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It was announced Tuesday that email management startup SendGrid had raised $5 million in Series A financing from a handful of prominent investors, including Foundry Group , Highway 12 Ventures , Dave McClure , David Cohen and WordPress founder Matt Mullenweg . SendGrid, a graduate of last year's summer TechStars program, launched last fall and raised some seed funding from many of the same investors on its way to sending nearly 1.2 billion emails for its over 4,000 clients. Sponsor SendGrid is a cloud-based service that helps companies, big and small, manage automatic transactional emails sent to its users while also providing analytics and delivery assurance. A demo plan gives companies 200 free emails per month, and after that monthly prices range from $10 for 10,000 emails, to $800 for 500,000 emails, along with a few other premium features. More interestingly, the company managed a solid Series A round after strong customer development and acquisition without the blitz of marketing tactics we see from a lot of young startups. Sure it's important to spread the word about your product, but in other cases, letting your product speak for itself through customer referrals can play a large part of product growth. Ryan McIntyre of Foundry Group mentored Isaac Saldana, SendGrid's co-founder and CEO, during the TechStars program last summer and spearheaded Foundry Group's efforts to lead the investment round. Tuesday morning, McIntyre offered a look into the SendGrid investment , which he says fits with Foundry Group's theme of protocol investments. "As we observed SendGrid's rapid customer growth, which has occurred through word of mouth and without formal sales or marketing efforts, we made an offer to invest in SendGrid, and, thankfully, they accepted our offer to lead this round," writes McIntyre. Being a graduate of TechStars has been an obvious benefit to SendGrid. Dave McClure and David Cohen have participated in both the seed and Series A rounds of financing, and some of the programs other graduates ( SnapABug and Next Big Sound ) are users of the service. Other more prominent companies have started using the service as well, including Plancast , HootSuite , Get Satisfaction , SlideShare and Foursquare , all helping to spread the word about the service. Not only is SendGrid providing an excellent service that many startups could take advantage of, but they also serve as an example to other early-stage companies out there looking for funding. First, they are a shining example of the opportunities that come from participating in startup incubators like TechStars, as some of their investors and customers have come from the program. And secondly, SendGrid's focus on steady customer acquisition and development, instead of on viral marketing, is a valuable lesson. Last Friday we mentioned a book called The Referral Engine which helps companies focus their business strategies to drive customer referrals, and it seems SendGrid has done this well, growing their customer base without traditional marketing blasts. Discuss

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TechStars Grad SendGrid Collects $5M Series A Financing Round

Yesterday, Hitachi took the wraps off their Unified Computing Platform by introducing its open data center platform. It is aimed at consolidating the enterprise functions of networking, storage, and compute into an orchestration layer. Virtualization is still guiding the evolution of the data center, in this case all the way to the physical form. If you like consolidating your systems into big iron with lots blinking lights, Hitachi has you covered. And if you like open systems that connect to your existing infrastructure, Hitachi believes that playing nice with others is in the domain of unified computing. Sponsor If you're interested in this idea, check out the video summary of the platform . The company shares us a deeper view of this product line and the problems it is intending to solve. Many of the opportunities targeted address budgets, for example, how to remove operating expense through the orchestration of resources. Orchestration is the Huddle on Third Down Orchestration merges network, system, and storage resources as a single unit to be managed and reported in. An analogy might be found in football. In the huddle, the quarterback might call "the slant 6" and all eleven members of the team interpret that play and perform their respective jobs. Orchestration, as Hitachi describes it behaves in a similar way. It will respond to plays like "scale up for product launch". All the members of the team (disk, server, and network) go to their respective places and do the jobs needed. And, if needed, adjust appropriately to the conditions on the field. Hitachi leverages a partnership with Microsoft's System Management tools to closely align the plan and reality to bring more intelligence into the equation. The Computing Stack is the Team This product is also about abstracting systems through software. The company is betting that the coordination of the tasks of operating systems, storage and networking within a single framework provides a lot of value to the business. Hitachi takes the point of view that it is best to harmonize existing assets though open standards and looks at computing as a utility to be shared in the organization. Some of the features the product contains make it easier for organizations to achieve scale across functions and environments. It is designed to support this modern data center principles: Multi-tenancy Charge back for resources Distributed physical data centers Public cloud resources through open APIs Hitachi Unified Compute Platform looks like an impressive physical device. It brings together resources normally held in separate racks and hosts them in a single location and reduces a lot of the work of wiring up data centers. As we unfold another chapter in computing, Hitachi is leveraging its strength in consolidation to meet the trend of massive growth of data. At a glance, there are a lot of reasons why IT managers might choose unified computing products: cost, ease, agility. Looking out a few years, it is easy to imagine growth in this category overall. Is Hitachi well positioned for aggregation of data center resources with its Unified Computing products? How will EMC, Cisco, IBM, and HP fare in the movement towards unified computing? Photo credit: idovermani Discuss

