note 8.0 “for at least a year,” according to Michael Lin, marketing manager, Samsung Electronics.

Other apps that will be preloaded on the device include the newest version (2.0) of Chat-On, Samsung’s cross-platform, cross-media group and direct messaging service; Reading Mode that modifies the screen brightness for reading; and Smart Remote, Samsung’s universal remote control and electronic program guide, playing into the fact that nowadays a lot of consumers (80% in the U.S., claims Samsung) use a second device like a tablet while watching TV.

Talk to me, but not everywhere

The camera features, as Chris pointed out, are not brilliant on the Note 8.0 — and so we may not see too many people doing this with them:

Nor, it seems, will we see many people in some parts of the world using the Note 8.0 to do this:

Although the Galaxy Note 8.0 is incorporating, as Lin says, “all of the capabilities of a smartphone into a tablet,” the phone feature will be disabled on the device when it launches in the U.S., both in the initial WiFi version as well as in the 3G/LTE versions. Whether this is because carriers have asked Samsung to remove this to keep the device from cannibalizing handset sales, or whether it’s because of consumer taste, or for another reason entirely, is not clear.

It’s a pity, because while you may not want always to talk on your tablet, it can come in useful as an occasional phone, both for video and voice calls. Our test of the phone found the voice quality decent.

The voice calling feature will be included in the device when it launches in other parts of the world, Samsung says.

Nortre Dame cathedral photo: Tumblr

GreenWave Reality’s smart light bulbs use energy-efficient LEDs for illumination, but they’re also each armed with an internet-enabled chip, allowing them to be controlled wirelessly.

This solar-powered watch syncs with your iPhone to learn the time, and it buzzes you when a new call or e-mail comes in.

The other strap-it-on-and-get-rad cameras out there are all pretty sick in their own right. But for ease of use, no POV camera is sicker than Drift Action’s HD Ghost cam.

From cable channels to newspapers to social media links — all your information now fits in your palm.

JBL’s compact Bluetooth speaker does away with battery anxieties and wall-wart woes — it plugs directly into any electrical socket.

WordPress, Blogger and Tumblr have done a great job of making website creation accessible to anyone, but the novice can still be a bit overwhelmed by sometimes sophisticated back-ends and CMS, especially when these platforms are built specifically to be as complex as they are simple, to expand the potential demographic.

But a YC-backed company called Padlet (formerly Wallwisher) is launching into public availability, and its intuitive drag-and-drop interface bests even the top platforms when it comes to quickly and easily building a website. What’s more, Padlet works a lot like Google Docs in that multiple users can modify and add to the page in real-time, forming a truly collaborative place to work and create.

“We wanted to solve the problem of ‘I want to put something on the internet, but how do I do that’,” said co-founder Nitesh Goal. “There are 25 answers to that question — images go on Flickr, videos go on YouTube. We wanted to make the experience of posting things to the internet as fast and easy as possible.”

It’s available now, and you can check it out here. Clearly, it’s an interesting take on democratizing website creation, but the question remains — who is this for?

Padlet claims that its users are quite diverse, ranging from project managers using Padlets as creative white boards to teachers collaborating with students. It’s also being used by companies and organizations to engage with their fan bases/audiences, which you can see here, here, and here.

“We hear a lot of positive feedback from customers who aren’t familiar with computers, but the other core part of our demographic are people who are ultra-comfortable with computers, like bloggers,” said co-founder Pranav Piyush. “They want to build a place where they can interact and create something collaboratively online.

Padlet gives the user plenty of control over the end-product, offering various wallpapers and customization options. And since you can drag and drop various content, the layout is anything you want it to be. Padlet lets users dictate who can modify the page with the privacy settings, and from there the link to the page can be shared just like any other website.

But how will the company make money?

For one, Padlet has already started generating revenue. The company has found that small businesses and organizations want to use Padlet privately, under their own website, with the content uploaded going through their own storage systems as opposed to Padlet.

But it has the potential to expand beyond that.

“We actually believe we can play a part in payments down the line, by letting you build a page full of stuff that’s for sale and adding a payment widget,” said Plyush. “Right now it’s very basic, but more sophisticated interactions are on our timeline.”

Padlet is available now, and can be found here.

Inventory management startup Stitch Labs knows it’s not easy being a small independent vendor. In addition to tools for tracking their inventory, those folks also need to be connected to multiple online stores, shopping carts, payment systems, shipping and fulfillment providers, and accounting tools.

And so, the company has spent the last year or so integrating with various other companies as a way to provide a single platform for connecting online store owners with all the pieces they need to build a successful business. That means connecting with sales platforms such as Etsy, Shopify, and BigCommerce, shipping and fulfillment companies like ShipStation and Amazon.com, and payment offerings like Verifone’s Sail.

Next up? Making it easier for vendors to keep track of their finances by integrating with cloud accounting software provider Xero.

By doing so, clients will be able to seamlessly pull in sales data from their Stitch accounts and have it automatically appear in Xero. That will allow them to track all sorts of taxes and other accounting stuff that I’ll never understand because I don’t have a small business and frankly it scares the crap out of me to even think about it. Anyway, Stitch will be the first U.S.-based inventory startup to work with Xero.

For Xero, the partnership adds another way to connect with users. By providing cloud-based accounting solutions with a robust API, Xero hopes to integrate with third parties to reach small businesses through the tools they use for inventory, point-of-sale, and other transaction-related applications.

Stitch Labs has raised $1 million in funding from True Ventures. The company has seven employees based in San Francisco.