Israel Lifts iPad Ban
Israel today lifted its ban on the iPad . After two weeks of banning the popular tablet computers, the Ministry of Communications is allowing them in and returning the confiscated tablets. Moses Kahlon, the Minister of Communications, announced the lift in a press release . The original decision to ban the iPad was made without the minister’s knowledge, inspiring a governmental squabblefest in Israel. Sponsor iPads were initially banned out of fear that the the tablet’s wireless would interact improperly with communications frequencies because they did not adhere to Israeli Wi-Fi standards. Technical tests carried out by both the ministry and an international lab proved that this was not so. The Ministry is allowing the importation of only one iPad per person.There is no information explaining this restriction in the press release. If there is no risk, it does not immediately make sense. Discuss
Startups Continue to Hit the Accelerator on Job Creation
Throughout the economic downtown of the last few years, which is only now slowly beginning to turn around, there have been few industries that continued to create jobs and support the economy. We’ve mentioned before (as many others have ) how the government should be doing its best to foster more entrepreneurship, one of the few areas continuing to create jobs, and Wednesday the National Venture Capital Association and StartUpHire.com job board released data supporting these suggestions. Sponsor According to a combined press release from the two organizations, StartupHire.com saw a 16% increase in job postings in the first quarter of 2010 from the end of 2009. The service says over 13,000 new jobs were posted in Q1 at an average of 4,400 per month, but is quick to note that its numbers represent only a fraction of the actual job creating in the industry. “As positive as our job numbers are trending, the aggregate venture-backed job growth is even greater – perhaps double what StartUpHire.com currently captures,” says Steve Fredrick, founder of StartUpHire.com. “It is critical that our government recognizes the power of these companies and support venture investment so that we can continue to build more companies and hire more Americans.” According to other studies referenced in the press release, public companies that were once venture-backed currently employ 12.1 million people, and current venture-backed companies employ roughly another half million people. NVCA president Mark Heesen believes startups and entrepreneurship are going to play a large role in the nation’s path toward financial prosperity. “The start-up company engine continues to churn, serving as a critical source of new jobs and opportunities for thousands of Americans,” says Heesen. “Our country’s entrepreneurial spirit combined with access to risk capital will continue to drive this economic recovery.” Unfortunately, legislation from Washington has been a little schizophrenic in terms of helping startups and entrepreneurship. While a Startup Visa bill that could increase the amount of foreign entrepreneurs creating jobs in America was introduced earlier this year, proposed financial regulations could hamper Angel investing and make it harder for companies to get funding. Hopefully further evidence, like that seen Wednesday from StartUpHire.com, will help to influence legislation to help promote entrepreneurship, and entrepreneurial education. Photo by Flickr user YtseJam Photography . Discuss
Is the Freemium Model (Still) Viable for Startups?
In an email to staff yesterday, new Ning CEO Jason Rosenthal wrote that “When I became CEO 30 days ago, I told you I would take a hard look at our business. This process has brought real clarity to what’s working, what’s not, and what we need to do now to make Ning a big success.” With that, he announced Ning would be abandoning its longstanding business model and discontinuing non-paying sites on its network. In light of this, is it time to reevaluate and reign in some of the excitement about the freemium model for startups? Sponsor Offering free services for a product alongside premium fees for advanced or special features – the freemium – has been touted as a promising business model for startups for several years now: “Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.” The Freemium Summit in San Francisco last month featured many companies who’ve been able to leverage the freemium model to great success, including Evernote , Pandora , and Dropbox . A recent New York Times article predicts Pandora could reach $100 million in revenue this year. Finding the balance between what to offer for free and what to charge for is not easy. The trick is to put enough in the free version to get traffic and usage, but not so much that there is no incentive to upgrade. Companies who use the freemium model need to integrate their free service or product into someone’s routine so fully (either by making sure it’s accessible on their computer and on their mobile phone, for example) that users reach the point where they feel they simply must pay. In yesterday’s press release , Ning noted that 75% of its users do pay for some sort of premium service. It may well be then that Ning’s announcements are less a reflection on the freemium model than on the company itself. Despite over $120 million in VC funding, Ning has been unable to develop a sustainable business. Yesterday’s announcement about the end to free Nings was accompanied with news that 40% of their staff would lose their jobs – an indication perhaps that the company’s overhead was simply too high. Nevertheless, the news may serve as a cautionary tale for those startups who think the freemium model guarantees success. As David Heinemeier Hansson wrote in a post on 37signals , “Eyeballs Still Don’t Pay the Bills.” It remains to be seen if Ning can pull through this reorganization and turn a profit, or if they will also serve as a lesson on what happens when a business that’s used the freemium model dumps all those “freeloaders.” Discuss
