Category: Tech news

It is frighteningly easy to dupe the public with statistics, since most journalists and readers aren’t trained in all the sophisticated ways pollsters can make subtle changes to research that make a gigantic difference in the outcome. Recently, a near-paranoid picture of the American public made its way around the media cycle, thanks to a “study” commissioned by TrustE, a web security company, on privacy. Since we know you want to be intelligent readers, and you can’t always depend on journalists to recognize a bad statistic, we thought we’d show you how to spot a misleading study using the report’s glaringly bad methodology.

1. Beware of really high or low percentages. A sizable chunk of the American electorate is shockingly ignorant. As of 2008, 30% still believe Saddam Hussein had weapons of mass destruction and 18% believe the sun revolves around the earth. Any truly representative survey will reflect uneducated respondents and therefore will have a buffer away from 100% and 0%, cushioned by these citizen-ostriches.

So, when TrustE reports that 94% are concerned about privacy, 79% delete cookies or browser cache and 64% use ad-blocking or anti-tracking systems, ready your bullshit meter. I seriously doubt 79% of users even know they use a browser, let alone the intricacies of the setting preferences. As quasi-evidence, see this funny man-on-the-street interview clip of pedestrians scratching their noodle at the question, “What is a browser?”

2. Beware of non-peer reviewed research or surveys not conducted by an established authority (like Pew): Research has found that industry-funded studies are biased towards the outcome that makes the sponsored business the most money (i.e. smoking is really unhealthy, despite what the tobacco lobby may claim).

3. Word order and phrasing matter: In surveys, the exact same question can elicit substantially different results if questions are asked in a different order. In one study, dissatisfaction with President Bush jumped 10 points merely if it was asked after respondents rated their “overall satisfaction” with his performance. Similarly, in Iyender and Kinder’s famous experiment, the researchers found that they could manipulate which issues voters found most important by changing the topic of TV shows they watched right before a survey.

Phrasing matters too: In 1989, a poll found that far more respondents seemed to support interracial marriage when they were asked whether the government should “allow” the marriage (32%) vs. “forbid” such marriage (19%), even though, legally speaking, it’s the exact same. The polling irregularity, known as the “forbid/allow asymmetry,” showed how seemingly innocuous changes could cause a big difference in the outcome.

Similarly, the TrustE’s study phrasing is all about privacy, and primes unsuspecting respondents to be scared about the potential ways privacy can be abused. So, of course, it appears as though respondents think privacy is the most important bloody issue on the planet. It’s the equivalent of asking, “Did you know that your neighborhood had 10 violent break-ins last year? So, how likely are you to buy a security alarm?” A more responsible way to handle a poll is to intersperse neutral or irrelevant questions in with randomized question order.

4. Beware trend research based on respondent memory. TrustE claims that concern for privacy is on the rise, based on the number of respondents who said they were more concerned now about privacy than a year ago. Bullshit. Respondents are known to have crazy-bad memory recall: they forget heart attacks, cancer, the date of the death of a relative , and major life episodes. We have a hard enough time remembering what we had for breakfast yesterday, let alone a an obscure personal preference 365 days ago.

TrustE (and their polling firm, Harris Interactive) aren’t alone in conducting bad research: it’s done with politics, social media, education and countless other issues. So, shield your minds with knowledge and a healthy skepticism, the wielders of bad research want to own your opinions.

Why is the cloud so hard to make funny?

Do a search on YouTube. You will see songs about the cloud based upon Joni Mitchell and Vanilla Ice songs. “Cloud, Cloud Maybe.” Groan.

Thank goodness for The Onion. Finally, the cloud is funny.

The cloud is not supposed to be funny. How can you be funny about a bunch of servers? Elasticity? That’s not funny.

There are some decent attempts.

One Microsoft spoof on VMware is funny but not Onion kind of funny. It features Tad, the sales guy from VMlimited.

And then there is the cloud consultant. He has no credentials but lots of friends who are social media experts.

You can get a bit of a laugh about Hitler learning about a security issue. But the Hitler spoofs are numerous on YouTube so it doesn’t have quite the edge.

Most of the cloud videos are so awful that they become funny in their own cringing way.

Microsoft’s “To the Cloud,” campaign ranks high in that category.

I did some checking to find other videos by The Onion about the cloud. I could not find one. Even The Onion struggles with making the cloud funny.

That means just one thing. We need more cowbell.

There’s something very cool about Google Now, which the company announced at its I/O developer conference a few weeks ago. At the same time, though, Now also has the potential to become Google’s creepiest service yet. Here is what it does (assuming you opt in to the service and have a phone or tablet that runs Jelly Bean): Google Now learns from your search behavior and shows you cards with information you regularly search for (think game scores of your favorite teams, flight schedules) or that could be relevant to you because of your current location, including weather, nearby restaurants, schedules for the next bus station, how long it’s going to take you to drive home and currency information if it finds you are in a different country. It also uses a whimsical theme to highlight the time of day and where you are (it showed an image of Sydney’s Opera House, for example, when I was there a few weeks ago).

All of this could easily scream “invasion of privacy.” After all, this is one of the few Google services that really reveal how much the company really knows about you. The reason why it doesn’t quite feel like that yet is because of the limitations of the service. There is so much more Google could do with this service, but it almost feels as if Google deliberately kept some features back for the time being to ensure that users (or at least those few lucky ones who have access to a Jelly Bean device) can get used to how it works before adding more tools.

“Just the right information at just the right time.”

Google says Google Now is meant to give you “just the right information at just the right time.” Having used it pretty intensively both at home and on the road for the last three weeks, I’m happy to report that it works pretty well. When I’m at a bus stop, it will show me when the next bus is supposed to arrive. When I was out of the country, it would automatically show me what time it was at home and the latest currency exchange rate. Back at home, it quickly learned where “home” actually was (it did ask me to confirm this information just to make sure, though) and would then always show me how long the drive home would be whenever I was more than a few miles away.

It culls its data from all of your Google searches, no matter where you search (as long as you are logged in to your Google account). After a local search (say for a restaurant or airport), for example, it will start showing you a card with the current driving time to those locations. Do a flight search on Google to see if your flight is still on time and it will start showing you that info in Google Now, too.

When you opt in to using the service, Google says Now says that it will access your location data and your location history. The service also “uses data from other sources, such as your data in Google products or in third-party products that you allow Google Now to access. For example, your tablet’s synced calendar may include entries from non-Google calendar products.” Currently, though, it seems like the service most relies on search data and access to your calendar.

Despite everything that works well, Now can also be clunky at times. For no apparent reason, for example, it often decided to show me directions and travel times to local restaurants I searched for weeks before Google Now was even available. Unless you use Google instead of Flightstats or other tools to search for flight delays, it will never show you any flight information and because Google Search doesn’t let you search for flight numbers and dates at the same time, it will always show you information for the current date, even if your flight is still a day or two out.

Still A Few Features Shy Of Being Creepy

It’s easy to imagine a few scenarios where Google could do even more with your data. What if Google Now could look at your email inbox, for example, and automatically detect flight itineraries, hotel reservations and OpenTable confirmations and then use this data to give you more specific information on the Google Now screen without having to first search for it? There are no technical reasons why Google couldn’t do this. TripIt, WorldMate and others already do some of this with emails you send them, for example.

That’s apparently a line that Google isn’t ready to cross yet, though. People would likely freak out if Google decided to analyze their individual emails for Google Now, though it obviously already takes a close look at your inbox to target ads anyway. For many, it will already be creepy enough to see what Google can learn about your daily habits based on your search and location history. For now, Google has decided to err on the safe side and with just about a dozen different Google Now cards, it’s a pretty limited service that, despite its promise, doesn’t always offer you “just the right information, at just the right time” (most of the time it just shows the weather card anyway). As Google expands the service, however, it’ll be interesting to watch how long it will take before it starts pushing things a bit too far.

Editor’s Note: This is Redpoint VC’s Tomasz Tunguz’ second article in a series examining trends in the public and private technology markets.

Last week, we discussed four trends in the public technology markets. Today we compare the current state of the US venture capital to historical norms.

First, we will examine the inflows into the venture capital market: dollars raised by venture capitalists. Then we will explore the outflows, VCs’ investment pace, contrasting the dollars deployed over time. Last, we will investigate market sentiment and consequent price fluctuations.

Venture Dollars Raised Fall 27% Below 15 Year Trailing Median

The venture capital industry is in the midst of a contraction. Since 2001, limited partners have invested a median of $22B each year in venture capital. Over the last 3 years, those figures have dropped by 50% to $16B annually.

Venture Funds are 14% Smaller

There are fewer firms investing less money from smaller funds in 2011 than on average over the past 12 years. In 2011, 182 venture firms raised funds, about 16% below the 12 year median. The average 2011 venture fund is 14% smaller than the 12 year median.

However, there is increasing concentration of capital in well-known firms – a flight to quality phenomenon. Historically, the top 25 firms have raised about 30% of all venture dollars. During the first half of 2012, the top 10 firms raised 69% of all dollars, a tremendous concentration. These large funds skew average fund size upward suggesting smaller firms are disproportionately affected by decreasing fund sizes governed by a declining LP capital base.

Venture Investing Pace is Precisely Average

Despite the trends in the fundraising market, 2011 was an average year for venture investing. Over the last 12 years, venture capitalists have invested in 3076 US startups annually on average. In 2011, 3206 startups raised venture capital representing an insignficant 4% decline. Over the past 10 years, VCs have invested on average $33.8B annually and 2011 again matched the average at $32.6B. Both investment pace and investment dollars are on the rise, a seemingly positive signal.

