Venture capital has always been geographically concentrated, resulting in the emergence of a few hubs of VC and entrepreneurial activity and support services — Silicon Valley being the best example.

But the majority of US entrepreneurs have not been able to benefit from the venture capital industry because they live in the wrong parts of the US. This wasn’t an issue in the early days, when VC was novel. But over time, this geographic concentration has become a limitation.

Let’s put some numbers to this: In 2010 (the most recent full year the National Venture Capital Association provides numbers for), the VC industry invested $3,945 per person living in the Silicon Valley area compared to $43 per person in the rest of the US, including the other VC hubs like Boston and New York.  That’s a 91:1 ratio.

Go to Michigan and the amount is $15 per person per year. Now we’re talking 263:1. If I was a gambling man, I wouldn’t bet on a startup in Detroit getting venture funding. Better to relocate the family to a VC hub.  Or find another option.

Millions of talented entrepreneurs live in the “wrong parts” of the US, where they have very little chance of getting venture capital.  A few hundred (or thousand) of them just might have the spark to cause inspired innovation and bring employment to thousands, perhaps millions.

The argument has been that entrepreneurs also need expert advice and resources to excel and that it must all be local.  I agree that mentoring, support, and resources in addition to capital are vital. I just don’t buy the local part. What portion of the communication between a VC and his or her portfolio companies was done in person 50 years ago? And what portion of the same communication is now delivered through the Internet?  Email, video conference calls, remote screen sharing, group document editing, and other technologies have all changed the way we collaborate.

The truth is that a mentor can add a lot of value in assisting an entrepreneur anywhere in the US, or worldwide for that matter.

The Internet has shown itself to be very good at providing the platform on which formerly local services can be provided virtually anywhere.  eBay did this with auctions, Amazon with books, and Facebook with friendship.

Crowdfunding for entrepreneurs has the potential to deliver capital, mentoring, and resources virtually anywhere. The opportunity is large:

The US VC industry ranges from $20 to $30 billion of invested capital per annum, according to the NVCA, and it’s concentrated where most entrepreneurs are not. Imagine if we take the $43 per person of VC invested per year outside Silicon Valley and double it to $86 by bringing the capital and mentoring and resources to entrepreneurs across the US. If that were done, the amount of new capital deployed would be $13 billion per year.

That amount of money can fund an additional 6,500 startups per year at the $2 million level.

Crowdfunding can be an $8 billion to $100 billion industry in six years. This will not come at the expense of the current VC industry; it will complement and extend its reach.

This is market expansion, and it will redefine venture capital to break out of its historic limitations. At least for entrepreneurs who  live in the wrong place, which is most of us.

Rod Turner is a serial entrepreneur who has played a key role in building Ashton Tate (dBASE), Symantec Norton, Knowledge Adventure, Mobile Automation, and ArtSlant. He has two IPOs under his belt and has sold three startups to public companies. He is now focused on the launch of his newest initiative, crowdfunding site START.ac.

Editor’s note: This is the first in a series of VentureBeat columns by award-winning author and serial entrepreneur Penelope Trunk. She’s going to be our startup critic: She’ll review new companies, point out what they’re doing right, and give them advice (which she’s never shy about anyway) for how they can improve. Her first company is Browsemob.

Browsemob is a site that lets you tell a retailer what you’d be willing to pay for an item they sell.

If you go to Browsemob’s site, the first thing you see is a photo of a woman who looks excited in a touching-herself way.

So look, this is the first sign that there is no one on the management team who knows about marketing. Because in any book about body language, a woman touching herself means, “I want you.”

The “I want you” picture, together with the name Browsemob, makes the site look like it’s a matching site for hot women and the unruly mobs of boys who want to hire those women for something that will turn out badly, like a Duke lacrosse party.

It’s just not good.

But I give the site the benefit of doubt, because it’s about the customer setting the price. I like this because I do tons of coaching and I’m always trying to figure out the right price. I charge $250 for an hour and I get annoyed when I am coaching a millionaire, because I think I should have added a few more zeros. But I also feel bad when I price myself too high for struggling college students. Those are fun people to coach. I am excited for Browsemob to show me how to price my own services.

The problem is that Browsemob is about economics. The founders have identified an inefficiency in the marketplace: There are, I don’t know, ten days when a retailer knows they will discount a product but they have not yet done so. During that window, there is a possibility to sell the product at a smaller discount.

There is a lot of math involved in figuring out this inefficiency and optimizing it. But the bottom line is that there is a ton of inefficiency in the world that is not worth confronting, and this is unfortunately an example.

Matt Hurewitz, a founder of Browsemob, is really nice. He lets me cut him off four hundred times. Every time he tells me about the economics I tell him that I’m sure the economics are right. I’m sold. No one is solving the problem he’s talking about and he can solve it. I got it.

I want to know: Can he get any large retailer to care enough about this market inefficiency enough to sign up for his site?

No. The answer is no. He only has this beauty product company that is masquerading as a sex shop on his home page.  This will not propel his company to success.

You need a big retailer to succeed, I tell him.

He says he knows.

I say, no retailer will care enough about the problem you are proposing to solve. What did the Gap say?

He says that the Gap said that integration with Browsemob would need to be very sophisticated and…

Wait. What?

He repeats the word “sophisticated,” and I repeat to him that there is no way anyone is going to take the time to make changes in their discounting system in order to save a minuscule amount of money for their company.

This is how our conversation goes: I am obnoxious and impatient. He is nice and sweet. This reminds me that math guys are not good at pitching companies, but they are very good for dating. They are patient and honest. Good qualities. But I digress, and anyway, if you are wondering, he’s married. So we are back to the company.

The code is already written. A lot of it. I want to tell you something: Don’t do this. Don’t write code before you know what you’re going to use it for. This company is a perfect example.

Obviously there is a market inefficiency in discounting systems. There is money left on the table. It’s up to Matt to show that companies actually care that he can solve this problem.

So, before he writes all the code to solve the problem, he should go to a company and get them to sign up. He can give them a demo that sort of works but only takes about ten minutes to code, in HTML. The prospective customer won’t care, because they are making a business decision, not a coding decision. Once he has got a company signed up, then he can start coding to solve the real customer’s real problem.

You need to look at your startup idea. If the hardest part of the business is showing that the code can work, then you need to write the code first. For instance, if you are trying to allow ten billion people to tweet simultaneously, you’re not going to get very far unless you have already written code that makes that possible. But in most cases, people believe you can write the code and the hardest part of the business is something else. Do that hardest thing first, before you spend time writing the code.

In this case, Matt should cut a deal. Get a company to sign a letter of intent to use the software to unload almost-on-sale items. Then he has reason to believe it’s worth building the software.

Another thing: Don’t pitch for news coverage if you can’t use it. Save PR for when you need more customers or when you need investors. Right now, all Browsemob needs is someone from a large retailer who cares about the problem they are solving. What it needs is to close a sale.

Matt did say something interesting, though. He said he got the idea for this company from his friend who asks for a discount everywhere. He said his friend gets discounts almost every time, at least a few dollars, from stores of all sizes

I say the friend is totally annoying.

Matt says he knows. But maybe this site can give everyone the ability to ask for those discounts without being annoying. 

That’s a good vision: It’s fun, and it promises something good in the end. I don’t think he’s really on the right path yet, but really, all startups are about pivots, so in case he pivots to the point where you can haggle with impunity, you can sign up here:  www.browsemob.com/signup.

Penelope Trunk founded Brazen Careerist and two other startups. Her career advice runs in 200 newspapers, and she is the author of a bestselling career advice book. She lives on a farm in Wisconsin and homeschools her sons.

Nurse thumbnail image via ShutterStock

The brains behind Lenddo, co-founders Jeff Stewart and Richard Eldridge and chief scientist Dr. Naveen Agnihotri, think a person’s social graph can be a better indicator of trustworthiness than a credit score. Anyone who’s ever tried to get a loan or credit card without prior credit knows it’s a circular problem, one that is infinitely more difficult in emerging economies. Lenddo helps individuals in these countries break out of the cycle with small loans up to one month’s pay.

The company takes the wealth of data from your many social networks (including Facebook, LinkedIn, Twitter), looks at the people in your Lenddo Trusted Network (family, friends, co-workers), verifies you have a full-time job, and uses predictive algorithms to confirm your identity and calculate if you are a risk. There are three types of algorithms it uses: Bayesian (pattern matching), validators (verifying your identity and the information you’ve given), homophily (you’re likely to associate with people similar to you).

“It turns out, who is willing to endorse you is a powerful indicator of your trustworthiness,” a Lendoo spokesperson told us in an email. “As more people pay back, the network grows, and the borrowing capacity of the community grows.”

Currently, Lenddo only offers loans in the Philippines and Colombia, though it has tens of thousands of members in over 35 countries. The company won’t say how many loans or how much cash it has given out to date, but the average loan is $400 the Philippines and near $800 in Columbia, and the total amount is growing at close to one percent a day. The loans are most frequently used for education, but can also be put towards health care or repairs after a natural disaster, such as the recent devastating floods in the Philippines.

The company plans to use this $8 million round of funding to hire more engineers, ramp up growth, and eventually expand into other emerging markets, a process it says will be driven by its members.

Started in early 2011, Lenddo has employees in Manila, Bogotá, and New York City. Accel Partners, Blumberg Capital, Omidyar Network, iNovia Capital and Metamorphic Ventures participated in this round of funding, as did angel investors Geoff Judge, David Kidder, Scott Heiferman, and Barry Silbert.

The Russian market is growing at a supersonic rate and provides excellent exit opportunites for investors in Russian online ventures to create a brand-new breed of Russian internet entrepreneur.

So who are the trailblazers to watch in this new web frontier? Yankov Sadchikov, Russian startup blogger at Quintura.com, talks us through the hottest Russian entrepreneurs to watch right now…

Oskar Hartmann, founder and CEO, KupiVIP.ru

After launching online shopping club KupiVIP.ru in fall 2008, the Russian-German Oskar Hartmann added an e-commerce platform for Russian retailers and launched online fashion store ShopTime.

In Russian online shopping, KupiVIP is growing bigger than established brand OZON.ru by racking $200 million revenues last year. In 2010, Hartmann partnered with the French businessman Pascal Clément to set up a Moscow-based internet business incubator, Fast Lane Ventures, which has already started eighteen internet businesses to date, of which two were already exited.

Marina Kolesnik, founder and CEO, Oktogo.ru

Following a consulting career at McKinsey and management role at DataArt, where she headed complex software development projects, Marina Kolesnik has leveraged her Harvard MBA to launch her own online venture Oktogo.ru two years ago. Since then, Marina raised $15 million in venture capital from European and Russian investors to make Oktogo.ru into Russia’s leading online hotel booking and travel site or “Booking.com of Russia”.

Pavel Cherkashin, co-founder, Krible and Kuznech

Having been Russian manager for Adobe and Siebel as well as Microsoft Russia’s general manager of consumer and online businesses, Pavel Cherkashin made a number of angel investments in online businesses in Russia. He now works for his investee companies: online customer support service Krible and image search Kuznech as well as helping other investees: online video site Tvigle.ru and mobile advertising network AdWired.

Alisa Chumachenko, founder and CEO, Game Insight

In online gaming, marketing is key. The former head of marketing at Astrum Online, which was merged into Mail.ru Group in 2008, Chumachenko started her own  social game publisher and developer Game Insight in late 2009. In 2011, she moved into mobile gaming to make Game Insight one of the leading gaming companies on Android.

Albert Popkov, founder, Sravni.ru

Popkov capitalised on the social networking boom in Russia. Back in 2006, he launched the social network company Odnoklassniki.ru. He then raised funding from DST and sold his startup to it later. Odnoklassniki, which is part of Mail.ru Group, has some 25 million monthly users. In 2009, Albert launched consumer banking comparison site Sravni.ru, which is now the leader in its category.

Yulia Mitrovich, Entrepreneur in Residence, Svyaznoy Group

A graduate of the University of British Columbia, Mitrovich was a McKinsey consultant before going to Web Media Group in Moscow to head its online video site Zoomby.ru.

In 2012 Mitrovich joined Svyaznoy Group, the leading mobile phone retailer in Russia, as Entrepreneur in Residence. No surprise, Svyaznoy founder Maxim Nogotkov was named Russia’s Entrepreneur of The Year 2010 by Ernst & Young.

Igor Matsanyuk, founder, IMI.VC

If the internet incubators are the new black, then mobile-focused business accelerators are the new, new black. Entrepreneur-turned-VC Matsanyuk has made a fortune by cashing out shares in Mail.ru Group during its IPO in late 2010.

One year before, he merged his online gaming company Astrum Online Entertainment into Mail.ru. Igor currently seeds mobile startups viaFarminers business incubator and own investment company IMI.VC.