How to Burn Bridges with Bootup Labs and Other Investors
When Phoenix-based designer Jamie Martin’s blog post hit the front page of Hacker News earlier today, he realized what it’s like to burn bridges in a connected world. After his company Status.ly and three other startups were dropped from the Vancouver-based incubator’s program roster, Martin blogged about the unfortunate incident and put his site up for auction . While Martin at first claimed that Bootup Labs “had no money”, incubator cofounder Danny Robinson fired back with a reply. Sponsor Said Robinson, “This is not how it went down Jamie. After everything that we did for you and Steven, I’m shocked at how you have twisted the truth for PR reasons.” Robinson then went on to issue a press release on closing Bootup’s 2010 round and bringing on WMedia Ventures’ Boris Wertz as a board member and investor. In the past, Wertz has been a Bootup mentor alongside Sun Microsystems’ Timothy Bray, NowPublic’s Len Brody, Garage Technology Ventures’ Guy Kawasaki and Infectious Greed editor Paul Kedrosky. With a heavy hitting roster like this, it’s hard to believe that a startup might bite the hand that feeds it (or at least used to feed it). One of the biggest issues with Martin’s Hacker News submission was the fact that it was originally posted with the title “Moved to Canada to participate in a startup incubator that had no money.” The community outcry against this misleading title made YCombinator and Hacker News founder Paul Graham take note and change it to the exact wording of the original blog post. Now if TechStars , DreamIt Ventures , VentureHacks and LaunchBox would only weigh in, Martin’s post will have been seen by most seed-level investors in the country. The Lesson At this year’s SXSW, Paul Graham estimated that the YCombinator mafia might rival that of the PayPal mafia by the sheer number of incubator graduates in today’s tech companies. If this is true, then startup entrepreneurs should nurture the relationship they have with their investors even if it’s a tenuous one. While Martin’s post received widespread attention and responses from hiring companies looking to interview the designer, he’s definitely set the wrong tone to lure investors on upcoming passion projects. Before venting on a deal gone sour, consider the fact that you want every opportunity to close future deals without being labeled a liability. Discuss
How Entrepreneurs Can Make Better Use of Email
Investors get lots of emails. Jason Mendelson of Foundry Group wrote just this morning on how he wishes email were slower so he wouldn’t suffer from what he calls “Email Compulsive Disorder.” That being said, there are ways to write better messages when communicating with investors (or anyone who receives a lot of email daily) that will make the process simpler, quicker and will better your chances of hearing back from them. Sponsor Babak Nivi over at Venture Hacks wrote today on scheduling meetings with investors via email, and how he hopes the the back-and-forth can be simplified. Using dummy emails, Nivi shows that scheduling a meeting with busy, email-laden investors requires more to-the-point conversations; instead of vaguely proposing to meet “sometime next week,” be specific and outline your availability right now and in the near future. Nivi also suggests using services like Plancast to see if a potential investor will be in your area soon and use that to schedule a meetup. If not, get on the horn. Other ways to streamline this process include keeping your email short, but not colloquial (stay away from Internet abbreviations), and including some good news about your company that provides some context. These guidelines are great for entrepreneurs looking to communicate with investors, but the same rules can be used in other situations. To be honest, I am probably guilty of not being terribly specific when people want to chat with me on the phone; I let the email chatter go back and forth until a time is agreed on instead of asserting my availability. At the same time, startups and PR agencies could potentially learn some lessons from Nivi’s article when reaching out to media to share their story. Personally, I only like press releases when they accompany a short personal message. I get a lot of press releases sent to my inbox, but as 37signals ‘ Jason Fried and David Heinemeier Hansson said in their new book Rework , press releases are like spam to journalists. We get tons of them every day, so chances are simply sending a press release won’t get you as far as taking a different approach. The emails I respond to most frequently have a short personal message. I get a few emails each week that not only talk directly to me, but will also mention something else I have written about in the past. It may seem gimmicky, but I’m more likely to read an email from someone who understands the topics I cover. Sometimes when emails pile up, I may not respond to some messages I may have genuinely been interested in because they got lost in the deluge. Now and then I rediscover and older email when the sender pings me by sending another message under the same conversation. This lets me review their first message and reassess, plus it tells me they actually care enough to send a friendly reminder, and that I’m not just another writer on their email list. If you know you’re emailing someone whose inbox bulges each day, do them a favor and keep your emails short and to-the-point. When scheduling meetings, be specific, not vague; it helps to keep the volume of emails down, and is less stressful in the long run. Discuss