Investing pace cannot remain constant forever because venture capital inflows are declining. But this rate may be maintained for a few years. VCs raise funds for ten years and typically invest all the dollars raised within the first four years. The difference between dollars raised and invested is called the overhang. This overhang provides the extra capital to maintain the current investment pace.

Investment Sizes Are Growing in Later Stages

Although most pricing data is private, we can use median investment size as a proxy for pre-money valuations if we assume the ownership stake a VC takes in an investment has remained constant over time.

Seed investment sizes have remained relatively constant over the past ten years, although the data is most sparse for this asset class since many investments are unreported. Series A prices have been declining steadily over the past 10 years at a rate of -5%, while Series B and Growth investments fell dramatically during the financial crisis. As public market prices fell, so did Series B and Growth valuations. However, these negative trends have reversed in the past year: Bs and Growth rounds have increased in size and are now both about 10% greater than the 12 year mean.

These data contradict the market perception of ever-larger rounds at ever-better prices.

A Tale of Two Markets

Performing analyses on the median investment sizes masks the outliers who make headlines and consequently are the most visible indicators of the state of the fundraising market.

The average dollars invested across all stages has risen by 25% since 2008, implying outliers raise money at sufficiently high prices to dramatically skew the average higher than the median. Much like the venture capitalists who invest in these companies, a few very high profile startups are raising disproportionate amounts of capital. Over the past 12 years the difference between average and median investment sizes have never been as great as the past 2 years. In 2010 and 2011, the average investment is twice as large as the median investment.

These pricing trends describe a tale of two markets. A small number of brand name startups raise large, generously priced rounds from top investors with large funds skewing data upward. Meanwhile the rest of the venture capital market has contracted and investors are maintaining strong price discipline, investing in relatively smaller rounds at lower prices.

Reversion to the Mean

The venture capital market is evolving. It’s reasonable to expect most of the metrics describing the venture capital industry to trend toward the mean: slight increases in dollars invested in venture capital, continuity for investment pace and capital deployed, steady valuations in early rounds but declining valuations in later rounds. Such a reversion make take time. After all, early 2012 data on the fundraising market indicates contracting trends are persisting. For now, at least, the market is in a Dickensian state.

NB: Data used in this analysis are publicly available through Dow Jones VentureSource and the NVCA

Featured image: Getty/Phil Ashley

The Samsung Galaxy S III continues to be one of the hottest Android phones we’ve ever seen. When I reviewed the phone, I said flat out that this is the phone you’ve been waiting for. And after John and I got another good look during an episode of Fly Or Die, we both gave the Galaxy S III a Fly. But one thing we haven’t really addressed is durability, which is why we thought you might want to take a look at this drop test by Gizmo Slip.

Spoiler Alert: I’ll now be talking about the results of the video, so jump past the break if you want to watch before reading.

There isn’t a whole lot of good news to share after watching this drop test go down. The Galaxy S III almost survived unscathed from the first drop, a four-foot fall on its back. Unfortunately, the glass of the camera cracked as the 8-megapixel rear camera tends to jut out the phone a bit.

The second fall, however, is where things really start to devolve. A corner drop from four feet totally destroyed the corner of the phone and sent a crack all the way from the bottom right corner of the phone to the top left corner of the screen. “For funsies,” Gizmo Slip dropped the phone one more time from four feet on its face. That didn’t actually cause much damage, except for a little more scratching on the corner.

I said it before and I’ll say it again: a phone of this caliber shouldn’t be made of plastic. It was my one big complaint when the Galaxy S III was released, though I’m sure there are reasons for a plastic paneling. Either way, however, the plastic didn’t do much to protect the beastly phone, so if you’re a new or future owner, be sure to pick yourself up a case and be careful.

[Hat tip to Gizmo Slip for the video]

Hope you got your 16GB Nexus 7 already. Google is no longer taking orders for the $249 model. It’s sold out. The product page on Google Play now sports a “coming soon” message and an input field for buyers to leave their email to be notified when the 16GB model is available again. The $199 8GB is still available with a shipping estimate of 3-5 days.

Citing sources close to Google, the Guardian reports that “the search giant seriously underestimated the demand for the 16GB version of its 7in Nexus 7 tablet.” Orders placed through last week will be fulfilled, but due to insufficient stock, Google is no longer taking orders for the model. There’s no word when the model be available again.

By all accounts the Nexus 7 is an impressive tablet with an even more impressive price. It outshines the Kindle Fire in nearly every regard with a better screen, improved performance, and a better user interface. Google has a winner with the Nexus 7, which is confirmed by the short supply.

The Nexus 7 is Google’s first entry into the tablet race. While the tablet is built by Asus, it carries Google branding. In fact, as far as I can see, the Asus name is nowhere to be found on either the Nexus 7′s product page or minisite.

A so-called iPad mini is rumored to hit the market later this year. With a rumored price of $249, the smaller iPad would likely steal some of the Nexus 7′s hype. Amazon is also rumored to release a revamped 7-inch Kindle Fire alongside a larger model that will directly take on the iPad. But as it sits right now, the Nexus 7 is the hottest small tablet available — but good luck getting one.

Startups seeking desk space in San Francisco will soon have another option to consider — the first floor of the offices of gift-giving startup Wantful, an area that it’s calling the Sutter Street Workspace.

It’s a pretty common practice for startups, in anticipation of future growth, to move into offices that are too big for their current workforce, then rent out the excess desks to other companies. But this effort, in particular, seems worth pointing out because it’s not just a few random desks, and it seems like there’s some attempt to build a real community, with Wantful promising advice, introductions to investors, and invitations to brown-bag lunch talks upstairs.

The location at 1244 Sutter St. is pretty cool too — it’s in the same building as the Avalon Ballroom, a famous San Francisco concert venue that once hosted Janis Joplin and the Grateful dead. In fact, the ballroom is where the aforementioned brown-bag lunches will be held.

Wantful says it’s looking for “early-stage startups that appreciate impeccable design and want to work alongside others who are design-driven.” Rents go from $1,400 a month to $4,800 a month. You can get more information by emailing [email protected] or attending the open house on Wednesday, July 25, from 4pm to 7pm.

Short Version

Motorola made plenty of waves when it introduced the Droid RAZR for Verizon last year, and somehow I doubt AT&T was very pleased with that move. With that one launch, Motorola instantly made AT&T’s high-end line of Android-powered Atrix smartphones look chunky and downright un-sexy in comparison

Now with the Atrix HD AT&T has its own vaguely RAZR-esque device to push to the masses, but how does it stack up against its forebears? Or, better yet, how does it compare to the devices that occupy the top tiers of AT&T’s smartphone portfolio? As it turns out, the answer is “pretty damned well.”

Features:

• 4.5-inch 720p LCD display with ColorBoost
• Android 4.0.4 Ice Cream Sandwich with Motorola’s custom UI
• 1.5GHz dual-core Snapdragon MSM8960 processor
• 1GB of RAM
• 8GB of internal storage, expandable with microSD cards
• 8MP rear camera, 1.3MP front-facing camera
• Runs on AT&T’s LTE network
• MSRP: $99 with two-year contract, available as of July 15

Pros:

• Motorola didn’t screw with Ice Cream Sandwich too much
• Excellent display
• Surprisingly strong spec sheet

Cons:

• Uninspired design
• The camera is generally pretty lousy
• Battery life isn’t the greatest

Long Version

Hardware/Design

I’m a sucker for a handsome phone, and to put it plainly, the Atrix HD isn’t much of a looker. It’s not ugly by any stretch (it’s far too inoffensive for that) but it seems like a considerable step backward from the progress Motorola made with devices like the Droid RAZR.

That said, the Droid RAZR’s influence is undeniable — if one of those svelte, angular devices suddenly got chubbier and softer around the edges, you would have an Atrix HD.

But let’s put those gripes aside for a moment, because there’s another one to dig into. The Atrix’s impressive 4.5-inch LCD display (ensconced in a protective layer of Corning Gorilla Glass) takes up most of the device’s face, but it seems a hair smaller than it actually is because it’s bounded by a pretty substantial bezel. In a way though, that bezel is something of a trademark of the Atrix family — the very first one had quite a bezel on it too, as did the Atrix 2.

A notification LED and the 1.3-megapixel front-facing camera sit to the left and right of the Atrix’s earpiece respectively, while a Motorola logo squeezes between those components and the top of the display. Centered just below the display is an AT&T logo, which happens to look an awful lot like a capacitive button — after years of using iPhones, my thumb instinctively reached for it a few times before I managed to get it accustomed to its surroundings.

Nestled at the very top of the device are ports aplenty since Motorola opted to stick the headphone, microUSB and microHDMI ports up there. The microSIM and microSD card slots are nestled under a pull-out plastic tab along the Atrix’s bottom left edge. Meanwhile, the volume rocker and the infuriating sleep-wake button sit high on the device’s right edge; I say infuriating because pressing either too high or too low along the button’s ribbed edge won’t bring the Atrix to life.

Fortunately, the Atrix’s rear end is far less problematic — unless of course you’re not a fan of the patterned Kevlar that takes up a majority of the space. Save for a thin and chintzy-feeling layer of plastic that runs around the rear’s outer edges, the only other thing not covered in the scratch-resistant material is a gently sloping plateau containing the 8-megapixel camera pod, LED flash, and rear speaker.

While the Atrix HD looks downright plump in comparison to its Verizon cousin, that doesn’t mean it has the weight to go with it. In fact, the situation is quite the opposite — at 4.9 ounces (the same as the iPhone 4/4S) the Atrix feels almost disconcertingly light given its curvy physique. I know, it’s a tough job to strike a comfortable balance between size and weight, but the device’s overall feel doesn’t do much to inspire confidence.