Elena Masolova, co-founder and CEO, Pixonic

The Higher School of Economics graduate, Masolova co-founded the AddVenture seed-stage fund in Moscow in 2008 and was a founding member of coupon site Darberry, which became Groupon Russia. She currently heads social gaming company Pixonic, a portfolio company of AddVenture. She also eager to make angel investments in online startups and lead them later.

Anna Znamenskaya, founder, Workingmama

Following a ten-year executive career including CEO of Digital Access (online video portal ivi.ru), Rambler‘s commercial director and B2B Media CEO, Znamenskaya has ventured into entrepreneurship with her own online project for mothers, Workingmama.ru in late 2011. She is also receiving Master in Digital Marketing from Instituto de Empresa in Madrid this year.

Olga Steidl, partner, dots’n‘spaces

The St. Petersburg State University graduate Steidl has headed marketing at mobile software maker SPB Software before it was acquired by Yandex last November. After a short stint withYandex, she has settled in Zurich to help mobile startups via dots’n’spaces and organize mobile industry events. Steidl is also startup CEO herself and mentor at Seedcamp where Yandex recently invested.

FURTHER READING

• The Top 10 Russian Internet Startups
• Exclusive interview with Marina Kolesnik

This article originally appeared on Venture Village, one of VentureBeat’s editorial partners.

Outsource, outsource, outsource

Everything may be a priority, but you are not equally brilliant at everything. Eliminate the unnecessary tasks and outsource your weaknesses so your time and focus is directed to where you’ll make the biggest impact for the business.

Kelly Azevedo, @krazevedo, She’s Got Systems

Focus on one thing at a time

It may seem like a no-brainer, but multitasking can actually cut back on your productivity. Instead of juggling multiple projects at once, schedule out blocks of time — or even entire days — during which you only focus on one task or one project.

Steph Auteri, @stephauteri, Word Nerd Pro

Take on what’s time-sensitive

Do time-sensitive tasks, then divide into projects. Look at all of your to-dos and first identify which ones are time-sensitive — the ones that need to be done that day or that week. Do those tasks at the start of each day, then pick one big project per day to tackle once the time-sensitive items are done.

Stephanie Kaplan, @stephaniekaplan, Her Campus Media

Figure out your prime time

Identify when you are the most productive and focus on the tasks that are the highest priority to complete during that time. To do so, eliminate distractions — such as calls and email — and instead use the time you are at your mental best to accomplish your most important tasks.

Doug Bend, @DougBend, The Law Office of Doug Bend

Get an outside perspective

It’s easy to get overwhelmed and too emotionally involved in everything that is happening to make clear decisions. Engage someone else — such as a business partner, mentor, coach or friend — to help ask you the right questions and sort out what’s really most important now. An outside perspective can open you up to new possibilities.

Elizabeth Saunders, @RealLifeE, Real Life E

Go into bunker mode

In the event that you find your plate filled with all high-priority tasks, you must remove all external distractions. This includes other people, emails, phone calls, and all social media sites. Now that it’s just you and your work, focus all of your energy on one task at a time until it’s complete, and then move on to the next one. Once all priorities are cleared, you may rejoin society!

Anthony Saladino, @cabinetkings, Kitchen Cabinet Kings

Don’t dwell

You’ll never get everything done, so don’t dwell on it. Split your time between what’s urgent and what’s important. If you handle all the things that pop up as soon as they come to you, you’ll never move forward as a business. Make an even split between handling urgent issues and working on long-term solutions. As you grow, you can hire people to handle more urgent matters.

Nick Friedman, @NickFriedman1, College Hunks Hauling Junk

Not everything is a priority

It’s important to stay focused on what really matters. Spend some time on upfront planning to determine the most critical tasks that you need to take on. It’s usually much better to concentrate on one or two priorities and do them really well, instead of being spread so thin that you have mediocre output.

Ben Rubenstein, @yodle, Yodle

Break out the rankings

Written lists are still my best tool for productivity. When I feel like I have too much on my plate, I do a brain dump, then I give each item a numbered ranking based on priority. If I owe deliverables to others, I make sure to ask them when they need them by so that I can rank them appropriately.

Allie Siarto, @allieo, Loudpixel

Define roles and divide work

Make sure everyone on the team has distinct roles defined, and divide work accordingly. Everyone on a proactive team will want to do everything, and clearly defined roles make it clear who should do what.

David Gardner, @david_gardner, ColorJar

There’s a tool for that

Pivotal Tracker is a free tool that allows you to track task lists. It forces you to prioritize your to-do list. If you keep the list current, you will always know what the next most important task is.

Aaron Schwartz, @ModifyWatches, Modify Watches

The Young Entrepreneur Council (YEC), an invite-only nonprofit organization composed of the world’s most promising young entrepreneurs. The YEC promotes entrepreneurship as a solution to unemployment and underemployment and provides entrepreneurs with access to tools, mentorship, and resources that support each stage of their business’s development and growth.

Overworked man image via ShutterStock

Starting a new technology company is exciting. Since the founders have their energies fully focused on new technologies and innovations that promise to change the world, there is little time left for them to think about creating the right culture for the company. Hence, more often than not, the company’s culture takes after the styles and personalities of the founders. (Above, CollegeHumor’s startup guys.)

While there is nothing wrong with that, it can be a limiting factor in the growth of the company, especially if the company succeeds and starts to grow out of the initial startup phase, and begins its journey toward an established company. Because the culture influences the type of talent the company attracts, if the culture is set in a limiting way, the company struggles to get the diverse talent outside of its core group that it needs to function as an established business.

For example, many times companies started by young males in their 20’s take on their personality, and the culture is defined by a highly informal shorts and sandals dress code. Typically, work hours are anything but nine-to-five and include frequent visits to local watering holes.

While it is a very comfortable setting for twenty-something males who see it as a continuation of their fun and free college lifestyle; the result is predictable. The company attracts more talent of the same profile and not a more diversified workforce. This works well in the early days when the core technology is being developed and you may not need much more than a bunch of guys willing to churn out the initial software. But it becomes a hindrance to attracting more diverse talent, which is necessary when you start to grow the business.

The reverse is also quite common, where older founders create a more staid and formal culture of button-down shirts and strict policies. As a result, they struggle to attract top-tier software developers who prefer a more relaxed setting. While this challenge of setting the right culture exists in any technology company, it is more pronounced in enterprise software startups where the company must strike the right balance between relaxed and cool and the more mature grown up culture.

One of the mistakes many founders make is that they overlook the good aspects of what larger companies do. It’s perhaps more prudent to carefully look at the good aspects of large company environment and incorporate those into their startup company’s culture.
Here are a few ideas on how to set the right culture.

1. Be proactive in determining the work culture and the image you want to project. You want to set the culture primarily to be attractive to the employees and customers. So think about what type of work environment will attract the right employees and how will those employees and the company culture appear to your potential customers.

2. Instead of dictating a specific dress code or work hours, make suggestions but provide flexibility in how people dress depending on their roles and work situations. Make the hours they work dependent on their job requirements. Include these in the employee handbook if you have one because if you don’t, the default culture will be set by how founders and key employees dress and work. It is probably best to give specific departments control over their dress code, work hours, and work settings.

3. Don’t overlook traditional employee benefits. Many founders are wary of providing healthcare and insurance benefits simply because either those aren’t important to them (which is true for most twenty-something males) or they’re afraid of signing up for the costs. Interestingly, the healthcare costs for a company full of young males are much lower than for a company with a more diverse and older workforce. So by providing those benefits at a relatively low cost, you can make the company attractive to the broader workforce that the company will surely need sooner or later.

4. Take time to figure out the values and principles that should drive the company. If it is innovation, creativity, excellence, then write that down. It is also a good idea to come up with moral or ethical guidelines that tell employees how to conduct themselves when working with each other and their customers. For example, if honesty, respect, and teamwork are important to you, then include those. A good set of values not only tells your employees how to conduct themselves but can become a strong branding tool for the company. Google’s “don’t be evil” tagline is a great example of that.

5. Involve employees in defining the culture of the company. Company culture should and does evolve with the growth of the company and over time. If employees of the company actively participate in building the culture, then it thrives and gets better over time.

A company culture isn’t something that a startup will figure out overnight. But apart from the world-changing technology they plan to develop, their company’s culture will be the most important key to their lasting success.

Zikria Syed is the CEO and co-founder of NextDocs, which provides SharePoint-based compliance solutions including quality management software, regulatory document management, and clinical portals.

WeWork Labs, a spin-off of the successful WeWork co-working spaces, has already picked many of its first crop of workers, including ShopperSeeks.com‘s founder Andrea Gouw and Twitter hacker Abraham Williams. The space is the second of its kind — the WeWork Labs in New York, which calls itself an entrepreneur residency, has proven extremely successful and recently added the mother of all amenities: health insurance. (VentureBeat has a space in WeWork’s New York co-working office.)

For $300 a month, aspiring “startup-adjacent” professionals and freelancers get 24/7 access to the SOMA space’s long shared tables, meeting rooms, telephone rooms, showers (for the bikers), and game lounge with a pool table and an Xbox.

Directors Kaitlin Pike and Seth Blank hope to bring together entrepreneurs, developers, designers, marketers, advisors, and investors, and then sit back and watch the magic happen as they bounce ideas off each other, meet-cute with co-founders, and ultimately “get the hell out of the space.” They hope to make the final mix 50 percent female.

Pike and Blank gave us a tour of the sunny new digs, which feels like a combination of a dorm, public library, and CB2 catalog.

You’ve got exactly what a prospective client needs to grow their business: the right service, the right software, or the right product. But how are you going to convince her of that fact when she’s in New York and you’re in Chicago? With a killer online sales demonstration, of course.

But online sales demos need to be done right or you’ll lose the client’s attention, and then you’ll lose the sale. Here are 10 tips for delivering killer online sales demos.

1. Do your homework
   Before you open up your laptop and start broadcasting, spend time talking to and researching your customer. Ask questions: Who is she? What does she need? Why? How will your solution be used? Who will use it? Once you know the answers, customize your presentation accordingly. Make it relevant to your customer’s specific situation, and you’ll close more sales.
2. Don’t waste time
   No one has time to waste on long, drawn-out introductions, explanations, or product demos. Imagine Steve Jobs is at the other end of your demo, and he’s itching to get the big picture and see the relevant details, right away, without any dressing or flowery language. Respect your client’s time, and they’ll respect yours.
3. Make it a story
   We forget facts; we remember stories. Loading a prospective buyer up with a million facts about your software or solution is counterproductive. They won’t remember them, but they will remember being bored by you. Not good. Instead, make the demo a story — the story of your client solving the problem they have. That’s going to be more memorable: There’s a hero, a problem, and a solution. Much more interesting!
4. Walk through typical uses — avoid the feature dump
   We’ve all been in the demo or presentation where a “sales engineer” is engineering his way through every single menu, every single item, and every single option in his unnecessarily complex software. Did you find that fun? Enlightening? Enjoyable? Or were you just about ready to connect your head with a hard object, quickly? Remember that feeling … and do whatever it takes to avoid replicating it in your clients. Because, with apologies, your tedious list of features is just as boring as his. Instead, walk through some common processes or typical uses. Ignore edge cases, unless there’s one the client has specifically mentioned they need. Do not walk through the configuration or installation steps. Instead, show your client what she’ll be able to do with your solution.
5. Customize your pitch for every client
   If your client is in the automotive industry, customize your examples to that segment.Don’t use examples from the packaged consumer goods industry … unless you can find an angle that credibly connects the two.
6. Sweat the small stuff
   This one may be obvious, but if so, it’s evidence that common sense isn’t nearly common enough. Make sure you get all the tech details sorted out before you start. Test, try, demo to a colleague before you demo to a prospect, and work out all the bugs.In addition, make sure you know your clients’ computing set-up, and check with the vendor who provides your screen-sharing or webinar software. Are they compatible? Are there plugins that need to be downloaded and installed? Do whatever you can to ensure that all those details are taken care of before your presentation is due to begin.
7. Provide social proof
   Whether you’re a startup or a huge company, don’t assume your prospect has heard of you, knows your story, or has faith in your ability to provide the correct solution.Ease her mind and reduce the perceived risk by mentioning clients who have used your solution successfully. Apologies, but no one wants to be your guinea pig. Everyone wants to know that this is not your first rodeo.
8. Talk less, listen more
   There is a famous adage in sales lore: “In a single day, Samson slew a thousand Philistines with the jawbone of an ass. Every day, thousands of sales are killed with the same weapon.”Don’t let your mouth be your worst enemy. Pause, ask questions, and listen. When your potential client is speaking more than you, you’re doing your job well. And you’re positioning yourself for a sale by engaging your prospect.
9. Be flexible
   Sometimes your client wants to go in a different direction than your pre-planned 15-slide presentation. Remember who is making the buying decision, and let them go. Redirect if absolutely necessary, but do it with caution.Remember, your customer knows what they need to understand and what questions they need answered before they can sign a check. Insisting on sticking to your presentation is not going to make you popular … and an unlikeable sales rep is a poor sales rep.
10. Don’t forget sales 101
    You’re showing your product, you’re customizing the presentation to your client, you’re listening, you’re doing it all right. Just don’t forget why you’re there: to make a sale. When the opportunity comes (and you may have to invent the opportunity), ask for the sale.You may have to use trial closes if you’re early in the sales process, but you need to make this more than simply an informational session. It is, but it’s also a sales call, and your job is to provide the information and context within which your client can make a good decision.