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Hitachi's Unified Compute Platform Goes for the Endzone

"My background is in Artificial Intelligence and my last business was building predictive data. Most of our customers were oil companies, and you can hold that against me if you like. But my pitch back then was 'just give me enough data, I'll figure out something.' And often enough I did figure out something." That's how Houston-based 80Legs CEO Shion Deysarkar describes his background. Tonight his web-crawling-as-a-service company will put up for sale tens of millions of data points extracted from public social networks and other websites. He says it's only a matter of time until everyone's doing it and he wants to be one of the good guys. "You can figure something out from just about anything," he says. That's the kind of geek Shion Deysarkar is. Sponsor Starting at $350 per month, 80Legs customers can now purchase 10 to 20 million monthly user profiles from LinkedIn, MySpace and some other social networks. Facebook and Twitter are not included, but there are a variety of other data sets from places like retail websites available as well. I've bet Deysarkar a beer that LinkedIn isn't going to put up with this, but he says 80Legs has been crawling them extensively for quite a while and would have stopped them if they wanted to. We'll see. 80Legs launched at DEMO last fall and has been on our radar since last Spring. Its core product is crawling the web for a small fee - to index whatever its customers want. As Sarah Perez wrote in September : What 80Legs does is no easy feat. It provides its users a service which offers up 50,000 computers which can crawl up to 2 billion web pages per day. Yes, it's like having your own little search engine that you can rent for a small fee. How small? 80Legs is about 50% less expensive than any other competitive service out there. Tonight it's putting up for sale some pre-configured crawls, in hopes to reach a new market of people for whom the core service is too complicated. Either way, Shion Deysarkar may be a man from the future. We're watching closely the slow opening of aggregate social network user data for bulk analaysis and innovation. It's a hotly contested area. Here's what Deysarkar thinks about four of the biggest questions in this area today. On The Slap-Down of Nice Facebook Data Harvesters Academic and innovation-minded researchers are harvesting large quantities of public Facebook user profile data, only to be threatened by Facebook's legal department. Pete Warden is the best known example and one that Deysarkar called "a shame." The people using that data are not doing anything that's shady or wrong. They are trying to make new value on top of that data. In ways that Facebook or whoever is not doing. Facebook is in the business of bringing people to their site, they aren't leveraging that data for other things, and there is many things they'll never use data for. No harm is being done to Facebook. What would help them would be to become a data standard. As long as people are adding value then it's good. On Users Approving of Data Aggregation Say "aggregate user data analysis" and most people freak out - presuming it's a screaming privacy violation. Might that ever change? Deysarkar thinks so, perhaps too optimistically. "Going forward, the end user will hopefully understand that people are creating services that will benefit them. If I take a couple of actions and I see it benefits me that's hopeful. The challenge is that people have to understand that it came from aggregation. The more people that are making a case and building things around it, the better. "If you look at social networking, quite often connections are made in unintuitive ways. Obviously market researchers can take advantage of that, but it can also help people connect with that we couldn't otherwise. "At the end of the day, it's going to happen. Sites are going to fight it, but that data is going to become available. Wherever there is value to be had, people are going to go for that value." On the Black Market for Social Networking Data One of our arguements has been that Facebook and other networks should open up access to their public user data for aggregate analysis because the bad guys who want to do bad things with it already are, through the black market . Meanwhile, positive uses of data analysis are prohibited. Deysarkar confirms again that the black market is real. "Companies should want to work with us because we're above board. The black market definitely exists. We have heard about it from some of our potential customers, who have asked about things we wouldn't do. They just say, 'we can get it through other ways.' Things like wanting a crawler to log-in and get private data. It's too bad that exists." On the Still Infant Market for Good User Data 80Legs is cool. It's a crawler-as-a-service. Pete Warden, one of our Big Data favorites, uses and endorses it. But it's also a little complicated, especially because it's like selling potential . It sells data that you then have to derive value from, it doesn't deliver value directly in ways people are familiar with. The Economist's Special Report on Big Data last month argued that data was a key new form of economic input, on par with land, labor and capital. Deysarkar says he agrees with that, "it is definitely a unit of value," but also admits that too few people get it yet. "We do have customers who are using 80legs the way we intended, we have a decent set of customers. But we know that there is a whole other set of customers who are intimidated because it is a bit technical now. These pre-configured crawls we're now selling still fit into the big picture, but the whole data market is not well defined. There isn't a rich enough ecosystem of companies using the data, that's the market we'd like to serve, but it's still being formed right now." What do you think? Is 80Legs just a little ahead of its time? A lot? Totally crazy and wrong? We would love for you to share your thoughts on these matters in comments below. Discuss