Software

After seeing Motorola clutter up its Android devices with its overbearing custom UIs for years, playing with the Atrix’s tweaked spin on Ice Cream Sandwich is like being able to breathe easy for the first time. It’s certainly not stock ICS, but Motorola has apparently decided to leave most of Google’s handiwork well enough alone — frankly, good on them.

Even more surprising is that what Motorola added to the mix is either generally unobtrusive or genuinely useful. Take for instance the small pair of arrows that now live next to certain apps like the phone dialer or the stock web browser. They’re there as a little visual hint, as swiping up or down on those icons allows users to jump into a quick view of information related to that app — for the dialer, a swipe brings up a list of favorite contacts, while a swipe on the browser icon displays the user’s bookmarks. Sure, they’re mostly things that users can set a widget for, but adding a subtle way to easily access and hide that kind of information is terribly thoughtful.

Also — and this may be a remarkably dorky admission — but Motorola’s default Circles widget is a mighty nice touch. The widget’s three circles display time, weather, and remaining battery life respectively, but as with those app icons, swiping up and down on individual circles lets users switch between different bits of pertinent data. Prefer a digital time readout over an analog one? Swipe away. Want to switch from a battery meter to a data usage tracker? You know what to do.

Motorola also transplanted SmartActions to Ice Cream Sandwich, which (if you haven’t yet heard) allows the device to execute certain user-defined actions when triggered by information like time or location. I’ve always fancied myself as more a “go with the flow” kind of guy, so I admittedly don’t rely on the automation feature much, but it’s simple enough to create an action for every stop or random event in your day.

Still, It should be known that there’s a peculiar sense of fun to be had in cobbling together new Actions, just because of the sheer flexibility afforded to the app’s users. Be on the lookout for SmartActions notifications though, as the app will keep suggesting new possibilities to you whether you like them or not until you pop into its settings and prevent it from doing so.

Perhaps the only truly clumsy part of Motorola’s UI is how users add new homescreen pages. You see, the Atrix HD has two of them set up out of the gate, and swiping to the right from the main page brings the options of adding a blank one or choosing from a series of homescreen templates to fire up. The problem here is that the transaction is noticeably jerky, especially considering that navigating through menus and apps is otherwise incredibly smooth. There are arguably cleaner ways to handle this process — a spin on HTC’s classic “hold down the home button” approach comes to mind — but it’s a minor gripe at best.

Add some redesigned icons, and you’ve got Motorola’s take on Ice Cream Sandwich in a nutshell. Apologies if I’m gushing a bit — I’ve never tried to hide the fact that I don’t like what manufacturers usually do to stock Android, so its little surprise that I’ve quickly grown to like Motorola’s “make minor, thoughtful improvements” approach.

As with every other smartphone AT&T has sunk its metaphorical teeth into, the Atrix HD comes with its fair share of bloatware. Most of those pesky apps can be uninstalled without issue (hallelujah!), and the rest can be disabled and hidden without too much effort. Sure, it’s not quite as good (or as satisfying) as removing them outright, but the little victories are better than none at all.

Camera

The Atrix HD has some great things going for it, but top-notch camera functionality just isn’t one of them. Don’t get me wrong — the camera will do in a pinch when you absolutely have to snap a photo, but its performance is ultimately underwhelming.

The issues here are numerous. Autofocus was a bit on the screwy side, for one — when left in full auto mode, the camera easily homes in on nearby objects but struggles to produce a sharp image when trying to focus on something farther away. White balance too seemed off, which sometimes led to predominantly white shots taking on a blue cast. Low light performance was similarly disappointing, with a fair amount of grain visible once light dims below optimal levels.

In fairness, it’s not all bad — like with other Ice Cream Sandwich devices snapping shots is incredibly quick, and videos recorded in 1080p don’t come out half-bad all things considered. On the off chance you think that a good camera is the single most important feature a smartphone can have, you’d do well to steer clear of the Atrix HD. Otherwise, the weak-put-passable camera is a notable sore spot in an otherwise solid device.

Display

While I’m more than happy to knock the bezel that runs around it, I can’t do the same for the Atrix HD’s 4.5-inch 720p display — it’s yet another pleasant surprise in a phone that seems designed to confound expectations.

As usual for TFT LCD panels, the Atrix HD’s display lacks the deep, sumptuous blacks seen in AMOLED displays, but white levels were consistently bright. On top of that, the display’s combination of size and resolution means everything is nice and crisp. To be more specific, the display features a pixel density of 326 ppi — handily beating powerhouses like the Galaxy S III (306 ppi) and matching handsets like the iPhone 4/4S.

Then there’s the color situation. Everything is nice and vivid (especially the tweaked app icons the Atrix is laden with), and colors remained bright as I bounced from viewing angle to viewing angle. Motorola also saw fit to throw in their new Colorboost functionality, which pumps up color saturation for more vivid images.

The Atrix is far from the first handset to try something like this — Sony’s Xperia ion tried the same thing with its Mobile Bravia engine but it pushed saturation to nearly lurid levels. Motorola’s Colorboost enhancements thankfully didn’t push things quite that far so users can expect and images visuals to pop instead of going outright nuclear. That said, not everyone may enjoy that additional visual flair and there’s no way to disable it, so it’s definitely worth taking a look at in person before taking the plunge.

Performance

Well now — the Atrix HD may not look like much of a contender, but there’s some real horsepower packed inside that unassuming frame.

Motorola wasn’t very forthcoming with processor details when the device first popped up on their website on one fateful July evening, but AT&T later confirmed that the Atrix HD runs on the same dual-core 1.5GHz Snapdragon MSM8960 chipset as seen in heavyweights like the HTC One X and the Galaxy S III.

That’s quite a catch for the budget-conscious handset, as it regularly puts up Quadrant scores just north of 5000 (the average of five trials was 5084) — not shabby at all, especially compared to the One X’s five trial average of 4995 and the U.S. Galaxy S III’s average of 5063.

That said, there was virtually no lag to be found while navigating between through menus and swiping through multiple pages of apps. Firing up and playing through some Grand Theft Auto III and Minecraft Pocket Edition was similarly smooth, as were my usual test videos (i.e. old episodes of Doctor Who). Suffice it to say, the Atrix should have no trouble keeping up with even the most demanding daily grinds.

As far as the Atrix HD’s network performance goes, I found little to complain about. It’s always sort of a crapshoot testing from my particular corner of New Jersey (especially because AT&T hasn’t yet seen fit to bring LTE online around here), but the Atrix HD managed to pull down an average of about 9.6 Mbps down and a strangely slow 859 Kbps up. Call quality too offered few disappointments — calls were generally very clear for people on both ends, though there tended to be a bit of audible buzz from time to time. Maximum call volume could have been a little higher though, but on the whole I had no trouble nearing people on the line, and vice versa.

I’m a bit of a stickler for nice speakers on smartphones, and the three-hole speaker embedded into the Atrix HD’s rear is decidedly above-average. It’s far from perfect (audio tended to be a tad on the echoey side) but it’s plenty loud enough or a little grooving on the go — something that plenty of other handsets have trouble with.

Battery

Though not as disappointing as the camera, the Atrix HD’s battery did skew toward the underwhelming side of things. Like its slim Verizon-bound cousin, the Atrix sports a sealed 1780 mAh battery underneath that Kevlar black plate. That battery gave Jordan some trouble when she reviewed the Droid RAZR way back when, but the situation isn’t quite as rough this time around.

The Atrix HD managed to plug along for 5 hours and 10 minutes of our usual stress test — an automated series of Google Image Searches with the display set to 50% brightness. Meanwhile the Atrix HD only lasted just under five hours in our video stress test, in which the device loops a 720p video at 50% screen brightness and with volume cranked all the way up.

When it came to getting me through a normal day of calling, web browsing, checking emails, and sending obnoxious text messages, the Atrix managed to hang in there for just under eleven hours of on-again-off-again use before finally going dark. As always, your experience is going to differ from mine — that ten hours was enough to see me through most days but if you’re the type to unplug your phone and start your day when the roosters crow, you’ll almost definitely have to reach for that charger before day’s end.

Really, the most frustrating thing about the battery is that Motorola could easily have gone for something bigger without sacrificing too much in size. With its 8.4mm waistline, the Atrix HD is just over half a millimeter thinner than the Droid RAZR Maxx. Some concessions probably had to be made for the updated hardware that went into the thing, but would it have killed Motorola to pop in a slightly more substantial battery?

Conclusion

Let’s touch briefly for a moment on what the Atrix HD isn’t. It’s not the kind of that phone will turn heads as you walk down the street. It’s not the most solid feeling device you’ll ever pick up. It’s not a terribly great camera, either.

It is, however, a hell of a phone for just $100. What the Atrix HD lacks in style (and it lacks a lot in style) it makes up for with plenty of substance — a mostly untouched flavor of Ice Cream Sandwich, a surprisingly strong spec sheet, and a great display make it a wallet-friendly dark horse that stacks up favorably to the carrier’s heavyweights. While an extra $100 will afford you a device that combines striking looks and some serious horsepower, the Atrix HD is an excellent choice for those who couldn’t care less about style.

Huawei has its sights set on the US market. The Chinese manufacturer aims to be within the United States’ top 5 mobile phone companies within the three years. In order to reach that goal the company needs some impressive hardware — and marketing. The Huawei Ascend D Quad is a fine entry into the smartphone race and now, with the MediaPad 10 FHD, Huawei has a legitimate tablet as well.

The MediaPad 10 FHD packs a punch. Under the 10.1-inch 1920 x 1200 IPS display rests a quad-core CPU and 16-core GPU, which the company promises will provide “Smooth Game Experience”. The MediaPad’s back houses an 8MP camera and the tablet measures in at just 8.8mm thick. To top it all off, the tablet will ship with an LTE radio. No word on cost or  availability just yet, but if priced right, this Android 4.0 tab could give the Galaxy Tab 10.1 and Asus Transformer line some serious competition.