Now you’re a pro: ready to go. Load up with lots of energy and make it fun for both you and your client!

Photo credit: Sean MacEntee

Unreasonable at Sea mixes startups, Semester at Sea students, venture capitalists, and seasoned entrepreneur mentors to create a floating incubator. But instead of floating in one location off the coast of California like Blueseed, this voyage will sail startup entrepreneurs to 14 international ports to help them expand businesses that have previously operated in only one market.

I recently spoke with the mastermind behind this endeavor, Daniel Epstein. During his junior year in college, he enrolled in Semester at Sea (SAS), a study abroad program that sails around the world on a ship. It was during his journey that he began working on the the incubator and investment firm he operates today. The ah-ha moment for Unreasonable at Sea came when he thought of combining his experience as a Semester at Sea alumni with his Unreasonable Institute, an incubator for entrepreneurs focused on social and environmental topics.

“Six months ago, the president at Semester at Sea called me. He thought that Semester at Sea was missing an entrepreneurial energy and presence and told me he would send me on the ship. I was excited, but [I thought] it had to be more interesting than just me on the boat,” said Epstein, in an interview with VentureBeat.

Epstein decided to operate his incubator on board the ship instead of just tagging along for the ride. The goal of the program is for startups to expand into new markets and pitch to new investors. At each of the 14 ports, startups will attend pitch events where they’ll meet investors, politicians, and business people and show off their awesome ideas. All feedback will be used to improve the startup for the next pitch event in another country.

“From the entrepreneur’s perspective, it’s an opportunity to experiment with products and technology internationally. Startups can take their technology to another market to see what works and walk out with a globally relevant product,” Epstein said.

Unreasonable at Sea is accepting applications through June of this year and has already received responses from startups in more than 100 countries. Once all the applications come in, Epstein and his team will select 10 entrepreneurs and one to two of their team members to set sail on the maiden voyage.

From January 6, 2013 to April 25, 2013, Unreasonable at Sea will sail to across the Pacific and India Oceans, starting in San Diego and ending in Barcelona, Spain. In between, the ship will stop in Hawaii, Japan, China, Hong Kong, Vietnam, and India, to name a few.

While on the ship, each startup will get the chance to interact with venture capitalists, entrepreneurs, and advisors who will coach them throughout the process. Half of the mentors have been selected and include vice president of business development for Google Megan Smith and retired vice president of HP Phil McKinney. Once the startups are selected for the program, more mentors will be added to fit each company’s unique needs.

In addition to working on their businesses, the startups will be interacting with SAS students to learn about entrepreneurship and business. Epstein and his team also plan to spend time teaching SAS students about business.

If you think your startup has what it takes, check out the requirements of the program and submit your application quickly. You have until June 5 to prove that your company is worthy of sailing around the world.

This sponsored post is produced by TiE.

Successes such as Instagram, has got the whole tech community up in restless excitement. At least 2 developers approached me the day the Instagram acquisition was announced. They needed to do something. If not here, surrounded by the startup frenzy in the Silicon Valley, then where else, they said.

This is the right time, the right economy, the right place and everyone wants a ride on the startup train. And TiEcon is the biggest Entrepreneurship Conference, which has something for everyone – from Entrepreneurs, Investors, to Engineers, Recruiters.

Entrepreneurship – What it takes

The rosy successes and all – there is a lot that goes into entrepreneurship. What people to hire, who to pick for your founding team, who to partner with, when & how much to take to market, when to raise funds and if you are lucky like Instagram & many others before, when & whether to sell. Do you have what it takes? The Entrepreneurship panel at this year’s TiEcon , gives you food for thought.

Entrepreneurship for Women

Entrepreneurship, is perfect for women! And here is why. For one, it destroys the myth of the Glass ceiling (A woman Entrepreneur – To be or not to be) exposes Gender socialization (Deborah Gruelfeld at TiEcon on Mastering the Body Language for Power and Influence) and only your technical, social and business skills are the ones on the line. There is no limit to your creativity.

What goes into making your startup a success

If you are on the entrepreneurial track, there are many things that go into making your startup, a success. Whether to bootstrap, or take money from Angels or VCs or How to take your product to market? A startup is about a team with the perfect complementary skill-sets. So how do you build your winning team or judge whether you are part of that winning startup team. Once your startup is off the ground, does it have the belts and buckles in place for the journey up the hockey stick curve? And well – if you are young, right out of or in school/college and wondering how you could start a company– there is the Young entrepreneur’s guide to getting started doling out advice on it, at the TiE Youth Forum.

For the Geeks in us

‘What if Im not an entrepreneur’, ‘What if I love coding and and, building things?’ Well, this year’s TiEcon fuels the developer’s passion and knowledge as well.

The Social Panels talk about the next frontiers in Social Gaming, how internet commerce has been impacted by Social media, and what the emerging trends and opportunities are in the Social space.

The Mobile panels talk about the latest mobile trends and opportunities. You could learn best practices from mobile companies for deployments in the enterprise space.

The Energy panels talk about the upcoming applications and emerging trends in energy fields, the hottest opportunities in the cleantech area, and the evolution of energy efficiency in the automobile sector.

The Life Sciences Panels talk about Medical device innovation in emerging markets, and opportunities in Mobile health.

The Cloud Panels talk about how Cloud & SAAS are being used in the real-world, emerging trends and opportunities in Cloud and how Consumerization in the Enterprise is driving opportunities in the Cloud.

What the Stars foretell

And that’s not all. This year’s TiEcon 2012 (May 18 – 19, 2012) also has some amazing Keynotes from Dr. Vishal Sikka, Head of Technology at SAP and Carlos Dominguez, Cisco SVP. In the Breakthrough Thinkers keynote, Dr. Deepak Chopra, talks about Prosperity and Leadership. And finally, Sam Pitroda tells the story of how innovation was ignited in India, which has led to the Internet revolution there and the new booming economy that we see there today.

And this isn’t all. At the TiEcon Expo you will find 100 or so startups displaying their latest products and innovations. And in the corridors of the convention, you will find endless opportunities to Network and talk to the smartest of entrepreneurs, investors, passionate developers who are on the cutting edge of technology. A boundless, priceless opportunity to connect, network, learn, grow and prosper…

Whether or not you were aware of it at the time, the world changed in 2011 when Ken Jennings lost to IBM’s Watson on Jeopardy. As a part humorous, part chilling conclusion to the historic show, Jennings wrote the following beneath his final answer:

I, for one, welcome our new computer overlords.

Jennings recognized something investigated in the book, Race Against the Machine, published by Erik Brynjolfsson and Andrew P. McAfee at the Massachusetts Institute of Technology. According to the book, Race Against the Machine explores the ways “we’re living in an era where computers dominate every aspect of our life, and unless we catch up and start working with the machine rather than against it, the new economic machine is going to spit us out.”

We can draw correlations to the patterns we’re seeing in income disparity and job displacement from technology and automation. The theory in Race Against the Machine also helps to explain humans’ role in the new economy. At only 80 pages, it is a must read for anyone still on the fence about whether to pursue a liberal arts degree or one in engineering.

Most people with a liberal arts degree are struggling to find jobs, but tech companies are scrambling to find talent. It’s still one of the most difficult problems in a startup: hiring smart people. The money and power has already shifted and will continue to disproportionately shift to people who either (a) know how to program or (b) figure out how to work well with those who already do. There’s an enormous ecosystem of value creation potential out there if you could only contribute to it.

Is there anyone who is immune to technological unemployment?

In 2004, Frank Levy and Richard Murnane wrote that truck drivers are nearly immune from technological unemployment in The New Division of Labor:

The truck driver is processing a constant stream of [visual, aural, and tactile] information from his environment… To program this behavior we could begin with a video camera and other sensors to capture the sensory input. But executing a left turn against oncoming traffic involves so many factors that it is hard to imagine discovering the set of rules that can replicate a driver’s behavior… Articulating [human] knowledge and embedding it in software for all but highly structured situations are at present enormously difficult tasks… Computers cannot easily substitute for humans in [jobs like truck driving].

At one point, it was easy to write off computers as being our drivers. The 2004 DARPA Grand Challenge supported this hypothesis. The “winning” vehicle took hours to get just 8 miles into the 150 mile course, and then stopped working.

Surprisingly, something happened less than six years later, not centuries or decades later: Google modified the Toyota Prius to be fully autonomous. Today, Priuses have driven hundreds of thousands miles with no human guidance on American roads. There was only one accident ever reported, when a human driver read-ended the Google-modified vehicle.

Why did this happen so quickly? Six years is all it took for this seemingly quantum leap into fully autonomous driving that Levy and Murnane pointed out as so computationally difficult to solve. It’s not just that computers are getting cheaper and faster. Martin Grötschel showed that processors were increasing efficiency in computing a la Moore’s Law by a factor of 1,000, butalgorithms were 43,000 times faster in the same time span.

This sweeping change isn’t coming in futuristic gas-sippers from Mountain View. On the legal side, Blackstone Discovery analyzed 1.5 million documents for less than $100,000. The one human assisting the machine did the work of 500 lawyers. And the machine-human pair did a much better job: lawyers have been shown to achieve only 60% accuracy in this mundane, headache-inducing work.

In China, Foxconn already has 10,000 robots and expects to buy 300,000 next year. Over the next 3 years the company is planning to purchase 1,000,000 robots to replace a portion of their existing Chinese workforce.

Even in sales, companies are turning to software instead of people to close. Since June 2009, when the recession ended, corporate spending on software is up 26%, but payrolls remain flat. When I ordered tickets to Florida, I bought them on Hipmunk without any interaction with a human. I got on a train and ordered my ticket through a computer and when I got to the airport I printed my tickets from a kiosk. I was even lucky enough to proceed through security with minimal interaction with the TSA.

There are very few professions resistant to automation and those tend to involve physical coordination and sensory perception, a phenomenon called Moravec’s Paradox.

How much theory is relevant?

Is Race Against a Machine arguing that computer science is what everyone should be studying now? Not necessarily. The book is optimistic but points out that the educational system is doing a terrible job of teaching people how to be creative and how to work with machines. It’s important to be able to work creatively with technology, as Steve Jobs once said:

When I went to Pixar, I became aware of a great divide. Tech companies don’t understand creativity. They don’t appreciate intuitive thinking, like the ability for an A&R guy at a music label to listen to a hundred artists and have a feeling for which five might be successful.

Granted, you’re not a computer scientist just because you can build web applications. Maybe you’re just a web app developer, but I think that’s good enough. A web developer today can go and get an entry level job in California with $70,000 or more in salary plus benefits, equity, significant learning experience, and plenty of room for career mobility. I was 20 years old in 2007 when I was offered $70,000/year to join a company as the first employee.

Can you get away with being a web application developer and skip accreditation altogether? Computer science curricula is still heavy on theory, but much of the theory and lower level material taught in CS is not necessary for a startup — when was the last time you needed to know how multiplexers work at the gate level? Everything you learn sits somewhere on a totem pole of tech abstraction, so the current debate seems to be over how low on that pole you should go to learn what’s applicable to what you’ll use in a tech role.

Creativity and intuition

What can’t computers do? Intuition and creativity. That’s where humans can help. We will never win the race by running faster than the machine, but we can still help it with the skills it can’t yet replicate. When you think about it, it’s a match made in heaven: the power of the machine harnessed with the creativity of the individual. Undoubtedly there is no limit to the markets that remain to be captured.

I realize there’s some irony that our willingness to work with the machines is also what causes an increase in automation, and a potential increase in unemployment for those who don’t adapt. There was a Redditor who asked if he was a scumbag because he automated his work and ended up with 95% of the entire bonus pool because other people performed poorly in comparison. There’s nothing to stop other employees from learning Ruby or Python and balancing out the bonus pool again — no CS degree required there; just creativity and cooperation from a machine.

Fortunately, Race Against the Machine isn’t a grim outlook on our jobs or standard of living if we can race alongside the machine. In 1800, 90% of all Americans worked in agriculture or farming in 1800; by 1900 41% did, and only 2% by 2000. We found more jobs and higher standards of living in the manufacturing and services industry that emerged. When we left the Industrial Revolution, we saw many more jobs as a result–not fewer.

I don’t think we’re heading towards the “end of work” as some economists would suggest. We’re experiencing the natural and healthy fluctuations of a market that is deeply starved for technical skills, or at least people who can use their creativity and intuition in unison with technology.

Jared Tame is a co-founder and mentor at Bloc, where he’s teaching people how to become web developers in 8 weeks.