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Thoughts From the Man Who Would Sell The World, Nicely

Last week when it was reported that Foursquare was considering a sale to Yahoo , there were a flurry of posts with analysis and advice on whether or not Foursquare founders should sell or not , and if they would be wise to sell to Yahoo or not . The debate about the future of Foursquare and questions about the potential profitability of location-based social networking aside, the buzz about Foursquare and Yahoo should serve as a reminder to startups about the importance of having an exit strategy. Sponsor Even if you have founded your dream company and can't imagine doing anything else, having an exit strategy established will help you make good business decisions. Knowing how and when you plan to exit - whether it's "soon" or "at retirement" - can help you shape the direction for your company's growth. Furthermore, most outside investors will want to know your exit strategy plans so they can anticipate how and when they can realize a return on their investment. The most common exit strategies are: Initial Public Offering (IPO) Merger & Acquisition (M&A) Selling to another individual Liquidating and closing While the idea of an exit strategy might sound negative, crafting one can help you plan how to make the most out of a good situation, not simply escape a bad one. But as the comments on the TechCrunch post on the potential Foursquare sale indicate, there is little consensus on what constitutes "a good situation," good timing, or a good exit strategy. Some may frown on all this emphasis placed on exit strategies, arguing that you'll never build an empire by always having an eye out for the exit. But whether you want to quickly move on to pursue your next great startup idea or whether you stay with a business for the long-term, it is important to think about your next steps and to have a succession plan - for you and for your business. As bplans.com founder Tim Berry notes , "every entrepreneur eventually needs an exit." . Discuss

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Got an Exit Strategy? Lessons From Foursquare and Yahoo

Building strong networks and developing meaningful relationships are cornerstones to business success. Although it may be a cliche, "who you know" can be incredibly important for startups. With the growth of social networking sites, it seems easier than ever to develop a sizable network of connections: Facebook friends, Twitter followers, your Google social circle, your LinkedIn connections. But having a large social media network means little if you do not maintain these connections. It is important continue to meet new people, cultivate existing relationships and to emphasize the quantity rather than the quality of your connections. Sponsor Last week, in a post on the blog Journalistics, Jeremy Porter wrote, "Too many people think networking is about collecting business cards - whether actual or virtual - in an effort to demonstrate how many people they 'know'." Porter listed tips on how to strengthen your network. Here are some things, based on some of his suggestions, to consider as you expand your network: Establish goals: What are the types of people you want to build relationships with? For example, do you need to meet journalists or venture capitalists? Set goals and deadlines for reaching out to make some of these connections. Keep score: If you set goals, track your progress. If you aren't meeting the people you want and/or building your network how you want, revise your strategy. Make the most of face-to-face opportunities: Some events, such as conferences, are geared towards networking. Make an effort not only to attend these sorts of events but to maximize the networking opportunities there. Have a good opener: As we noted with our tips for crafting your elevator pitch, you need a hook. When you introduce yourself, you should be able to answer the "What do you do?" question consistently and memorably. Here's my card: It might seem obvious or even outdated, but do not undervalue the importance of the business card - whether electronic or paper. While social networking does make it easy to locate people, having a business card is an invitation for a follow-up. Follow up: It's easy to toss business cards in a drawer where they're never to be seen again. Follow up a first meeting with an email or phone call within 48 hours. If you skip this step, you might as well toss the cards. Stay in touch: Don't let your relationships die off. Keep in touch with people. Porter writes, "Some job hunters I met back in the late 90s are now directors at big brands. When you keep in touch with contacts over the long haul, you'll be surprised how many interesting connections you'll have down the road. You'll quickly become one of those people that knows somebody that 'does that' or "works there." Of course, you want to stay in touch with people so they'll remember you too. People forget who you are and what you do - you have to remind them regularly if you want to get value from your network." Share: Give value to your participation in a network and make it so that people value your connection. If you come across interesting information, share it. If somebody asks for help, offer it. Porter says, "Don't miss the opportunity to pay it forward, you'll feel great and will find people often reciprocate." Look in the mirror: Regular self-assessment is good. Ask yourself if you are both gaining from and contributing to your network. Reciprocity is important. Build relationships when you don't need them: It's a mistake to only network when you need something (such as financing, a new job, a new team member). Be an active part of your network before you make your pitch to it. Start with one new connection today: Meeting new people and building your network might be one of the most important investments - personally and professionally - you can make. Discuss

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Tips for Networking (Beyond Just "Social Networking")