The day my app (AutoCAD WS) crossed one million downloads on the App Store, the first question that crossed my mind was how did I ever end up doing marketing? I was a techy product manager and never imagined myself in marketing, until my app was in a life or death situation.

The startup I co-founded (which was later acquired by Autodesk) developed a CAD B2B app for engineers. After launching our product, we started marketing it by the book – crafting our positioning and working with a PR agency to approach bloggers. This didn’t work. We went at it a second and third time – tweaking our positioning and web site once again, adding more product features and writing to more bloggers. Didn’t work – again.

I gradually came to an understanding that when competing with hundreds of thousands of other apps for attention, marketing is not just another ingredient in an app’s success. It’s the main one. We were a small team with a very limited marketing budget, so we declared war the only way we knew how – as engineers and UX designers. The following months we left what we knew about traditional marketing behind and started exploring new and creative ways to reach new users, and like the engineers we were – measuring each step along the way, down to the last click. These days the product is celebrating 10M downloads worldwide with customers from dozens of Fortune 500 companies.

Here are some non-traditional tactics that helped us get there.

Making a Vertical App Horizontal (or in other words, making a boring app interesting)

Our product seemed to us like the most exciting app – changing the way engineers and designers work together. Sadly, not many writers shared our excitement.  We were classified by the press and media as a ‘niche’ app and were having a hard time getting coverage.

The first big marketing step for a vertical app to admit that it is one. Your killer aquarium manager, Classical music SongPop or wood chopping app won’t interest the average person, but to get to your vertical users you’ll have to use mainstream channels. We managed to get out of our ‘niche’ by working hard on creating funny, quirky and even touching content. Instead of trying to pitch our product and new features, we tried to make people laugh and feel something about it.

Here’s one example where we worked hard to make our app more interesting:  when launching our Android version we decided to use the one thing we knew Android users love best – Android. We created ‘Andy the Engineer’ as our mascot, and the video we created for the app showed an architectural version of Andy with plenty of ‘Andy’ jokes. That video got over 1M views, an amazing number considering we’re talking about a video for a CAD app. Those kinds of materials got us into the main Android blogs and got Android fans to tell their  designer friends about us.

Getting Customer Stories and Testimonials –  The Guerilla Way

From day one we heard beautiful stories about how users were using our app – from building theme parks to oil rigs. But every time we approached companies asking them to write their story –  Legal and ‘what’s in it for me’ got in the way. I decided that instead of contacting users I’ll try going the other way around and work with those who contacted us.

When receiving support requests over email from users coming from interesting companies, I actually picked up the phone and rang them. Yes, imagine sending your feedback and having the founder of the app call you 10 minutes later. After talking to users about their request and learning how they were using our app and how it helped them be more productive, I asked their permission to write about it.

In less than two weeks we had amazing stories about designing mines in Brazil, a new children’s hospital, musical theater hall and many more. Small tip: the sooner you call the more likely you are to get good cooperation. I had the “One hour” rule, calling users no later than an hour after receiving their email.

Create a Direct Channel to Your Users – You’ll Be Thankful During Your Next Cloud Outage

Every successful startup has its downtimes, broken versions and awful bugs, and that’s exactly when you’ll want to directly communicate with your users. Requesting users to sign-up using their email was one of the hardest product decisions I ever made. We lost about 10% of users during sign-up. It paid off though – we had one long downtime following a new release and another one when Amazon had an extended outage. At that point a lot of users don’t check your blog or twitter account, but instead go directly to the App Store – to rank your app with a one star. Using email and in-app messages we were able to share the problem with our users directly. Unexpectedly, not only were most users supportive, we even saw a pickup in usage after notifying users that everything was back to normal. Watching your 4.5/5 star rank you’ve worked so hard for sink in just a few days due to a tech problem is every app developer’s nightmare.

Turn On All Engines, We’re Going Global!

It doesn’t matter if it’s a free or paid app – when playing in the mobile arena it’s a numbers game. Every download counts, whether it’s coming from NY or from a village in China too small to be shown on Google Maps. Localizing the app was the first step, but the 2X increase we saw in our numbers came from localizing our marketing. We started by localizing every pixel of content on our app store page.

It’s not enough to translate the app description – we wanted a Russian user to see a screenshot with a Russian user name in it, a Brazilian user to see drawings in Portuguese and a Chinese user to see the app’s contact list with Chinese service email addresses. We worked on different marketing kits for each country – sending local bloggers a summary in their own language, images of the app relevant to their readers and full download numbers for their own country. Small tip : we stored each device’s language to send users newsletters in their own language.

[Some of the imagery used on our international campaigns – straightening the leaning tower of Pisa for our Italian launch and pulling out our app from a Matryoshka for our Russian version]

Marketing is all about telling your product’s story, and it’s difficult when that story is a bit more complicated than photo-sharing. Our app has always been an outsider – taking a 30 year old desktop product to mobile and into the cloud doesn’t make you the most popular kid at school (neither the mobile school nor the CAD one). We fought our own battle with what we felt was right for us and achieved the results we wanted.

With hundred of thousands more of these “outsider” apps finding their way  in the App store, I hope to see even more marketing wars fought in unique ways and with stories told in their own voices. And downloads, lots and lots of downloads.

To date, there have only been a handful of watch projects on Kickstarter, and of those, there really have only been a couple that grabbed my attention.  But here’s an interesting one that just popped up on PleaseFund.us, a new crowd-funding site that looks to be a direct Kickstarter competitor.

Terranaut Watch is bringing an oversized (50mm) watch to market, but one that they feel will “wear” signigicantly smaller, due to the lugs being hidden and the 13mm case. I’m not the biggest fan of watches over 46mm – but if their design choices work out, this could be an interesting one to keep an eye one.

The most interesting thing, however, is that they are crowdfunding the manufacture so you, the buyer, and pony up if you want the piece.

So, why crowdfund?  They’ve actually got some intriguing developments along with the watch that they’re shooting for.  First off, they want to create a carbon fiber case – which, if you ask me, is a pretty nice upgrade over plastic cases.  Second, they’re working to develop a glow-in-the-dark strap.

Not that the strap itself will glow in the dark, but that the stitching will.  I’m a sucker for anything that lights up a watch in the dark, so this is really intriguing.  Plus, this 26mm strap should be nicely padded, so it looks like it would be a comfortable one.

It’s a Citizen/Miyota movement, and has had some components painted to keep things looking nice on the inside of the case. They had initially considered a Swiss quartz movement, but of the two they tested, one broke, and the offered a horrible user experience.  

The watch itself looks to come in four variations including a choice of bezels (stainless or black) and dials (60 second or 24 hour layout). They’re looking for £3,500 and your pledge is refunded if it doesn’t fund. The piece costs £175.00.

There are also cheaper funding levels on their project page, so you can decide what level to get in on before it closes in August. You can also read up on their website, or follow them on Twitter.

Editor’s Note: The following is a guest post by “entrepreneur around the world” Amir Wald. In this post, Wald explores some of the challenges of managing a start-up in a country where disorder is an integral part of the way the country runs.

Correction: A previous version of this article incorrectly attributed Nir Eyal as the author. Again, the essay was written by Amir Wald.

“India is a woman”, so told us a young Indian a while ago in Goa. We were sitting in one of the countless restaurants scattered along the Goan beach and heard for the first time a phrasing of India in one sentence that actually explained something about it that we always had a hard time with. “You must understand, in India the female energy is the dominant one”.

At first, considering the level to which Indian women have to cover themselves in public and the prevalent focus on wedding and children, it sounded a bit peculiar to us. But the young woman went on to explain: “What I mean by feminine energy is… as in the west, in countries like Germany, everything works on masculine energy – order, reason, precision.

In India everything operates on feminine energy – feeling, flow. Everything is emotional not logical.” Putting aside the specific characterisation of what is feminine and what is masculine, that statement as it relates to India, just clicks right in. It is something that is very important to know, especially when you try to do something as logical as working, managing a business, from inside India.

Disorganized Order

At times is seems like nothing here works efficiently or even in a conceivable manner. If one boat takes you across the river, it will not take you back. A different boat takes you in the opposite direction. Public transportation will not arrive on time. Electricity will work when it feels like it. If it says that a road leads to one place, it does not contradict the fact that if you take it you will get to a completely different place. If a store is decorated with electronics equipment signs it doesn’t mean it is not a deli. And if they say that there is WiFi, it usually means that there isn’t WiFi just now, but maybe tomorrow. That’s why keeping a relatively continuous Internet connection in India becomes a journey in and of itself. In a business in which Internet access is the access to the business itself, it is a serious issue.

Sometimes I imagine that all the communication in India is done by scribbled-on paper notes sent in shabby auto-rickshaws across the Indian roads. Just every once in a while, for my sanity’s sake. It is hard to understand it otherwise. That is also why most answers from tourists, to any question you might ask here, will be: “It’s India”.

This giant sub-continent, comprised of many small states, is having difficulties with issues such as consistent cellular policy. Along the way we meet many people with small colourful collections of Sim cards from all possible cell-companies stashed in their wallets – six, eight, ten and up. Many people need so many Sim cards, because each Sim gets reception in a different and unexpected part of India.

Also because the operating of a Sim is a cumbersome and awkward feat that includes filling out all your personal details on a piece of paper that has to physically reach the company offices in god-knows-where. Often the paper is lost on the way or the company simply decides that your personal life info is not sufficient to allow you a cellular service and block it. It is not surprising that Colnect already has many Sim card collectors registered under the phone cards category. That is what happens when you combine feminine energy with good old fashioned British bureaucracy.