The NextGen Conference takes place on May 19th at the Parc 55 Hotel in Downtown San Francisco. This conference brings together young aspiring entrepreneurs and young rock star entrepreneurs with more experienced entrepreneurs and venture capitalists.

Cory Levy, co-founder of One (http://bit.ly/pLyhvm) and the NextGen Conference, has previously planned three sold out events in Palo Alto, Stanford University and UCLA. This past conference in Palo Alto was sold out with 250 attendees and a 60+ person waiting list. Previous speakers and attendees at the NextGen Conference include: Peter Thiel (founder of PayPal and member of Facebook’s board of directors), Keith Rabois (COO of Square), Mark Suster (GRP Partners), Travis Kalanick (CEO of Uber), Scooter Braun (Justin Bieber’s manager), and more. Ashton Kutcher showed up as an attendee at the last NextGen Conference in July.

Speakers at this year’s event include: Tony Conrad (founder of About.me and True Ventures), Keith Rabois (COO of Square), Josh Elman (Greylock), Sahil Lavingia (founding team of Pinterest and founder of Gumroad), and more!

For 20% off, register now using promo code “VentureBeat”.

Startup accelerator 500 Startups announced its fourth batch of companies on Wednesday, a fun group that includes a necktie subscription service, a Dropbox-based collaboration tool for creatives, a consumer-action site currently trying to take down Big Cable, and a property-inspection iPad app.

For those who aren’t familiar with it, 500 Startups is an early-stage seed fund and incubator program that’s become a brand name over the last few years, mostly through the sheer volume of companies it’s invested in. The Mountain View, Calif.-based group invests between $25,000 to $250,000 in startups, primarily those aimed at consumers and small-to-medium-size businesses, as well as related web infrastructure services.

Its latest selection of companies is eclectic, but there are a few trends: Fashion, and help for people who are fashion-deficient, is hot — inspired no doubt by a little company called Pinterest. Education disguised as fun, specifically on iPads, is huge as well. Only seven of the 26 companies have a female co-founder. There are twelve international entries from variety of countries including Mexico, Brazil, Slovenia, India, and the Philippines, and over half are from outside the San Francisco area.

“The previous batches have always had some international presence, but that’s something that really stands out in this group,” said 500 Startups partner Christine Tsai, who told VentureBeat that they didn’t necessarily seek out companies in foreign markets. Founding partner Dave McClure also previously noted that the startup accelerator doesn’t mind looking outside its comfort zone, and has added a number of international partners to help boost its awareness.

Companies accepted into 500 startups get a chunk of funding in exchange for equity, access to a network of mentors and resources, the ability to participate in various events, and  a spot presenting in front of potential investors at the accelerator’s Demo Days conference.

500 Startups put together a short video for the new batch’s debut, inspired by the new Hunger Games movie, but we’ve created this more scannable roundup of the latest startup hopefuls. You can also see screenshots of their products in the slideshow at the bottom.

ActivityHero

This website is a directory of activities that keep kids busy while freeing up a few hours (or days or weeks) of down time for their parents. Calling itself a “Yelp for kids’ activities” the company grew out of a listing of listing summer-camps that started last year called Sign Up For Camp.com. Now it’s expanding the business to include shorter activities such as dance classes, art programs, and other after-school time-killers in its two pilot locations, the San Francisco Bay Area and Philadelphia. On the site, parents can read program descriptions, locate a program on a map, or check out user reviews.

A lot of the company’s copy is angled specifically at moms, but the assumption that fathers wouldn’t be equally interested in finding extra-curricular programs for their brood seems old-fashioned, not to mention bad business. Dads want some alone time too, you know? The company was founded by Silicon Valley vets Shilpa Dalmia, Chandini Ammineni, and Peggy Chang.

Bluefields

At first we thought this was another fantasy league startup, but were pleasantly surprised to see that it a tool for organizing real live sports teams. Using a combination of the startup’s desktop, web, and mobile apps, you can organize a your amateur soccer team, sloshball league, or quiddich playoffs. Send invites over email or text, track who’s in the lineup as people respond, create a landing page for game details with a map, and quickly let everyone know about last-minute changes or cancellations. The London-based company was founded by Andrew Crump and Piers Rollinson.

Bombfell

Getting dressed can be hard, especially for fashion-challenged dudes. Bombfell just wants to help. This is actually a startup that Silicon Valley’s hoodie-wearing hoards desperately need (perhaps for when they’re presenting their company to potential investors ahead of a major IPO). The subscription-based service asks you what you need in your closet — perhaps you want help with finding non-jeans pants, decent collared shirts, maybe even a sweater vest that brings out your eyes. A stylist will handpick the requested item from a selection of hip brands (Ben Sherman, French Connection) and talented new designers (Descendant of Thieves) and ship it to you. If you don’t like what they’ve sent, mail it back with free shipping and don’t pay anything for the clothing item. If you decide, hey, this button down makes me look pretty fly, you can keep it and Bombfell charges you a $69 flat fee.

Bombfell was started by a couple of Harvard alums, Jason Kim and Bernie Yoo. Kim has worked at Nickelodeon Games, MTV Networks, and Morgan Stanley. Yoo put in time at LOLapps, Goldman Sachs, and Microsoft, as well as Y Combinator alum Foodoro, an online marketplace for gourmet food.

CardFlick

Sometimes we’re at tech conferences or events and think, dang, how crazy is it that we still exchange paper business cards? Following in the footsteps of Bump, CardFlick is taking a stab at the virtual business-card space with a design-centric iOS app that came out last year. You can design a slick-looking virtual card using photos from your Camera Roll or Instagram and then physically flick the screen to send your card to someone else who has the app. If they don’t have it installed, you can just email, text, or tweet it. The info is automatically added to the iPhone’s Contacts app, and if someone updates their CardFlick information, the same data is automatically updated for all the people who have their card. An Android version of the app is currently in beta. Unsurprisingly given its beautiful interface, CardFlick was founded by a designer, Ketan Anjaria.

Chalkable

This tool for school is a web-based platform that helps teachers and institutions manage day-to-day tasks. There is an app store filled with compatible web-apps on a variety of middle school and high school topics. Those apps can use the Chalkable API to work with any of the service’s core features, including a shared calendar, grading tools, attendance tracking, and a custom emailing interface. For Chalkable to work best, a school needs to set it up so all teachers can take advantage of it. The cost is $10 per student a year, with half of that going into a budget for apps. The New York City based startup was founded by Michael Levy, who previously founded Entertainment Teller Machine and worked at TriSpecs Inc, and  Zoli Honig, who started the IT firm ZZ Tech and fro-yo chain Berrylicious.

Fontacto

One of this group’s international entries, Fontacto is a Google Voice-esque tool for people in Mexico and other parts of Latin America. An entrepreneur or freelancer working out of a home office or coffee shop can use a virtual Fontaco number to sound more professional, like they’re in a proper office and wearing pants. A Fontaco number can be rerouted to any landline, mobile phone, or even a Skype account. You’re not limited to a number for your location, you can get digits for other cities and give the impression of being everywhere at once. The startup was founded by a team of four: Daniel Martinez, Joaquin Martinez, Jose Antonio del Rio, and Ricardo Cacique.

Groupiter

This new collaborative offering piggybacks on wildly popular cloud sharing-tool Dropbox. Groupiter adds real-time conversations to file sharing. Upload that power-point deck and sit back while your co-workers discuss the pros and cons of using Comic Sans on the title page. Share a few photos of wedding dresses and get immediate opinions from a sibling overseas. The company is still keeping details under wraps and is not currently offering the tool to the general public (you can sign up on the homepage to be on the invite list), so its hard to tell how much it has in common with similar offerings in the space such as 37Signals’ Campfire. It will most likely be aimed at more creative types and workflows, and founder Chris Dyball (formerly of Getty Images and Surfing Magazine) said recently on Twitter “we’ve been working with leading creatives at Warner, Sony, Lego, Hulu.”

Happy Inspector

When you think “property inspections,” the word “happy” might not immediately pop into your mind. If you are a property manager who has to do these types of tedious inspections for a living, being able to do them on a slick iPad app is probably very happy-making indeed. You can fill out the default fields (the kitchen sing is good/fair/dirty/broken) on the checklist or make your own custom entries, and attach an image to each one. When you’re done with a report you can automatically generate a PDF for the house, apartment, TV studio, ice cream parlor, or hospital and email it to any relevant parties. The app is free, but each inspection will cost $1.79, or you can inspect your little heart out with the unlimted $45 a month plan. The company has two offices in Australia and was founded by Jindou Lee, Jindou Lee, and Andrew Mackenzie-Ross.

Ingresse

This ticketing and events-discovery site lets organizers or performers add their own events, sells tickets, and shows attendees which of their friends will be at the same concert, art show, conference, or football match. It will even share where their buddies are seated. After collecting a bit of information from a user, the site will even be able to recommend similar events they might enjoy. Afterwards, attendees can leave reviews or comments about an event. The company is based in Brazil, where the founders saw an opportunity to provide much-needed electronic-ticketing technology to ticket vendors. The co-founders are Gabriel Benarrós, who studied behavioral economics at Stanford, Sébastien Robaszkiewicz, who studied Computer Science at Stanford and Marcelo Henrique.

Monogram

One of a number of fashion-related startups in this group, Monogram is a shopping app for the iPad that turns an algorithm into a personal stylist. Similar to popular news-reading apps Flipboard and Zite, the app learns what brands and fashions you like over time and edits down the content it delivers to fit your tastes. However, the Monogram founders were smart enough to add some humans to the mix because “machines alone have no sense of style/trends and do a poor job of fashion recommendations.” The app groups things into categories such as price (purses under $500? We’ll take four!) and new, or by store or flash sale site, such as Gilt Group. Leo Chen and Josh Chen aren’t just co-founders of the Mountain View-based company, they’re also roommates! The two met on a Geeks on a Plane trip and have another startup together, Packagetrackr, which covers their rent with AdSense money.

PocketOffice

This iPhone app wants to make it easier for small businesses to communicate with their clients or other business contacts, improving customer retention. Using the app, you can connect with people using text messages, email, Facebook, Twitter, or LinkedIn. You can have one-on-one conversations or send out mass promotions. The app will automatically address each email to the individual person, saving you the pain and misery of a mail merge. It can also be used to encourage referrals and book appointment slots. The service costs $25 a month after a free one-month trial period. PocketOffice is a San Francisco based startup, co-founded by Alan Wells (formerly of Zynga, Affinity Labs, and Nextive) and Glenn Allen (a co-founder of OpenTable).

PublikDemand

Firing off an angry rant to a customer service email address can be satisfying, but does it really make a difference? PublikDemand helps organize your outrage against companies, union-style. Customers can band together to make demands such as taking on Comcast for violating net neutrality. To up the stakes, if a company doesn’t comply PublikDemand will work with its competitors on exclusive offers. Naturally, the idea was inspired by customer service black hole Time Warner Cable, which charged Courtney Powell hundreds of dollars for a router they claimed she didn’t return. Powell is now CEO of PublikDemand, which she started in Austin, Texas with co-founders Jim England, A.T. Fouty, and Richard McClellan.

Sqoot

After last year’s deluge of daily deals sites, many of us were suffering daily deals fatigue. (Group-yawn, amirite?) Sqoot has a different approach that may bring a little life, and money, back to the genre. Using the Sqoot API, apps can integrate daily deals offers into their existing apps, giving them a way to make some money. For $99 a month, apps can keep 50 percent of the revenue on any deals sold through their app. It’s a nice alternative for any publisher or developer with a location-based app. The Chicago-based co-founders Mo Yehia and Avand Amiri are still distancing the company from a gross bit of sexism while promoting a hackathon earlier this year.

Storypanda

Storypanda makes interactive kid’s stories for the iPad. The app acts as a bookshelf and marketplace for Storypanda books — the selection will be updated monthly. A modern day choose-your-own-adventure book, kids can re-mix their favorite stories and share the results with their friends. The Vancouver-based startup’s co-founders, James Chutter and Pavel Bains, bring an impressive amount of experience in interactive entertainment, including time in the game, film, and TV industries.

Teamly

Work productivity-booster Teamly starts by having employees enter their top five priorities for the day and month, and then sends them helpful daily email reminders. Managers can track what their minions are working on and see the latest status of any tasks, as well as charts showing their productivity over time. The micromanagement app claims it will help ease micromanagement, perhaps by making it an unspoken, passive sort of activity. If unspoken isn’t your management style, you can leave comments on different tasks (“Stop reading MSNnow and finish that feature. -Dylan Tweney”). Teamly will only let you set a handful of goals, which can help you focus on what’s important. The UK-based startup was founded by Scott Allison, Matthew Berman, and Edward Robertshaw, who met in Omaha, Nebraska.