Welcome to Goa

We arrived at the beach laden Goa, to the quiet Ashvem Beach. We bought two new Sim cards, In addition to our previous one that was blocked, getting only Hinglish (Hindi+English) automated messages. Trying to operate the old Sim repeatedly led to the same pre-recorded customer service lady, that always answers in the bemused tone of a middle aged woman sitting at home with a glass of red wine.

She is very pleased to tell you – that the card no longer works. India is a long path, full of curves and turns. Sometimes a turn could be there purely for the humor of it, because it doesn’t lead anywhere. Like their infinite adorned gods, their endless elaborate myths, the incredibly detailed temple walls, everything is there for the beauty of it. And that is a point one must understand. Maybe there is a lesson there too – to do things for their own sake. But if there is a place you need to get to, you will encounter trouble.

Now we are sitting on the rooftop of the apartment in Ashvem. Goa in general and the area of Arambol beach in particular have been transforming into little Moscow for a while now. Russian tourists flock here in great numbers on every bathing season, every business on the nearby coast line is decorated with Cyrillic letters and the beach itself is mainly decorated with minimally  dressed Russian women in pseudo-hippie attire.

In Goa we chose to reside through Couchsurfing. To those who are unfamiliar with the concept, it is a website where travelers host in each others’ homes all over the world. This time it was with a group of young Russians that rented an apartment near the beach. A cheery but Russian-speaking-only bunch, which was joined by a few more guests: two French girls, a German guy and an (US of A) American guy.

The rooftop has WiFi. There might not be a cable connection in Goa but there is a wireless one. Work is flowing onwards. Bugs on Colnect are getting fixed while real life beetles and all kinds of other insects are lazily buzzing about. Below the building we can hear a roaming group of wild hogs calling out their mating calls while Frognector stares back at them. Between sunsets on the beach, which is very much like an extended coconut-palm filled version of the beach in Tel Aviv, is seems surreal to wonder about how things at home are, and what a community spread all over the globe of stamps and coins collectors will be needing right now. Nothing beats work in motion.

Image: Zubin Shroff

Despite some of the froth being blown off following the rocky Facebook IPO, it remains the case that talent and hiring are a big issue in the Valley. And you may not know this, but for a long time Europeans looked onward to the U.S. and thought to themselves, “Ha! We have plenty of room left for growth! And plenty of talented, educated people! Mwah ha ha ha !”

Ok, Ok, let’s leave aside that many of them wouldn’t themselves mind moving to the warm climes of Palo Alto and the rest… Instead, let’s concentrate on what actually happened next. What happened next was a good two, three of years of growth. And, we’ve seem the rise of some significant European originated companies such as Spotify, SoundCloud, Badoo, Fon, Moshi Monsters, Shazam, Wonga, Huddle … and the list goes on.

But the honeymoon is definitely over. In the last few weeks and months I’ve been hearing plenty of tales of woe from European entrepreneurs having real problems finding the people they need. It looks suspiciously like the hiring wars have hit Europe, as they have the Valley.

Admittedly, perhaps it’s a nice problem to have. It’s clear from signs like this that there are real businesses growing in real ways out there. And they need people, now. In other ways it shows there are systemic problems in the talent pool globally right now, as the world switches gears into a technology-powered future in its quest to escape the recession.

One very simple illustration of this trend came this week when London/U.S. startup Huddle performed a typically combative stunt (the company routinely pokes fun at Microsoft Sharepoint) by placing advertising billboards outside the London offices of Yammer.

Huddle went in all guns blazing, mocking the ability of Microsoft to incorporate the startup culture that built Yammer.

But Yammer’s team was having none of it. Yammer EMEA General Manager Georg Ell simply tweeted

“@Huddle Thank you but here’s what my team reckon to your proposal.”

Cue mocking picture:

These kinds of antics are not very new in Silicon Valley.

But let me tell you, when we are talking about startups, they are pretty much brand new for London, and for Europe.

While it’s all a nice illustration of the good-natured rivalry out there, its also symptomatic of the underlying problems startups are having.

As Greg Marsh, CEO and founder of OneFineStay told me, at a European Executive management level things really start to thin out: “There just aren’t enough capable and proven senior execs in Europe with Tier One experience in tech. It’s a very, very thin market in some functional domains.”

Joshua March, founder of London-based Conversocial agrees: “Hiring is a nightmare…however, the challenge for us now is in the sales side – turns out there aren’t a lot of high quality, hard working sales people with good SaaS experience in the UK / London. We’re really working on scaling our sales up but hiring really good salespeople fast enough is proving a big barrier in the UK.” That said he said it’s still possible to get developers.

“Salary is not too much of an issue I don’t think… there are just a lot fewer fully-funded start-ups here.” He also says he sees developers moving out of the big banks into startups.

Andrew Scott, currently working on a new stealth mode startup, says there is less a dearth of talent “but it is hard to justify the amounts those who know they are the best demand, especially when you’re bootstrapping or pre-Series A.”

Another issue of culture that was pointed out to us was options. European staff typically have little experience of dealing with the share options culture so common in the Valley.

Says Scott: “Many European developers/candidates are not seemingly able to comprehend the potential value of Share Options (even if generous). Or perhaps they are less unable to comprehend them and simply don’t believing in the ability of the options and the start-up to make them rich.”

“There are too few visible examples in Europe of exits doing this for people much beyond the founder(s),” says Scott, who plans to allocate a large chunk of the company to staff to try and break the hiring dam.

Tine Thygesen, founder of Everplaces in Copenhagen has a different view. She thinks plenty of people are looking for opportunities outside of the Valley: “We’re doing well getting people, we even get a fair amount of applications from the US and other countries, so we’re actually not experiencing this recruitment issue…”

It may be that Copenhagen has its merits over an anonymous office in Mountain View, or event off Market street. “We make a big deal out of being visible and talking about our how it is to work here,” she says from a sunny Copenhagen.

However, there is a different issue arising here: inflated salary expectations from other parts of Europe when trying to lure staff.

“The biggest issue we have encountered is that getting people in from eastern Europe is not working well anymore, neither fixed or on contract agreements,” says Thygesen.

“The salary expectations [in the East of Europe] are vastly exaggerated, so developers now expect more than our local developers… sometimes even in real terms. And certainly in terms of what you get in terms of output from them, comparatively speaking. I expect that the “good stories” of what the top devs get in Western Europe are travelling fast, so now new entrants to the game think they can get that kind of money.”

Once again, Europe is feeling the heat of both an external market pull (the U.S. and elsewhere) and internally between East and West.

Has the Berlin Hype Machine backfired?

And then there is Berlin.

As TechCrunch identified at least 4 years ago, Berlin was poised, in 2007/8, to become a fertile ground for startups, with a young, creative population, and few incumbent industries.

But the hype has escalated to such a point that you now find CEOs frustrated by the noise.

Indeed, it’s got to the point that the CEO of 6Wunderkinder was recently quoted as saying “Berlin needs less hype, more focus.”

Speaking with entrepreneurs there, one realizes that Berlin’s hype may be starting to backfire. While London has a huge population of 13 million people from where talent can often be drawn, Berlin’s 6 million population is putting strains on the hiring race.

As one senior startup executive there told me: “Berlin is tipping over. I know a startup founding CTO who was hired away to a new company after it got a funding round, and ended up on huge €180,000 salary. There are just too few people chasing too many highly funded jobs. A PHP dev with 2 years experience is getting a €100,000 starting salary. Another startup I know had three sales chiefs poached in 6 months by Rocket Internet.”

In fact it’s got so bad, he says, that “some startups are not talking anymore amongst each other.”

There are even tales of some companies moving away from Berlin to avoid the hype.

Another contact emailed us to say: “”One Startup moved their Dev people to Frankfurt! Now you don’t know Germany but Frankfurt is BAD … that is DESPERATE “

We’ll leave that for you to interpret. But suffice it to say, the recent launch of a new accelerator in Hamburg was accompanied by background briefings that suggested it was glad not to be inside the hiring wars of Berlin.

That said, Berlin continues to grow. Wooga, the social games company which is breathing down Zynga’s neck with at least three of the top ten games on Facebook, recently trumpeted the watermark of 200 employees from over 30 different nations now working there. Quite a contrast to its four employees of 2009, and a trajectory which was probably helped by Berlin’s increasingly international culture.

But, it’s clear from the significant number of voices across Europe that hiring issues remain the same. Few companies can get enough people. Few can get the right people. Everyone is looking for huge passion. And sometimes, things disappoint.

In many respects the issue comes down to solutions which are far beyond the reach of most startups. Namely, the immigration policies of the host nations. And it’s the most enlightened nations, realising where the next wave of growth might come from, that are meeting this call. Within Europe’s wide and pretty open Schengen agreement, that’s likely to stand in its favour. Outside of it, things get tougher.

The only questions that remain are these: Can Europe retain the talent? Can it ultimately meet the demand of its own startups before other countries lure away the best and the brightest? I guest we’re about to find out.

It’s not often in the mobile world that you hear of a split in standards development that doesn’t make you groan thinking of the complications that it will imply moving ahead (hello, Android!). But a new development for HTML5 will apparently do just that. The Web Hypertext Application Technology Working Group (WHATWG) and the World Wide Web Consortium (W3G), the two bodies working on HTML5, are parting ways with WHATWG taking charge of an evolving, “living standard” and W3C working on a more static “snapshot.” Some are already raising the issue of forking (“Overall this doesn’t seem to be a good development. It will no longer be possible to say exactly what HTML5 is,” writes developer Ian Elliot), but the head of WHATWG, Ian Hickson, told TechCrunch in an email exchange late last night:  ”We’re probably going to make a lot more rapid progress now.”

(Quick background: HTML5 is the web-based, non-native mobile web protocol championed by Facebook, Opera and other developers for the promise of developing apps and other mobile content that works across different operating systems without significant customization or special code work. It still has a long way to go, though, before it’s as functional as a native platform like iOS or Android.)

The news of the split was described earlier this week by Hickson in an open letter on W3C’s forums, where he notes that over the years, the two sides have already been working on different parts of the standards. That separation of duties has meant that the two sides have “slowly slightly forked”, and now that has been formalized into an administrative split: one person responsible for editing the W3C HTML5 Canvas and specifications (yet to be named), and another editing the WHATWG specification (that will be Hickson, whose email signature tagline is “Things that are impossible just take longer.”).

We contacted Hickson to answer a few questions about what this might mean for developers, and for us users in terms of getting an increasingly better experience out of HMTL5 web apps. This is an issue for companies like Facebook, which in April revealed it had twice as many users of its HTML5 apps as it did its native iOS and Android apps, but that these users were limited in what they could do because of Apple and Google’s slow progress on the standard.

An interesting thing Hickson pointed out to me was that there is value in what both sides are doing. His side will be looking to put in more functionality, while W3C will be looking to make this something that can be appropriated by the tech world on another level: in the case of patents and contracts. Here’s the Q&A we had late last night:

TC: Will this split set progress back, do you think?

Hickson: No, quite the contrary. We’re probably going to make a lot more rapid progress now, because we’ve essentially separated the research and development part of the effort (working on new features, describing how things got implemented, and so on) from the technical report snapshot process, so the two parts of the effort do not need to block each other. (For example, it’s hard to keep adding new features when you’re trying to freeze the spec’s feature set!)

TC: What will companies like Facebook and Opera have to do going foward (both have put a lot of effort into HTML5).

Hickson: Nothing has really changed for developers, browser vendors, and people sending feedback on the spec. In theory it should only really affect the people doing the spec editing work. Browser vendors will still have to decide whether to follow the specs, just as they always did. Developers will still need to check what the browser vendors actually implemented, as they always did. People sending feedback on the specs can continue sending them to the same places they sent their feedback before; for the WHATWG side I will continue to monitor the same places, and for the W3C side I assume they will do likewise.

TC: How does the living standard work filter back into what W3G will be doing setting the standard?

Hickson: Both specs are “standards” in their own way; the WHATWG spec is what we call a “living standard”, meaning it is what we recommend that browsers implement and is updated based on feedback to fix any problems that we found as we find them, while the W3C spec uses a more traditional draft-draft-draft-snapshot model where once a version is released it is frozen and errors are typically no longer corrected. There are important uses for both; obviously the “always updated” version is good for making sure implementors and Web authors are working to the most up to date knowledge, but the snapshot model is also important, in particular for things like patent licenses (so that the lawyers know exactly what is being licensed), and for contracts (so that lawyers can agree on whether something matches what was agreed or not without having to worry about us changing the document out from under them).

Hickson also noted to me that the W3C has yet to make clear how it will track changes on the WHATWG side although it started discussing this as far back as April (you can see the posts from an Apple engineer working on W3C here, and a Microsoft engineer here calling for a new editor) .

On his side, Hickson says he plans to keep a close eye on the HTML working group’s deliverables, and will be taking into account any work they do. “There’s no guarantee that everything that the W3C does will end up in the WHATWG spec; the higher priority is that the WHATWG spec represent what implementors, mainly browsers but also editors and validators, implement (or will implement). So obviously if the W3C spec says something that doesn’t match “reality” it won’t make its way into the WHATWG spec.” He points out that this “isn’t an entirely academic concern, but hopefully it’ll be rare.”

We’ve spoken with one developer to get his take on this and he concurs with Hickson that the main priority here is what browser leaders will do, although he also thinks that “separation rarely indicates things are going well.”

“To a large extent, on the ground this potentially doesn’t matter,” says Matt Baxter-Reynolds, an independent software development consultant based in London. “From the developer’s perspective the idea that there is an ‘HTML5 standard’ is something of a myth. There is no ‘standard’, because it’s under development. Seeing as there are only three browsers in the world that actually matter – Chrome, Firefox, and IE – it’s really down to how the vendors implement proposals which is the important part. Where those proposals come from – W3C or WHATWG – shouldn’t matter.

“Saying that, separating rarely indicates that things are going well. It suggests to me that WHATWG didn’t like the W3C working method and it appears WHATWG wants to play faster and looser with the methodology. One of my key concerns about web standards generally is that the vendors have commercial imperatives. That desire to follow commercial goals first, standards second, was balanced out with the strong methodology from W3C. With that methodology being sidelined I wonder if we’ll see more splitting of capability as commercial goals are prioritised rather than working towards a defined standard. And splitting of capability rarely serves the consumer.”

This seems to be the crux of the situation: navigating through the choppy waters of progress while making sure everyone stays on board.

We are reaching out to both Facebook and Opera, two of the bigger names that have put a lot of effort into developing content on HTML5, to get their take on the situation.

[Image: NCBrian on Flickr, HTML5 logo]

 Editor’s Note: This is a guest interview by Bernard Moon, co-founder & CEO of Vidquik, a web conferencing and sales solution platform.  He blogs at Silicon Moon.

I met entrepreneur Crick Waters last year after hearing just a portion of his story and his road toward Ribbit’s $105 million exit during an event in Silicon Valley. Soon afterward, I felt confident that I could learn from him and that his experiences building Ribbit would be valuable for Vidquik and our team.  I finally got a chance to interview Crick and hear his full story, so I thought I should share this with other entrepreneurs working to build world-class companies.

Bernard:  How did the idea for Ribbit start?

Crick:  Ribbit started out as IDP Communications in 2004, started doing business as Duality in 2005, and finally become Ribbit in 2006. It was mid-2004.  I had noticed that companies needed phone features for individual, company-specific, use cases that couldn’t easily be met with traditional telco infrastructure.  These features were inaccessible for three reasons:  they required purchase of racked equipment and telecom connections, were sold in bundles at very high per seat prices, and they could not be triggered or accessed via web services.

I realized that if the features of telephony services could be disaggregated, hosted as a cloud service, and be made accessible via web services; then these phone features would become “software” to developers making possible a whole new market of high-value applications.

The first application was conceived of late in 2004 around the idea of “never miss that [buyer’s] call.”  I put together a PowerPoint of the product idea, cold called several newspapers (this was, after all 2004 and people still used classifieds), and convinced the San Francisco Examiner to introduce “never miss the call” as a feature built into all of their classified online and offline ads. The Examiner would pay IDP Communications five dollars per ad.  They loved the idea and a contract was drafted up and sent to Philip Anschutz’s CFO in Denver for approval.

At the same time, Anschutz created a new national marketing VP position to oversee all the Examiner properties across the country.  I got a heads-up call from the consulting firm in Florida that was helping me with introductions in the newspaper and advertising industries warning me that the person who had been tapped for the job was old-school, unlikely to understand the technology, and would probably kill the deal.  Sure enough, he was and he did, and the two executives I had been working with at the SF Examiner both quit within weeks.

Bernard:  Wow. Horrible.

Crick:  It was pretty devastating, the loss of momentum was a definite setback.  Worsening the setback was that the co-founding CTO I had been working with, Bruce Young, got a killer job offer to go work for a company called LignUp.  The opportunity for him was really too great to turn down and though I understood and supported his choice, the double-whammy had me counting sheep logarithmically.  I was without customers and without a CTO.

Bruce, though, had introduced me to John Appler.  John had been helping me on business development with the Examiner.  John, in turn, introduced me to Ted Griggs, who was founder and CEO of a company called Syndeo, where John had previously worked.

Ted and his team had been funded by Redpoint and a consortium of cable industry companies to the tune of $98M.  Syndeo, at one point a 150-person company, had built and deployed a DOCSIS-based voice over IP soft switch for the cable industry.

Though Syndeo had developed award-winning technology and had international operating deployments, the market had moved on without affording Syndeo an exit. The company had trimmed down to its founding team and was looking for ways of leveraging its intellectual property with its remaining funds.

Syndeo’s technology was much more advanced than what I had anticipated having to work with to jumpstart IDP Communications, and the Examiner deal had left me free to pivot.  So when I was introduced to Syndeo, Ted and I were able to put our heads together over a potentially faster-bigger-stronger plan.  “Okay,” we thought, “let’s see if we can take the IDP Communications concepts and re-apply them with the more powerful soft switch rather than using Asterisk or LignUp (where Bruce Young was).

We spent nine months iterating on a whole set of ideas.  From April 2005 onward, we took a number of turns.  One of which was pursing an enterprise peering exchange for MCI, another was pursing a dual-mode phone strategy using intelligent call routing to seamlessly hand-off calls between mobile and fixed endpoints.  It was this idea that led us to file a dba form as “Duality” and IDP Communications became Duality Inc.

The Duality team eventually arrived at a revised business model and a product that we would call Mobi-Link.  Mobi-Link converged your cell phone number with your fixed-line number (we still had these in 2005) allowing calls to be made from and received with home or office phones, VoIP phones, instant messenger clients, and with any Internet browser.

Mobi-Link came with a networking platform, call diversion and re-direction features, a graphical UI, contact management, and a whole bunch of stuff that we take for granted in many applications today — but in 2005 were kind of radical.  In December of 2005, we started getting nibbles from the venture community.  Recurring interest.

Bernard:  You told me that you started fundraising in March of that year, and then you stopped at the end of the year?

Crick:  Right. We were working tirelessly at fundraising throughout 2005.  Toward the end of 2005, now a year since Ted and I had started talking to the finance community, we were still unfunded.  Fortunately, Ted was able to reign in some money by licensing a portion of Syndeo’s technology to another firm. Those licensing fees gave us the runway we needed to fund development of Mobi-Link.