TeliportMe

TeleportMe is a panorama photography app for Android smartphones. The app lets you take large panoramic images with your phone’s camera and stitches them together. The final product can be shared on Twitter or Facebook, or though TeliportMe where you can set up a profile for yourself. The fun part is browsing other users’ panoramas from around the world. The app will compete against similar products, Photosynth and TourWrist. TeliportMe was founded in Bangalore, India by Vineet Devaiah and Abhinav Asthana.

TenderTree

This startup connects people who need help with older or infirm family members with qualified caregivers in their area. Trusting a stranger to take care of a loved one can be stressful, but TenderTree helps by carefully screening the candidates for you. Caregivers are subjected to a federal background check and interviews with previous clients before they can even be listed. Once you hire someone, the service helps with the little details like managing payment, contracts, and tracking hours. The service is in beta in San Francisco, but will be rolling out to other cities in the near future. The Bay Area company was founded by Andy Agrawal and Dana Wu.

Tie Society

When you hear the name “Netflix” you immediately think of ties, right? Us too, which is why Tie Society is offering online rentals for men’s neck ties. As the company’s founders explain it, not every upstanding man has the opportunity to buy a new tie for every event. Tie Society allows them to choose between ties of all colors, materials, and widths to keep up with the trends no matter how small their closet is. With only 300 ties for all those necks, we hope they will grow their inventory as they grow their customer base. (The Tie Society customer makes us think of that Tea Party YouTube video created by Smirnoff Iced Tea. It features Martha’s-Vineyard-20-somethings, swaddled in seersucker and cable knit, “chillin’” on golf courses.)

Timbuktu Labs

This iPad app is an interactive magazine packed with a variety of content to keep your kids entertained while they’re learning. The issues are filled with great design, things to read, quizzes, photos, simple games, and videos. For example, in the Night issue there’s an article shows you how to make shadow puppets, tips on sleeping tight, and fun stats and facts. The Italy-based company was started by Elena Favilli and Francesca Cavallo.

TokyoOtakuMode

Representing Japan, this year-old news site (called TOM for short) has the latest on Manga and Anime culture. Currently, all of the action is taking place on the startup’s Facebook page, which has 3.7 million likes. Our favorite detail about TOM is that once a month everyone comes to work in full cosplay getups. We hope they’ve carried that tradition over to 500 Startups.

Toshl

You hate tracking your finances, you love playing games. What if your bank accounts were a little more game-like? Toshl wants to make finance and budgeting fun, and it uses actual adorable monster characters to do it. Impressively, the app is available on most every phone platform, including BlackBerry and Nokia. The Slovenia-based company was founded by Matic Bitenc and Miha Hribar.

TwitMusic

This startup out of the Philippines gives musicians a way to promote their music on Twitter by auto-tweeting songs and directing followers to a special landing page for each tune. The page is optimized for maximum sharing, hashtags and all, to help your ditty go full Rebecca Black (only good, hopefully). The company already has some pretty impressive musicians using it, including Duran Duran, Bow Wow, Jason Mraz, and Brian Adams, who released a single exclusively on the platform. The company goes up against similar audio-hosting service SoundCloud. It was founded by Stefano Fazzini and Christian Fazzini.

UmbaBox

Another monthly delivery service, UmbaBox is packing up handmade products for the ladies who love Etsy. Each shipment contains one to three products such as jewelery, bath products, or home decor. You never know what you’re going to get, but the crew at UmbaBox is handpicking the goods to prevent any Regretsy-worthy shipments. Memberships costs $23 a month, with a minimum three-month commitment. The Washington D.C.-based company was founded by Lauren Thorp.

Uscoop

College kids might spend most of their time in sweatpants, but that doesn’t mean they don’t have style, right? Uscoop is another fashion-deals site, this time just for kids in college, who have their own micro-trends to stay up on. Instead of using an algorithm or stylist, Uscoop looks at what college kids are wearing to give other college kids an idea of what college kids are wearing. The D.C.-based company peddles “all-American” brands and was founded by Jocelyn Gailliot, Madeline Moore, and September Rinnier.

Wanderable

Registering for kitchen wares is so old school. Hip young couples getting married want to pool their guests money for exotic honeymoons instead. Traveler’s Joy has been the go-to site for honeymoon registries for years. Wanderable hopes to make a dent in its market share by giving users a bit more control over the design of their landing pages, and by adding a community layer so newlyweds can share (the g-rated) details about what they did on their honeymoon. The co-founders, Marcela Miyazawa and Jenny Chen, met when they were assigned as roommates their freshman year at Stanford.

Yogome

Finally, Yogome disguises learning about topics such as math, languages, recycling, and health, in a cool game that pits a squad of super-smart heroes against the evil Queen Ignorantia. Each game is a stand-alone iPad app with bright comic-book-like illustrations. The Mexico-based startup was founded by Manolo Diaz and Alberto Colin.

Additional reporting by Tom Cheredar and Meghan Kelly.

Mechanical Turk is Amazon’s army of pieceworkers, ready to help you blend computation with human tasks in web apps.

What I didn’t know is that MTurk is also a powerful tool for testing and refining ideas. I learned this while interviewing Dan Shapiro onstage at the Founder Showcase last week.

Shapiro is a remarkably successful entrepreneur. His second startup, Sparkbuy, was acquired by Google just six months after he launched it.

That’s after a successful go with his first startup, Ontela, which merged with Photobucket in 2009. That company took a relatively pokey four years to arrive at an exit. Of course, by most people’s standards, four years would be plenty fast.

But what makes Shapiro’s approach to starting companies so interesting is the thorough, pragmatic approach he takes to market testing.

“I’m always skeptical when I get too in love with an idea,” Shapiro told me.

So when he had an idea for making it easier to find and compare electronics on e-commerce sites, he turned to Mechanical Turk to test and refine the plan.

(It also helped that a Google business development executive he met on a plane expressed interest in the idea, but “that was just a tiny, positive indicator in the grand scheme of things,” Shapiro said.)

Mechanical Turk, a project Amazon.com started in 2005, is a brilliant fusion of human labor and programmatic computation. Using it, you can incorporate human effort into your web-based software simply by making an API call. It’s no surprise that entrepreneurs are excited about using MTurk as a low-cost way of recruiting help, particularly for repetitive tasks.

But it’s also a great, low-cost tool for doing surveys, and that’s exactly what Shapiro did.

The first part of his surveys is always the set of eight questions from the U.S. Census. That helps him determine demographics and figure out how “normal” his respondents are.

Then he follows up by asking them a ton of questions.

First, Shapiro asked 100 people to describe a laptop as if their friend was going to buy it for them. Then he analyzed the responses, categorized all the words they used, and did a second survey to measure how important each of those words were. After that, he did follow-up interviews.

What Shapiro found was that the #1 criterion for laptop shoppers was price (no surprise there). But the #2 criterion was quantity of RAM, which was a bit surprising because it is an unusually geeky metric. Who really cares how much RAM their notebook has, after all, except really techie people? After doing some interviews, he realized that what people really wanted was speed, but there was no way on electronics sites to specify “I want a laptop that’s fast enough to run PhotoShop.”

Using these answers from a series of surveys, Shapiro was able to craft a business plan for a company that would let you shop for laptops based on criteria people actually care about, such as the ability to run PhotoShop, or weight, or color. What’s more, he knew from his market research that these were the criteria customers would be most likely to respond to, so his business idea was essentially pre-tested.

“I love MTurk,” Shapiro said.

He also used MTurk in the course of business, not just for business plan testing. For example, Sparkbuy’s database of laptop attributes was built in part by an army of “Turkers.” And at Ontela, he’d put out surveys with 100 or more questions about the wireless industry, using them as a valuable market research tool.

The price is almost ridiculously low. Shapiro said he would pay about 26 cents apiece for people to answer these 100-question surveys.

Shapiro’s not a solitary genius — others, particularly academics, have discovered the value of using MTurk in research. In 2009, someone named Alex Frakking described in detail how he used Mechanical Turk for conducting surveys. He paid a bit more: about 3 cents per survey question, in an attempt to keep the hourly rate between $8 and $12.

Frakking makes an interesting point, which is that the very people who fill out your survey on MTurk might turn into some of your earliest customers. You can make that easier by letting them opt-in to a mailing list so you can contact them when you launch. “In the last big survey I did, about 20 percent of respondents gave their email for just that purpose, meaning the survey can pay for itself in leads,” Frakking concludes.

Are Mechanical Turk surveys statistically valid? Absolutely — or at least as valid as phone or website surveys.

“The funny thing is,” Shapiro told me onstage, “if you actually look at the methodologies behind the way everyone else does it, it’s just the same.”

In a 2010 study, researchers compared surveys done with MTurk to those done using the traditional sociological pool, Midwestern university students, and with people found on Internet discussion boards. MTurk compared favorably.

The study concluded “experimenters should consider Mechanical Turk as a viable alternative for data collection,” although it warned that subjects are susceptible to the same kinds of experimental bias found in other arenas. The takeaway: Design your surveys carefully.

Also, the authors warn, unlike undergraduates, MTurk workers aren’t replaced with a new crop every few years, so there’s the potential for long-term relationships between surveyers and those surveyed. So don’t be a jerk: Treat your survey respondents right and they’ll be there for you, potentially for years.

For people who are interested in following Shapiro’s lead, there’s an open-source set of tools for doing MTurk surveys, called Lime Survey. And IT World published a detailed list of tips on running experiments or surveys on MTurk.

The rest of my discussion with Shapiro covered topics such as who should raise venture capital (not everyone), his experiences selling Sparkbuy and merging Ontela and Photobucket, and his thoughts on crowdfunding. It’s worth a listen. The whole 30-minute interview is below.

Mechanical Turk image: Wikipedia

Traditional hiring is extremely painful. But with the explosion of online work, businesses are breaking the limitations of geography, and they aren’t going back — 76% of businesses characterize online work as a long-term strategy, and 90% say it makes their business more competitive, according to data released by my company, oDesk, a few weeks ago based on a survey of over 7,000 of our clients.

It’s easy to see why: Access to talent is a critical factor in accelerating success, especially for smaller businesses. MCF Technology Solutions, a development service for cloud-based platforms, is one of millions of startups leveraging online work for this reason. MCF started with just a few designers hired online, then turned to software developers, project managers, assistants, and more. Its 15-person on-premise staff is now empowered by 19 online team members, and CEO Govind Davis couldn’t imagine it any other way. Wiith online work “I have an army,” he said. “It is a huge breakthrough for us in allowing us to grow.”

According to Staffing Industry Analysts, 50% of the Fortune 100 workforce will be contingent workers by 2020, and there is no reason most of these workers shouldn’t be working online rather than on premise.

To stay competitive, it is imperative that businesses embrace this new working model. But when applicants are no longer sitting across the table from you, how do you assess whether they are a fit for your business? Here’s how:

1) Go above and beyond your typical job description to attract the most qualified talent

Having a global pool — instead of being limited to only candidates within commuting distance — increases your chances of finding ideal talent for your role. And when workers have literally a world of jobs to choose from, the ones who actually pursue yours are more aligned with your needs.

But to tap into this larger pool of motivated candidates, you need a job description that’s even more clear than usual, to increase the chances that the right candidates with the right qualifications find your job. The best descriptions not only outline skills required, exact objectives, and any key context, but also expectations for deliverables.

2) Single out exceptional communicators

As with local hiring, we typically look at four key dimensions when determining fit:

1. Personal characteristics
2. Motivation
3. Skills
4. Knowledge

However, some additional characteristics are particularly important online. Exceptional communication skills are especially critical — the best online workers check in frequently, ask smart questions, and skillfully articulate ideas and concerns. An ability to understand projects holistically is also key, as it allows online workers to foresee potential problems and propose new ideas.

3) Test drive your favorite candidates

For online hiring, it’s common to start with a test project — a small assignment, requiring only a few hours of work, that is representative of the larger project and assesses the skills required. Test projects are low risk and extremely informative. You may even want to test multiple candidates and hire the best fit. Take your time in making the final hire, since you can complete the entire process — from fielding applications to making an offer — in just a few days.

What are you waiting for?

The world of work is changing for good, and clinging to hiring processes that worked in the past will quickly render your business extinct. Like anything new, you have to invest time in online hiring to figure out what works best for your business, but starting now will help you build a trusted online team at your own pace. You will be amazed by what you can accomplish when talent is your only criterion and geography is merely an afterthought.

Gary Swart is CEO of oDesk and has more than 17 years of experience in the enterprise software market. Prior to oDesk, he was VP of Worldwide Sales for Intellibank and Business Unit Executive for IBM’s Rational Software Product Group.

[Top image credit: Andresr/Shutterstock]

Venture capital investment is hitting the skids in China, the world’s largest Internet market.

VC investment fell to its lowest level in six years this quarter, as reported by Dow Jones VentureSource. A slew of unprofitable companies going public have deterred overseas investors, who are no longer pouring funds into Chinese start-ups.

“The reason the venture capital market dried up is because the exit market is not there,” said Tim Chang, managing director at Mayfield Fund.

According to the report, this quarter saw steep declines: a 39 percent decline in deals and a 56 percent decrease in VC investment compared to the first quarter of 2011. Information technology and consumer internet services have taken the biggest hit.

“The market has stopped believing in the fast-growth-only story of China,” said Chang.

The rise and fall of China’s entrepreneurial economy is a classic cautionary “get rich quick” tale. As early as 2003, highly profitable tech companies like Baidu, the Google of China, whet investors’ appetites. Valuations were dirt cheap; Chinese companies went public and did very well. Overseas investors smelled opportunity and by mid-2010, according to Chang, “China went into crazy, hyper bubble mode.”

Filled with confidence, Chinese entrepreneurs would joke that they only needed to scrawl a business plan onto a napkin to raise funds. E-commerce companies were the darling of the Chinese VC market; for every Zappos or Groupon in the U.S., there were thousands of Chinese copycat companies vying for domination.

Why did the bubble burst? David Chao, co-founder and general partner at DCM, said that while the Chinese economy has stagnated (the GDP growth rate slowed down significantly in the second half of 2011), international funds are reallocating some of their investments back to the rebounding U.S. market. DCM, an early stage VC firm has been investing in Chinese companies since 1999, recently taking Chinese companies like Renren, Dandang and Vipshop public in the US.

Additionally, a series of recent accounting scandals in China, leading to trading halts and lawsuits, has kept investors at bay.

“Accounting fraud committed by some Chinese public companies and corporate governance issues have made foreign investors lose confidence in Chinese concerns,” said Chao.

Investors point the finger at management teams in China, who did not set expectations and prioritize investor relations during the height of the IPO frenzy.

Still, both Chang and Chao remain cautiously optimistic about the long-term investment prospects.

The economy will bounce back when investors see a world-class company go public in China. Chang points to several start-ups that are poised for success: Vancl, the Chinese equivalent of Banana Republic, recently received a sky-high valuation recently; while 360buy, another e-commerce company, raised $1.5 billion in 2011, and continues to dominate the market.

According to Chao, entrepreneurial zeal has not abated and there is still a buoyant market in China.

“We think smartphone and iPad, health IT services, and cloud-related deals in China continue to be very interesting places to look for deals,” he said.

Shanghai skyline photo via Arend Vermazeren/Flickr

Law offices bring to mind power suits, closed-door corner offices, serious conversations, and clients getting billed for every minute of advice. Collaborative work spaces with lounges, foosball tables, communal desks, and fun networking events are the bailiwick of hoodie-filled startups. But what if a law firm started acting like a startup?

Wilson Sonsini Goodrich & Rosati, one of Silicon Valley’s top law firms for startups, is trying to be a bit more like the hip, lean companies it represents by opening a new open and collaborative workspace in San Francisco’s tech-heavy SOMA district.

“One of the goals is for it not to look like an office you’d expect to see us in. Look more like the kind of space our clients are used to working in,” partner Todd Carpenter told VentureBeat.

Partners Mark Reinstra, Rachel Proffitt, and Carpenter (pictured above, left to right) gave us a tour of the raw space ahead of their move-in. The bright ground floor office is mostly one big open space, with large street-facing windows, exposed brick walls and thick wood beams, a spot for the aforementioned foosball table and lounge, and a handful of offices with doors for confidential meetings. It’s in walking distance of many of San Francisco’s big tech players, as well as AT&T Park, the new Lucky Strikes bowling alley, and hipster chicken-and-waffle eatery Little Skillet.

The office will serve some traditional lawyery purposes — clients in the area can come in to meet with their attorneys. But the plan is for it to act more as a community hub where entrepreneurs, lawyers, angel investors, and venture capitalists can mingle and maybe even make deals. It’s not just for clients, but for any lean-startup entrepreneur who could use some advice (a.k.a. potential clients).

“We change as our clients change, and right now they are raising small amounts of money very quickly, from a totally different subset of investors than they were ten, twenty years ago,” said Proffitt. “We need to be in a place to help them.”

More and more startups are doing things on the cheap — getting smaller infusions of capital, working in the cloud and without a pricy central office space. Wilson wants to step in and help these lean startups with facilities for board and client meetings, presentations, or just a place to plop down and get some work done. The partners also plan on hosting bi-monthly events, workshops, office-hours, and other events that are “designed to bring the community together.”

This is the firm’s third Bay Area location, but the tiny satellite office will only house three lawyers full-time to start, with a revolving cast of visiting attorneys from the other offices in Palo Alto and downtown San Francisco, and no non-lawyer staff (that means they’re making their own copies and coffees). It’s a small-scale experiment (they say its in “beta”) for the 50-year-old firm, which has 180 partners total, 1,200 employees, and 11 offices in the U.S., Asia, and Europe.

In a classic startup touch, the partners are in negotiations for a large stuffed grizzly bear for the space.

NOTE: Names have been changed out of respect for “Bob’s” privacy

Most people would expect the billionaire owner of an NBA team to be kind of a jerk.

While I had spoken to Bob on the phone some months before and he seemed like a nice guy, I was still taken aback by the email that popped up in my inbox.

“Hi Francisco, I’ll be in L.A. next week and would love to get together. I’ll have a car and can drive to you if that’s easier for you.”

I thought back to all the random jokers who expected me to drive in from the suburbs or showed up late for appointments and could scarcely believe that this master of the universe was offering to drive out to meet me.

That was last September and I’ve spent the past eight months thinking about how Bob treated me, how he treated the waiter at breakfast, and how modest and down to earth he was.

I thought about what a stark contrast he was to so many of the self promoters that pass for heroes in the tech community.

Have we just been fooled by charlatans skilled at wrapping themselves in disguises of character, or does the fault lie with our own choices of who and what we believe worthy of respect?

As much as I’d like to point fingers at those that I consider imposters, I believe the fault lies in our own failure to discern actual strength of character from those who are simply skilled at self-presentation.

I once gave a talk at Harvard Business School where I asked the students, “Why are you friends with the people you’re friends with? Is it because they’re rich?” They all shook their heads “no.”

I’d like to think that their answer applies to all of us; and if I’m right, why then do we choose our friends based on qualities other than wealth while we seem to choose our heroes based almost entirely on wealth?

Shouldn’t our heroes be held to at least the same standards as our friends when it comes to character? Or has money become the great cleanser that can wash away transgressions of selfishness and vanity?

As much as I think it’s wrong to idolize money alone, I suppose it’s better than blindly looking up to inexplicable traits of popularity.

Just because someone is good at performing on stage at conferences or blogging about the secret to working less, being thinner, or acting bolder, doesn’t mean they are deserving of our respect. Who are they and what have they really accomplished beneath the veneer of claimed expertise?

There’s a scene at the beginning of Schindler’s List when the main character, Oskar, is still a proud Nazi seeking only to profit from the plight of the Jews. He says, “I’ll do what I’m good at, not the work! Not the work! The presentation.”

Today it seems as though “the presentation” is the only thing that matters and that popularity for the sake of popularity is enough to make you a person of honor.

Some of you are probably wondering what this has to do with technology or entrepreneurship. For better or for worse, much of the nation and the world look to the technology community as a beacon of the future. Unlike other industries such as oil, tech is seen as relatively pure and uncorrupt. Many feel we hold the keys to economic revival.

It isn’t unreasonable to reject these labels since none of us actually asked to bear such a heavy cross. But if we are to lead the way, I believe what and who we admire set the path for what we do. If we continue to worship at the altar of personality over character, then we should also face the truth that any admiration of the tech world as being somehow better is nothing more than a case of the blind leading the blind.

Perhaps this post is unfair and I’m simply projecting my hopes for the technology community on to everyone. Perhaps I expect too much. I am, after all, only “in tech” because I believed this was the best place to find smart people. Perhaps I was wrong.

Or, as entrepreneurs, perhaps we should hold our heroes to higher standards of character.

Francisco Dao is the founder of 50Kings, a private community for technology and media innovators. He is a former leadership columnist for Inc.com, a lifelong entrepreneur, author and former stand-up comic.

Top image courtesy of olly, Shutterstock

It’s conventional wisdom (and true) that an entrepreneur who has failed is often better for the experience. But failing badly can hurt your reputation and, in the worst case, saddle you with personal liabilities. We’ll address two major sources of trouble: Unpaid payroll taxes and fiduciary duties.

Pay the Payroll Taxes!
Fortunately, officers and directors of a failing company usually are not liable for the company’s debts. There are some exceptions, and it is crucial to be aware of them. The major exception is payroll and withholding taxes. The responsible officers of a company are personally liable for these. You must pay the payroll taxes and you must pay any amounts withheld from employees’ wages. The government will pursue this liability aggressively. Another exception is employee claims for wages, severance, sick pay, vacation pay, and holiday pay. In some circumstances, corporate principals can be liable for failure to pay employees. Paying your employees their final paychecks (and paying the government the related taxes) will avoid these liabilities.

Notice Conflicts of Interest and Deal with them
You’ve probably heard of fiduciary duties. Directors and officers of a company owe them to the company and, in certain circumstances, its shareholders or creditors. In a growing company, fiduciary duties are usually (and rightly) far down the list of concerns for the officers and directors. That changes when you’re shutting down or selling at a price that won’t make everyone happy. First, when people are unhappy (and especially when some people are more unhappy than others), they tend to point fingers and find fault. Second, a struggling business often makes desperate deals to keep going. These deals can involve difficult conflicts of interest.

Fiduciary duty is a simple concept: When you agree to act in someone else’s interest rather than your own, you have a duty to do just that. The problems mostly concern conflicts of interest rather than outright dishonesty. The law recognizes that people’s decisions are strongly but unconsciously influenced by self-interest. So if you make a corporate decision in which you have a personal interest, the law usually assumes that you decided in your favor and against the corporation’s interests, even if you don’t think you did. The trick is to notice conflicts and find a way to take yourself out of the decision or get someone disinterested to help with it in advance.

So as you wind down, keep a look out for conflicts: the “circling the drain” convertible debt round from a few principle investors, the sale of the company’s IP to one of the founders who’s willing to put up some cash for it and then have another try at commercialization, the sale of the company that will get some money to the preferred stock but none to the common.

We’ll spare you the hellish legal detail. Get good legal advice if you’re facing a conflicted decision. But two simple rules can save you a lot of legal bills:

Get Consensus
First, try to get consensus, after complete disclosure. If everyone knows what’s happening and agrees, it’s hard for them to complain later. There are two major problems with this approach. First, it’s hard to get consensus. Try. Don’t assume that people want to fight. There’s usually not much at stake, and most of the people involved are repeat players — this isn’t their last rodeo and they care about their reputations. If you can’t get everyone, it can help to get nearly everyone, if you get the most likely troublemakers.

The second problem with getting everybody on board is figuring out who “everybody” is. In a faltering startup, “everyone” usually means all shareholders (preferred and common) and all lenders (e.g. convertible note holders). You might want to reach out to other known creditors, such as landlords. Think expansively. You’re trying to cover yourself. So the old adage that it’s better to ask forgiveness than permission doesn’t apply.
If you’re going for consensus, get a lawyer. The point is to make sure people can’t complain later, so it’s important to get the wording and procedure right.

Stay Independent
The old adage “He who pays the piper calls the tune” doesn’t apply to corporate fiduciaries. Directors and officers talk about answering to the shareholders, but the law is clear: They make their own decisions in the interests of the corporation. Corporate directors don’t take orders from anyone. Corporate officers answer only to the board and superior officers.
In normal times, this point is theoretical. If directors and officers don’t listen to major shareholders, they’re replaced. When the going gets tough and the participants’ interests diverge, however, deciding independently can be crucial. A majority shareholder who wants to buy the corporate assets for nothing may scream at you that you have to do what she says because she controls the corporation. So remember that the very worst that shareholder can do to you is remove you from office. If you think about it, that’s usually a reward, not a punishment, in the context of a failing business. With a good employment contract, you might even snag a payday as you leave. By contrast, giving in could get you sued. It will feel uncomfortable, but stiffen your spine and act the way the law expects: Decide independently.

This gets us to the final question of shutting down a business. How do you wind everything down?

Four Ways Out
There are four ways to close up shop. We’ll give a general idea of how things work, but this is not a safe DIY project. Get a lawyer to help you.

1. Walk Away. One way to deal with a failed company is to walk away. If the company has minimal assets and minimal creditors, this approach can work. But if there are assets or creditors, it can leave the directors with liability (for failing to do their jobs), so it is not desirable.

That brings us to the other three ways:

2. Bankruptcy. Bankruptcy is a court proceeding. In a “chapter 7” bankruptcy, a trustee takes over and liquidates. In a “chapter 11” bankruptcy, management remains in control under court supervision. The benefit of bankruptcy is that it stops all lawsuits and creditor collection. It also allows the company to sell assets free of liens and creditors’ claims, which can increase the sales price. Bankruptcy also allows the company, with court approval, to assign certain contracts without the other contracting party’s consent. Finally, shareholder approval is not required to file bankruptcy or to sell assets in the bankruptcy. The downside of bankruptcy is that it can be a long, expensive, and bureaucratic process.