Bernard:  Did that work?  Did you actually use this Mobi-Link beta product to attract funding or did you find funding through some other means?

Mobi-Link was a functional demo and was a very useful proof of capability and concept, but it wasn’t the driver behind our first funding.  We had never really released Mobi-Link into the wild.  Yes, we had a website up and one could register for the service, but we’d done no marketing or launch activity.  We were pretty much in private beta mode.  A few investors were following our progress, but none stepped up to the plate based on Mobi-Link.

It was social networking and serendipity that were the origins of Ribbit’s funding. Even serendipity has a path and the path to Ribbit’s first round of funding started when my son was a year old.  My wife made plans for our family of three to have breakfast with a friend of hers with whom she had worked at Excite @Home.  Her friend, who also had a one-year-old son, would be bringing her husband, Gilman Louie.

I asked, “Do I have to go?” and my wife said, “Yes, you have to go.”  Gillman, who was the CEO of In-Q-Tel (CIA’s venture capital arm) at the time, is rumored to have asked his wife the same “Do I have to go?” question.   Neither of us, apparently, saw the latent potential of the pancake breakfast.

We met at the Millbrae Pancake House sometime in late 2003 or early 2004 for an uneventful breakfast of one-year-olds and their parents.  It wasn’t until halfway through 2006 before the pancake potential started to play out.

In 2006, Gillman left In-Q-Tel and together with Stewart Alsop who left NEA, formed a new firm called Alsop-Louie Partners (ALP).  As the two of them were starting up ALP, Stewart, whom I didn’t know, blogged about how he couldn’t find a phone system that met the needs of small businesses.  Stewart had been with NEA.  He knew technology and he knew the Vonage guys.  So if he couldn’t figure out how to get a phone system that would work for him then he was a guy I needed to talk to.

So I wrote to Gillman reminding him of our pancake breakfast of two years prior and asked if he and Stewart would meet with me about Stewart’s blog.  Gilman and Stewart were game, so I set up a meeting at Gilman’s brand new office in Levi Plaza.  Ted was focused on code writing and asked, “Do I have to go?” I said, “Yes you have to go.  Even though this is a market research thing, who knows?  Maybe they’ll raise a round and fund us some day.”

So we drive up from Mountain View and snagged a clutch parking space right along Levi Plaza.   It’s all metered street parking up there with aggressive parking police driving around all the time.  So we waited until just before our meeting start time to go in so that the maximum one-hour of parking time would cover our hour with Stewart and Gilman.  We went in entirely focused on what Stewart saw as the problem needing to be solved in small office phone systems.  ALP, remember, had just formed and had no fund yet.  They barely had furniture back then.

So we interviewed Stewart and debated Vonage as an investment.  Before long, Stewart and Gilman turned the table on us – challenging us with “are you good entrepreneurs?”  They’re both smart, connected, and were pretty aggressive with us.  Even though they had no funds to invest, we told them what we were up to and showed them Mobile-Link.  A few minutes before the end of the hour, I started packing up since our parking meter was about to run out.  Getting a parking ticket wasn’t something I could go for – my second child had just been born and neither my wife nor I had an income – and since APL hadn’t yet any funds to invest…  So I thanked Stewart and started to make a polite exit.

Stewart said, “You can’t leave yet.

I’m like, “My meter’s running out – and you know how aggressive the parking police are here.  I’ve got to go.”

Stewart, reaching into his pocket and pulling out a handful of quarters said, “You can’t go yet.  Here.  Go put money in the meter, and come back.  We haven’t talked about the terms yet.”

“The terms?” I asked (politely laughing), “Don’t you need a fund first?”

He says, “Don’t worry about that, we’ll get a fund.”

True to his word, Stewart wrote up a term sheet for funding contingent on a partial close of ALP’s first fund. There were a lot of things that happened between then and funding, but in the end, Ribbit helped ALP close their first fund and ALP helped Ribbit by leading our series-A.

So it wasn’t until August 2006 that Ribbit was actually first funded.

Bernard:  August 2006?  So how long had it been?  When did you actually leave AT&T to go on this whole journey?

Crick: The end of 2004.

Bernard:  So it was a two-year journey until you got funded.  Were there hesitations to throw down the whole entrepreneur bag and just go corporate?

Crick:  Yeah.  I had a one-year-old at the time and my wife was pregnant – I was a working stiff like everyone else.  Even though I had always wanted to do my own thing, I agonized over whether to start Ribbit or not.  David Krantz was very helpful and introduced me to a fellow named Dennis Haar, who was then CEO of Go Digital.  I drove out to Go Digital and I met with him as a potential mentor.

It was Dennis that told me, “There are two good times to start a company. The first is when you’re young and have no family, you live off your family at home, and you can basically work twenty hours a day because you’re nineteen.  That’s a great time to start a company.  The second is when you’ve finished the corporate career path, you’ve got money in the bank, and your kids are grown and gone.  You can downsize your property and afford to basically give all your time and wisdom to a company.  Everything in between is a nightmare.”

Bernard: (Laughs)

Crick:  These words weigh heavily on you right?  They did me too.  I was in the nightmare phase of life (and still am for that matter!).  I wasn’t able to sleep for worrying about what I was going to do.  I kept thinking about what Dennis (and so many other wise folks advised) and agonized over whether to go for it or to pull the plug.

It was my wife that tipped the scale.  She is awesome.  She said, “You were miserable at AT&T.  It is not you, so I don’t quite understand what all this worry is.  You MAY NOT stay at AT&T.  Let me ask you a question. Let’s say we go through this, and things don’t go right.  What does it mean ‘they don’t go right?’”

I said, “Well, you know, you’re out of work, we have two babies, we’re paying for Cobra, we have a mortgage, and we have limited savings.  If things don’t go right, we’ll run out of savings.”

She said, “What happens if we run out of savings?”

I said, “Well, we basically sell the house, get the equity out of it and live off of that for a while in an apartment somewhere until I get a regular job.  We’d have no house and no savings.”

She said, “You mean like where we were three years ago?”

And I said, “Uh, yeah.”

And she said, “Well, that’s not so bad. I don’t know what you’re worried about.”

Bernard:  Really? That’s awesome! What a supportive wife.

Crick:  She said, “All I want to tell you is that I don’t want to be with you if you don’t do this because you’re not going to be happy unless you pursue your dream. The worst case scenario is not a bad scenario.”

Bernard:  Right.

Crick:  So that emboldened me, and I took the early exit from AT&T.  Of course there were endless follow-on periods of anxiety.  The turns and tumbles – like when the contract with the Examiner fell through and my CTO resigned.  Endless challenges.  What do I do?  How do I resolve that?  Where do I go for technology?  How do I find people?  And there was investor on every corner telling me my idea was stupid.  The good news is that it only takes one investor to like and fund your vision. (laughs)

Bernard:  That’s so true.

Bernard:  Okay.  So you got some money in 2006, you’re building your product, so what happens next?

Crick:  So we’re building what became Ribbit Mobile.  In February of ‘07, I realized that Salesforce.com was the perfect application for our solution.  So we built, between February and September of ‘07, Ribbit for Salesforce.com that we announced at Dreamforce 2007.  It was really exciting because we basically had a two-foot by two-foot pedestal in the farthest reaches of the Moscone center – at the back of everything.  I mean we were literally the third-to-last exhibit in the farthest corner.  We were tiny little guys, tiny little money, BUT we had a line at our table all day, all three days.  People loved it.  We actually won an unexpected app of the year award at the show.

In December 2007, we launched Ribbit.  We flew around the country briefing the press and on December 17^th, lifted the press embargo and pushed out our new web page.  Don Thorson did a great job for us – we were even in the Financial Times – and still, Ribbit Mobile had not been launched.  It was at DEMO 2008 on February 24^th or something like it that we exposed Ribbit Mobile.  There’s videotape of me on stage at DEMO.  I look really serious, like a Borg, with my headset on and eyes squinting in the lights.  It’s impossible to realize how hard it is to be relaxed on stage until you’re on stage and realize it’s impossible to be relaxed on stage (laughing).

Bernard:  I’ve seen it.  I was thinking Max Headroom.

Crick:  So now we’re going to start getting into how the company was sold.  Frist we need to roll the clock back and talk about how networking in 2004 led us to BT in 2008.

Bernard: Okay.

Crick:  While I was still at AT&T in 2004, I was invited to an industry networking event by a company called Light Reading.  Light Reading was a market research and publication firm.  They invited a bunch of people to a Light Reading golf tournament down in Half Moon Bay in 2004 – which I attended with an AT&T badge, and made good connections with the  Light Reading team.  In 2005, I was again invited, but this time I was unemployed with Duality Inc. and the event was in southern California – not a simple drive over to Half Moon Bay funded by AT&T, but a personal investment in airfare, rental car, and hotel accommodations.  This was a big commitment for me – and I struggled with the question of whether or not to go.  One thing that tipped my decision was following through on an introduction to Tom Marcin who was Global Director of Telecommunications at DuPont.  Tom had been supportive of Duality in many phone and e-mail conversations and would be attending the Light Reading event, so I decided to go to meet Tom in person and while making the most of the event.

The conference itself was good, though uneventful.  Afterward, some of us found ourselves together at the Santa Barbara airport waiting for our flights home.  Santa Barbara airport has a little bar upstairs and I went on up to find a boisterous, red-faced, Brit talking loudly and inviting me to join the table for a beer.  I sat down, introduced myself, and discovered him to be a technology scout, Rob Hull, working out of the Bay area for British Telecom.