3. Assignment for the Benefit of Creditors. Assignments for the benefit of creditors (“ABC’s”) are similar to bankruptcy. In California, an ABC is a private proceeding, so no court is involved. In an ABC, the company transfers its assets to a neutral third-party in trust for creditors. The assignee sells the assets and pays the proceeds to creditors. ABC’s offer speed and flexibility. The ABC and the assignee’s asset sale are often simultaneous, avoiding any interruption in an ongoing business and preserving the going concern value. An ABC also usually costs much less than a bankruptcy. Finally, there is much less publicity. On the downside, an ABC requires shareholder approval, which can be cumbersome, and the assignee can’t sell the assets free of claims. So an ABC is best if there’s a buyer willing to proceed without a 363 sale.

ABC’s are often used to sell the company’s assets to insiders. Insider purchases raise red flags because they involve divided loyalties. The officers or directors of the seller have a duty to maximize the sales price. But if the same people are also buying, they have an incentive to underpay.

Accusations of a breach of fiduciary duty are a definite risk. An insider buyer can sometimes inherit some of the failed company’s liabilities as a “successor” to its business, if the buyer is a “mere continuation” (i.e. basically the same people using the same assets to operate the same business), or if the transaction is for the fraudulent purpose of escaping the seller’s debts.

Finally, a buyer of assets from a failed company can be exposed to claims to claw back the assets as a fraudulent conveyance. Under fraudulent conveyance law, the failed company’s creditors or its bankruptcy trustee can claw back assets transferred for less than reasonably equivalent value when it was insolvent or lacked adequate capital. The reach back period is two years under bankruptcy law and can be as much as six years under state law. Value is arguable, so fraudulent conveyance law enables the company’s creditors to surface with claims years later.

An ABC with an independent assignee can help address these concerns because the assignee can independently evaluate the fairness of the insider transaction. The assignee can market the assets to other bidders or get an appraisal to validate the price offered by the insiders. Finally, the ABC insulates the buyer against fraudulent conveyance claw backs. An ABC does not offer as high a degree of protection as a 363 sale in bankruptcy but often will be good enough, especially where the sales price is not high enough to justify the expense of bankruptcy.

4. Dissolution. Dissolution means the corporation distributes its assets and ceases to exist. Dissolution (without a prior bankruptcy or ABC) is best when there are enough assets to address known liabilities. We’ll discuss dissolution under Delaware law (which governs most venture-backed startups), but remember that state laws and company documents vary.

There are two basic ways to dissolve a corporation: The board can dissolve by itself, or it can get court approval. Either way, the goal is to pay all known claims, provide for disputed and uncertain claims, give notice to anyone known to have a potential claim, and wait some time for claimants to appear. You always have to wait at least three years before you’re done, but the actual work is usually quicker.

Most liquidating corporations, especially failing startups, don’t go the court route because it’s expensive and slow. The advantage is that court approval can insulate the directors and shareholders from claims they improperly distributed the corporation’s assets and can force resolution of potential claims. But a contested dissolution can be as slow and expensive as a bankruptcy, and bankruptcy provides better protection.

The Confidence to Move On
No one enjoys failing. But doing it right can avoid future problems and enable you to move on. As you start your next venture, you want the freedom to keep your eyes on the road ahead and the horizon beyond, not the rearview mirror.

Ethan Stone is a transactional lawyer, focused on early-stage entrepreneurial companies. He represents clients in company formation and financing (company and investor-side), mergers and acquisitions, technology transactions, executive employment agreements and other transactions. He writes the Stone Business Law Blog.

Bennett Young is a partner at Jeffer, Mangels, Butler & Mitchell focused on insolvency matters. He represents financially distressed companies, their investors and creditors in workouts, restructurings, bankruptcy and related litigation. He also represents buyers of distressed companies.

[Top image credit: mypokcik/Shutterstock]

“It’s people. Soylent Green is made out of people. They’re making our food out of people. Next thing they’ll be breeding us like cattle for food.”
Detective Thorn, Soylent Green

By its very nature, entrepreneurship involves a certain amount of throwing spaghetti against a wall.

Our “spaghetti” is called a minimal viable product, and we launch them because nobody really knows what’s going to stick. Eventually, with a little luck and learning, we’ll become better chefs, and our spaghetti will stay up more often than not.

But while watching a recent demo day for one of the countless incubators that have sprung up in the last 18 months, I was struck by a horrifying revelation. The incubators weren’t “training chefs” at all. The entrepreneurs were the spaghetti.

While the decreasing cost of launching a startup has been almost universally celebrated, one of the downsides has been a flood of would-be entrepreneurs into the Internet space.

As market forces dictate, when there is an overabundance of a certain resource, the value of that resource decreases. Eventually, a plentiful resource reaches a point where it becomes cheaper to consume and replace it than to reuse and repair it.

For many incubators, entrepreneurs have reached this point. There are now so many people out there trying to build the next app or website that it has become a better bet to throw minimal viable entrepreneurs against the wall than it is to teach them how to throw their own spaghetti.

Another characteristic of markets is that value accrues to the scarcest resource. But what resource are most of these incubators bringing? Money?

In the current frothy market, money is relatively easy to raise for qualified entrepreneurs. For those with lesser qualifications looking for an advantage, incubators are often touted on the basis that they are a launchpad to greater success.

Unfortunately, the track records of many of these incubators and accelerators don’t hold up. According to a 2011 study by Aziz Gilani for the Kauffman Fellows Program, 44 percent of seed accelerators had never seen a single company raise an institutional round of financing.

How about expertise? It is fairly standard practice for incubators to advertise huge rosters of mentors, but I can’t help but wonder how available or effective they are. In many cases, they seem like little more than the photos of fit personal trainers on the wall at the gym. The trainers look great, while the people working out are still flabby and out of shape because they don’t actually get much guidance.

Obviously, incubators run the gamut of quality. Only an idiot would suggest that programs such as Y-Combinator and TechStars aren’t legitimate. But what about the rest? At second- and third-tier incubators, the question of their value becomes increasingly difficult to justify.

For example, one new incubator in Los Angeles plans on graduating over a hundred “companies” annually. To give you an idea of how absurd this is, the largest angel network in Southern California receives fewer than 1,000 raw pitches per year. This includes crackpot, non-tech-related pitches. When you factor in the competition for talent posed by more credible programs in the area, it simply isn’t possible to find more than 100 solid teams to incubate from this pool. With such massive throughput, how much guidance and training is each team actually receiving?

Here’s the bottom line for would-be entrepreneurs: If you’re considering an incubator, think about what you’re getting for your 5 percent or 10 percent in equity. Ask yourself if the program will really improve your situation or, like an art degree from state college, the presumed mentors and experts in the program are really just selling you on a worthless credential.

Much like Detective Thorn’s horrifying discovery that Soylent Green was actually made out of people, the recent incubator boom masks a similar dirty secret. At many of these places, entrepreneurs aren’t being trained as chefs as much as they are being turned into spaghetti and tossed against a wall while the incubator starts boiling another batch.

Francisco Dao is the founder of 50Kings, a private community for technology and media innovators. He is a former leadership columnist for Inc.com, a lifelong entrepreneur, author and former stand-up comic.

Before signing up for your local startup accelerator or incubator, there are a few things you should keep in mind. Is your pitch perfected? Does it matter which group you join? Is there a right or wrong time to sign up? We asked these fifteen entrepreneurs for their nuggets of advice on navigating the world of startup accelerators.

Do your research to find the right fit

You should do your homework on any accelerator you’re considering. What do they offer? What are some of their success stories? What happens to companies that don’t succeed? How often do their teams get funded? Depending on the accelerator you join, you’ll get very different answers to those questions. Make sure to not only talk to the accelerator but also past companies, both successful and not.

Jason Evanish (@Evanish), Greenhorn Connect

Don’t be a perfectionist and accept the guidance

I think these groups are really important to early-stage startup attempts — the mentorship, community, and exposure they offer far outweigh any equity you might share with them in return. Don’t get caught up in trying to build something perfect; focus your efforts on customer development and proving your assumptions, so they can help you move that learning into a solid first product.

Derek Shanahan (@dshanahan ), Foodtree

Accomplish something on your own first

After having a detailed discussion with TechStars graduate and Contently.com co-founder Shane Snow, my takeaway was to have built an impressive resume of personal accomplishments to show you’re capable of actually building a real business. Incubators and accelerators want to train entrepreneurs, but they need to make sure you’re coachable and have actual potential to become a real star.

Danny Wong (@blanklabel), Blank Label Group

Be prepared to immerse yourself and go all in

You need to dedicate your time into this — it’s an endeavor that requires focus 24/7. Also, look at the opportunity as a time to find the right co-founder, strategic partners, and to be honest and upfront with the organizers about what you need. The more you give, the more you get!

Ash Kumra (@AshKumra ), DesiYou

Prove that you are committed

Demonstrate commitment and focus on results; incubators and accelerators invest in people and teams more than markets. It’s important to have a disruptive idea, but the drive and capabilities of the team are much more correlated to success than the size of the market or details of the business plan. They want to see a smart, dedicated team that is passionate about executing.

John Harthorne (@jharthorne), MassChallenge

Don’t settle for any incubator, find the best

If you are thinking of applying to an incubator or accelerator, be sure to find the best. Even if you have to give up a larger portion of your company, it will be worth it for the amount of growth it will help you with in comparison to a lesser organization. Also, look for synergy and people whom you work well with — you want to feel welcomed into your new home.

Louis Lautman (@louislautman), Young Entrepreneur Society

Make sure your goals match up

All incubators and accelerators are not created equal. Some incubators focus on landing funding, others focus more on helping you build a revenue-generating firm. Make sure your goals align with that of your program.

Doreen Bloch (@DoreenBloch), Poshly Inc.

Reach out to alums

Before applying to an accelerator program, I would talk to alums of the program to make sure they had a good experience. It also might help if you could get some time to validate your idea for a business before jumping into one of these programs. Make sure the “proof of concept” even makes sense.

Patrick Curtis (@WallStreetOasis ), WallStreetOasis.com

Perfect your pitch

Many incubators are looking for the entrepreneur to make some type of pitch, so it’s important to practice, practice, practice. The more excited that you can make them about your concept, the higher likelihood that you will get accepted to the accelerator.

Lawrence Watkins (@lawrencewatkins), Great Black Speakers

Paint a picture of success

When creating your pitch, keep in mind that you want to convince the judges that your startup is truly going places. It’s going to be so successful that they will want to attach their name to get behind it. Show them that you’re going to be successful no matter what, so it’s in their best interest to have you affiliated with their program.

Stephanie Kaplan (@stephaniekaplan), Her Campus Media

Tell a great story

Remember, people are investing in you more than your idea. Businesses are fluid in the startup stage. Which means your personality and background is what really counts. While pedigree or experience matter, your curiosity, obsession and commitment matter more. Character trumps credentials. What’s the riddle you’re trying to solve? How have you overcome failure? Make them believe in you.

Michael Margolis (@getstoried), Get Storied

Master the art of explaining your idea clearly

Good entrepreneurs know a lot about their business and their market. But can you communicate this expertise in a way that resonates with decision-makers in the incubator and accelerator programs? Start by reading “The Art of the Start” by Guy Kawasaki and learn the “business of business communication” in the startup phase.

Kent Healy (@Kent_Healy), The Uncommon Life

Timing is everything

Think about what you aim to get out of the incubator or accelerator program in mind. People tend to assume that these are great kickstarters, and they can be, but it all depends on timing. Joining one at the wrong stage of your cycle can be feedback overload, or slow your growth in other ways. Sometimes you need to collect input and test your idea, and sometimes you just need to build.

Caroline Ghosn (@carolineghosn ), The Levo League

Don’t join on your first venture

Entrepreneurs are going to make mistakes and get things wrong more often than not. I suggest getting as much accomplished in the real world before applying for incubation. The more you can do before you need the help, the better your terms will be and the more serious they will take your application.

Lucas Sommer (@audimated), Audimated

There’s life after an accelerator

These are great opportunities, but your business must happen with or without them. It’s easy to get caught up in the excitement and the aspiration of being accepted to a “prestigious program” — after all, it’s validation that you’re on to something! But if things don’t work out, the show must go on. Your goal is to create a company, so don’t lose sight of the bigger picture.

Tony Navarro (@hoostony ), Streamcal

The Young Entrepreneur Council (YEC), an invite-only nonprofit organization composed of the world’s most promising young entrepreneurs. The YEC promotes entrepreneurship as a solution to unemployment and underemployment and provides entrepreneurs with access to tools, mentorship, and resources that support each stage of their business’s development and growth.

Image via tobimcfly/Flickr

On the surface, value propositions seem incredibly straightforward. I’d argue that this is why, in practice, they’re often given such short shrift.