I eventually told him what we were working on and that we’d been funded.  He took some notes and we went on about our businesses.  When we released Ribbit for Salesforce a year later in September of 2007, I thought of Rob and called him again to meet for a coffee – something like, “Hey, I want to show you this thing.  We’re going to need a distribution partner for Ribbit for Salesforce in Europe sometime and maybe BT would be a good partner.”  We didn’t talk about telephony APIs at all.

In the meantime, BT had started a skunk works project building telephony APIs.  By the time Ribbit announced its telephony API strategy at our coming out in December 2007, BT’s scouting team already knew about Ribbit, so this was only incremental news to them.  What really got BT’s attention was when the BT API team started meeting with potential customers.

Joe Black was the business development lead for BT’s API group.  As Joe described to me later, he would go to Salesforce, Oracle, and others to introduce BT’s API business.  When he did, these prospects would say things like, “Oh, you’re kind of like Ribbit.”  Joe was irritated to no end as you can imagine.  Who and what is this Ribbit thing?  So the BT API guys talked to their technology scouting team asking if they knew about Ribbit.  And of course Rob Hull did.

So Rob set up a meeting.  BT came to our offices, saw what we were doing, and grilled us.  They sent architects and product folks to our offices over a period of weeks.  We even met with the then CEO of BT Retail (now CEO of BT) and his direct reports – all of us thinking we were working toward a distribution agreement.  At the end of one meeting with the API team, BT said, “We are either going to buy you or partner with you.”  We thought, “Sure,” but didn’t believe that buying Ribbit was a BT-like thing to do.

We were wrong.  Sure enough, BT came through with an offer to buy us – I think it was March or early April of 2008 – so only a couple of months later.

Bernard:  Sounds like there were some difficult decisions to be made.

Crick:  Right. There were: to sell or to grow the business.  So now we do some math.  We had $11M invested on a post-money valuation of $30M with ~$6M in the bank when BT came to us with an offer.  We had no plans to sell the company.

British Telecom flew in to San Francisco and we met at the Starbucks in the lobby of the Westin St. Francis.  They offered us $50M.  The terms of the proposal were a little non-standard and amounted to essentially buying out the VCs and leaving the Ribbit team members as employees of BT with the potential of a bonus payout of some form, after three years, for those employees remaining.

Bernard: Amusing.

Crick:  The offer intent was heartfelt even though we knew that it wasn’t really going to work for our venture team. We also knew it wasn’t going to work for Ribbit employees who have a Silicon Valley view of employment and rewards.  We told BT this and they took our feedback back to the UK.  When we told our board that BT had made an offer to purchase us, the board wasn’t thrilled.  They were, in some ways, very angry that we’d even consider an offer of purchase since we’d just closed our B-round and were on a valuable track.  Expectations were rather high…

Bernard:  Wait. They were angry that you were even considering…?

Crick:  Yeah.  Put it into perspective.  They’d just funded us and we were doing all the right stuff.  From their perspective, we should be aiming for multi-hundred million or billion-dollar valuations.  But an offer is an offer. You have to entertain all offers.

We did some math on what I called the “buy it now” price.  In other words, what would be a minimally acceptable and expected return to a limited partner (LP)?  Typically an LP needs two and one half times their investment – minimum. With our recent $30M post-money close, that would mean $75M over our post-money value.  So a minimum acceptable valuation of $105M was the threshold exit given where we were.

Meanwhile, our board was like, “No you’re crazy. You’re going to be a billion dollar company, why would you do this?”  Ted Griggs managed all the stress of this sell-build dilemma.  There was high stress on all three sides of the conversation – BT, Ribbit, and VCs.  The only way this could work was if our board agreed to the buy-it-now price of $105M and BT met this price with an all-cash offer.  There could be no monkey-business in any quarter of the deal.

The economy, in the mean time, was going kind of wonky. So we talked to the board and said, “If BT comes back at a hundred and five, we think we should take the offer given what it would take us to attain that same outcome, on a dollar basis, with subsequent rounds of funding.”

Our B-round funds were only going to take us through the fall of 2008.  We knew that we needed to start raising a $20M C-round, including a global strategic investment partner, by the end of the year.  And even with a C-round, we would still have to overcome all the execution and market risk to build a company valuation at hundreds of millions of dollars – and then again find an exit opportunity.

So we told BT, okay, our buy-it-now price was one hundred five million dollars.  Al-noor Ramji, then CTO of BT Design, basically the second in command of BT, flew out with JP Rangaswami and met with me and Ted for a couple of hours up in San Francisco.  Al-noor interviewed us on a very personal level.  He wanted to know who we were; what drove us; what were our visions and personal passions.  In the end he said, “I’m authorized to offer up to one hundred million and I’m not going to play games.  I’m offering you the whole one hundred.  We can work out the terms together or you can go to lunch and write them yourselves.”

So Ted and I went for lunch to talk over our dilemma.  $100M was very close to $105 – but not $105.  We’d worked hard to get our board to agree to the $105 price and were uncomfortable considering something just 5% short of threshold from BT – a company with nearly $40B in annual revenue.  We had a long conversation and concluded that fundamentally, we couldn’t accept a one hundred million dollar offer because we, our venture partners, and our board, had been very clear that they didn’t want to sell the company and would only consider an offer meeting the hundred and five million dollar buy-it-now price.

After lunch, Ted and I went back and told Al-noor, “We really like BT, your vision, and we love the idea of being part of it, but we need a hundred and five.  If you get to a hundred and five, here are our deal terms.”  We went over our proposed terms.  Al-noor listened, said he was very disappointed, then got up, picked up his brief case, and walked out.

I thought, “Oh no this is terrible.”  Ted and I thought we’d blown it.  We were worried we’d left the wrong message somehow and as we drove back down the Peninsula, called Al-noor while he was still at the SF airport and reaffirmed our desire to work with BT, asked him to consider our request, and assured him and that we would talk to the board about his offer.”

Long story short, Al-noor was able to get BT to authorize the additional five million.  When he came back with an offer of $105M, we accepted. By May 10^th, we had accepted an offer and closed on July 29, 2008.

Bernard:  Okay. And this is a little bit more for the benefit of entrepreneur’s reading this… So the size of that deal did it warrant any financial advisers?

Crick:  Only as an insurance policy.  We were being approached by other suitors at the same time that BT was talking to us.  AT&T was literally in my office as the BT offer was being accepted.. At ten o’clock in the morning on this same day, we were going to sign the “no shop” agreement with BT.  So I’m looking at my watch as the meeting progressed with the AT&T guys knowing that we had about fifteen minutes before we were supposed to sign the no shop.  Of course, anything can happen – and there was still risk that the no shop wouldn’t be signed… so I waited out the hour.

Now the AT&T guy says, “So, we’re all set.  You’re going to come to San Antonio on June 6th to meet with Randall Stephenson (AT&T CEO), his Vice President of M&A, and a few other execs.  We’re either going to make an investment or buy you outright.  You’ll fly out on June 5th for the meeting.”  He senses my quiet and looks up at me for a response.  I’m not responding because I can’t.  The clock is ticking.  Only minutes to go.

And he said, “So you’re going to be there right?”

I said, “I can’t come.”

There’s just this pause, this huge pause.  He says, “I don’t think you understood me.  You have a meeting with Randall Stephenson and his executive team and they are either going to buy your company or make a huge investment in you.”

He pauses and I say, “I can’t go to San Antonio to meet with your team.”

Recognition and awareness fill his eyes.  He leans back on the legs of his chair and says, “No! Don’t tell me! (he was steaming) Don’t tell me it was the ‘G’ company!”

“All I can say, is that I can’t come meet with Randall and his team.”

Bernard: The “G” company?

Crick: Yeah, the “G” company was Google.  Because Google had been on a buying spree and previously bought what became Google Voice.

Bernard:  Grand Central.  I see.  And AT&T saw Google as a threat in 2008?

Crick:  Yeah.  There was enormous speculation in telecom that Google was going to enter the voice market and undercut the incumbents.  Ribbit’s API model was a piece that Google didn’t have and AT&T thought Google was going to buy us up.

Bernard:  Oh I see, interesting.

Crick:  So when you add up that we had just closed a B-round, were still well ahead of the value creation curve for Ribbit, had one or more telco’s as potential acquirers, and that our eye had to be taken off of the ball to entertain the offer from BT, our board wisely insisted we hire an investment banking firm.

Bernard:  Because you had so many people in play.

Crick:  Yes.  Because if something fell through with BT… You know if we were to set off one of the basic deal trip wires like failing to meet certain deadlines, not finishing due diligence on time, etc. we’d have already exposed ourselves and would have to act quickly on the momentum of the moment.  The investment bankers were brought in to pick up the ball and go into motion if the BT deal faltered.  If that happened, the “no shop” would be lifted and the I-bankers would be poised to shop the company.

Bernard:  You had them on retainer?

Crick:  Yeah. That’s how it worked.  We paid an up-front retainer for them to be prepared and ready for a deal falter.

Bernard:  And then they took what, five percent of the deal?

Crick:  No they weren’t part of the BT deal economics.

Bernard:  Really? They didn’t ask you for that?

Crick:  To be part of the BT deal?  No, because they weren’t involved with the BT deal in any way.  They were in waiting, sort of guarding the door.  They were basically back-up.  Part of our strategy with BT was to be open about having I-bankers in the wings: that we were ready to take this deal to the market if anything didn’t work.  The idea was to make sure all parties were focused on getting the deal done.

Bernard:  I see.  So if BT didn’t work then the I-bankers would…

Crick:  Yes, so effectively an insurance policy.

Bernard:  That’s great for fellow entrepreneurs to know.  Inspiring and insightful story, Crick.  Definitely appreciate your time.

Crick.  My pleasure Bernard.  I hope there are some nuggets here that help others as they create their own start-up stories.