In reality, getting a value proposition right requires some focused thinking and structured analysis, some of which I’ll preview here. Given my particular background, much of what I recommend will have a bias to B2B startups — though, in many instances, I think that you’ll find applicability to virtually any endeavor.

I recently lectured to a group of students and aspiring entrepreneurs as part of my series of talks at the Harvard Innovation Lab (feel free to presentation slides). For this particular session, we examined the DNA of a value proposition by stripping it down to its foundational elements and reassembling it, workshop-style, around a variety of new business ideas.

But before we dig in, let’s define a value proposition.

In its simplest terms, a value proposition is a positioning statement that describes for whom you do what uniquely well. It describes your target buyer, the problem you solve, and why you’re distinctly better than the alternatives.

One of the classic mistakes of building a value proposition is diving headlong into the solution definition phase before really understanding the problem you’re looking to solve. To understand whether it’s a problem worth solving, I recommend exercising four U’s:

• Is the problem unworkable? Does your solution fix a broken business process where there are real, measureable consequences to inaction?
• Is fixing the problem unavoidable? Is it driven by a mandate with implications associated with governance or regulatory control? For example, is it driven by a fundamental requirement for accounting or compliance?
• Is the problem urgent? Is it one of the top three priorities? In selling to enterprises, you’ll find it hard to command the attention and resources to get a deal done if you fall below this line.
• Is the problem underserved? Is there a conspicuous absence of valid solutions to the problem you’re looking to solve? Focus where there’s whitespace, not scorched earth.

Problems worth solving yield a decisive “yes” to the majority of these questions.

Next, ask yourself whether the problem is blatant and critical. Problems that are blatant and critical are far more acute that those that are latent and aspirational. Blatant and critical problems stand in the way of business. They put careers and reputations at risk and whiten knuckles. Latent problems are unacknowledged, which means they often require costly missionary selling. Aspirational problems are optional, which is the hardest of places for a B2B startup to sell. Though in B2C, they can be drivers as people look for things like status or fashion.

Now that you’ve determined what problem you’re solving and validated its criticality, it’s time to define your solution. The most urgent question to ask is: What is your compelling breakthrough?

Think of 3D. What unique combination of discontinuous innovation, defensible technology, and disruptive business model are you bringing to bear and what makes it truly compelling — not just to you and your colleagues, but to your most skeptical customer?

Discontinuous innovations are the opposite of marginal improvements; they offer transformative benefits over the status quo by looking at a problem differently. Defensible technology offers intellectual property that can be protected to create a barrier to entry and an unfair competitive advantage. Disruptive business models, which are discussed in depth here, yield value and cost rewards that help catalyze the growth of a business.

Groupon is a good example of a disruptive business model that has changed the face of price-based promotions by using crowdsourcing principles to aggregate demand around deals.

As an investor, I look for non-disruptive disruptions — that is, technologies that offer game-changing benefits without requiring any modification to existing processes or environments.

When VMware popularized the hypervisor, it did so with a non-disruptive disruption—all benefit without much in the way of adoption hurdles. The same is true for Akiban, one of my more recent investments that’s innovating in database technology to yield 10-100x improvements in the speed of relational data access without any changes to applications or risk to data. That’s a non-disruptive disruption.

Non-disruption is critical because the gain you deliver will be discounted by the pain of adopting your solution, plus the inertia of vendor risk that every startup levies by virtue of being small. This means that you must deliver an order of magnitude improvement over the status quo to make the cut.

If you can’t deliver a 10x promise, customers will typically default to “do nothing” rather than bearing the risk of working with a startup. That’s the harsh truth.

Now that you’ve defined the problem you’re solving, evaluated the gain/pain ratio and discovered a problem truly worth solving, you’re in a good position to build your value proposition.

At the center of that value proposition is you. What problems do you understand uniquely well? What can you deliver uniquely well? What sort of disruptive business model can you bring to bear? Be true to yourself and play from a position of strength. A little self-awareness can go a long way in crafting a value proposition with power.

Credit is due to my colleague Adam Berrey for his thinking on the importance of segregating needs.

Michael Skok is a general partner at North Bridge Venture Partners. His investments include Apperian, Akiban Technologies, Acquia, Unidesk, and Demandware (NYSE: DWRE).

This sponsored post is produced by MicroVentures.

The new Crowdfunding laws are about to open up angel investing to almost everyone. Gone are the days where you have to risk $50,000 or more, receive a personal invitation to invest from a friend, or only see a limited number of deals from the few available in your area. The new crowdfunding laws will go into effect sometime in 2013, but what can you do to take advantage of crowdfunding right now?

MicroVentures, a securities broker dealer, has been raising money for startups online for over a year and has helped raise millions of dollars for over 15 companies by bridging the gap between startups and potential investors. They use a model similar to crowdfunding which allows you to invest smaller sums alongside others and to invest in deals stretching from Boston to Silicon Valley.

MicroVenture helps investors learn about companies they may have never heard of, and to invest smaller sums, which is virtually unheard of with traditional investing.

The service matches companies seeking capital with investors looking to invest anywhere from $1,000 to $30,000 or more. MicroVentures helps investors with the initial due diligence process by filtering startups and then providing documents to help investors conduct their own due diligence prior to making a final investment decision.

The key to becoming a successful angel investor, of course, is to invest in the right startups. To get there, you need:

1) Good deal flow, allowing you to spot potential winners from many potential options.
2) The ability to invest in multiple deals so you gain experience.
3) A knack for spotting potentially successful companies, and more importantly, management teams and entrepreneurs that will succeed.

Getting good deal flow is often the stumbling block for the average person looking to get started in angel investing. It’s also one of the reasons Bill Clark launched MicroVentures; he wanted to begin investing, but didn’t have access to good deals.

Like others thinking about becoming angels, Clark wanted to invest smaller sums in more companies, allowing him to spread his risk and also increase his chances of picking a winner. And he wanted access to great companies outside ofAustin, his hometown.

If you’d like to join the more than 2,000 angel investors getting in on new deals via the MicroVentures platform, be sure to put “VentureBeat” in the referral code when you sign up and we will send you a $100 gift card after you make your first investment.

DreamIt Ventures is also moving into the old office of Fab.com, following in the footsteps of TechStars, who took Foursquare’s former office in search of some magic startup mojo.

Five of the companies selected are part of the DreamIt Access program, a dedicated effort to launch 15 minority-led startups over the next 12 months. Comcast Ventures, the venture capital affiliate of Comcast Corporation, is an investor in the DreamIt Access program.

Additionally, five of the companies participating in DreamIt NYC are part of the inaugural class of DreamIt Israel, the first Israel-US accelerator.  DreamIt Israel helps Israeli startups expand into U.S. and Global Markets. The DreamIt Israel program is already underway in Tel Aviv, and the Israeli startups will be in New York City working alongside the companies in DreamIt NYC beginning May 14th.

The companies are:

Bazaart, Haifa, Israel: personalized fashion catalogs for tablets

CallTrackingFox, New York, NY: data-driven inbound marketing platform

CampGurus, New York, NY: clearinghouse for kids programs

Cubiez, Tel Aviv, Israel: platform delivering desktop apps with a mobile user experience

FirstCrush, Boston, MA: personalized wine subscription service

Giver, Tel Aviv, Israel: turning employees to community through gamified solutions

Indiewalls, New York, NY: online marketplace connecting local artists and venues

JustUs, Tel Aviv, Israel: Weesh app helps romantic couples share mutual experiences

Saborstudio, Alajuela, Costa Rica: location-aware mobile games

Tripl, Stockholm, Sweden and New York, NY: connecting people through travel

Urban Cargo, New York, NY: personalized grooming product recommendations for men

Vantageous Video, Ithaca NY: apps for multi-angle video creation

Winston, Boulder, CO: a personalized social newscast

The most successful companies are ones that are never satisfied with the status quo. They are too busy looking for ways to improve their products, personnel, and experience for their customers.

There are many approaches a company can take to improve itself. For us, it meant trying something revolutionary that would arm our employees with a new skill set, bring our technical and non-technical teams closer together, and provide the entire company with a deeper understanding and appreciation of what we do.

To accomplish this, we set an ambitious goal of having all of our employees learn how to write code in 2012.

Three months ago, we announced to our 60-person company that each employee was going to learn how to code in 2012. We named the initiative the “Codinization Project”. After the initial moments of surprise in the room faded, I explained to our employees the reasons why we were undertaking this initiative.

As leading technology companies have shown time and time again, being smarter than the competition and building superior technology is the only way a company can succeed over the long term. We felt that this Codinization Project was the challenging yet necessary step we needed to build a deeper understanding across the company of the intricacies of our technology platforms and products. If we could equip our employees with a solid foundation of knowing why our products do what they do, the more intelligent they would become in every element of our business, from product planning to client communications, implementations, and customer support.

We were also inspired by witnessing firsthand an example of similar dedication. Rakuten, our Japanese parent company, has been tremendously successful in pursuing its “Englishnization Initiative” in which Hiroshi Mikitani, Rakuten founder and CEO, is having the entire 12,000-person workforce learn English.

Rakuten’s dedication and their success with this initiative showed our team that with the right training and effort, we too could push ourselves to new heights that before had seemed impossible.

Last, we were confident that the project would encourage additional communication and collaboration between our technical and non-technical departments. Our engineers would serve as mentors, giving lessons, providing training and tutoring, and answering programming questions.

With the plan and motivations laid out for the company, we began our Codinization Project.

Knowing we could not embark on a project of this scale and complexity alone, we researched available programming training resources. After careful consideration we chose to partner with the web programming tutorial company Codecademy. The Codecademy training courses are free, formatted in a user-friendly approach, and offer custom creation tools which enable our engineers to develop specific coursework relevant to our products.

In the end, it made the choice for which training resource to choose a no-brainer. I called Codecademy co-founder Zach Sims and explained what we were trying to accomplish. He was instantly intrigued by our commitment and enthusiasm. We were the first company he was aware of that was having its entire workforce learn how to code. Zach graciously agreed to come to our Boston headquarters to help officially launch this project to all of our employees, including walking through a tutorial in the Codecademy platform.

Shortly after our official rollout to the company, our chief technology officer reviewed the programming lessons provided by Codecademy and established a project schedule which takes our employees through the JavaScript language. We made sure that the training was spread out enough (just four or five hours of coursework each month) so as in not to become a burden on our employees’ already busy schedules.

To promote collaboration, we also grouped our employees into teams of four or five, with an engineer serving as mentor for each group. This ensures that no employee feels alone while working their way through the project. Employees have colleagues they can go to with questions as well as a mentor who helps provide the additional assistance and training they may need. For our engineers, it provided them with an opportunity to share their knowledge and experience, teaching their colleagues.

To keep things fun, we’ve also hosted several “coding lunches” where the entire company spends an hour or so working in their groups completing the assigned coursework for that week. The employees enjoy the break, and it provides an opportunity to work through the lessons together, having their questions answered and being able to learn from each other.

We are also in the midst of rolling out additional monthly training sessions facilitated by our engineering team for any employee who wishes to receive more training on the subject matter being covered that month.

While we’re only three months into the Codinization Project, I am already noticing the impact the project is making. The dialogue and questions I am hearing from both the “learning” and “mentoring” sides has been inspiring to me. Technical and non-technical employees are enjoying working together to help raise the company’s collective product knowledge and understanding.

It’s also brought together teams that otherwise might not have had the opportunity work together. The Codecademy platform has met our initiative’s needs, providing non-technical employees with engaging, appropriate training lessons to introduce them to the JavaScript language.

I have faith in our team that we will succeed, and I am excited to watch our progression through our Codinization Project. With that in mind, I better go… I’m late completing my Codecademy homework.

Michael Jaconi is CEO of FreeCause, a loyalty and rewards platform for brands and consumers. He also serves as an executive officer at Rakuten, FreeCause’s parent company and one of the world’s largest Internet service companies in the world. While Jaconi possesses an extensive background in business, politics, and media, the Codinization Project represents his first foray into computer programming.

Top image courtesy of olly, Shutterstock

Are you bursting with big-think ideas that could change the world? Can you take those ideas and actually, you know, build something tangible? If so, there’s a new matchmaker in Silicon Valley that wants to fund you, mentor you, and set you on a path to solve the specific challenges of enterprise partners.

That’s the premise of 2020, a new seed fund started by Gaye Beceren and Shani Shoham. Last week I attended 2020’s kickoff in downtown Palo Alto, where more than 250 entrepreneurs heard presenters from Cisco Systems, Nice Systems, Faurecia, and Nokia Siemens Networks talk about the challenges they hope to solve.

If this sounds like other incubators, there is a twist: 2020 isn’t looking for startups that already have a product or technology. Instead, Beceren and Shoham figure everything will fall into place once they’ve identified the right people.

“We don’t take existing startups,” Shoham told me before the event. “We are more focused on finding talented entrepreneurs, even before they have ideas.”

The fund announced today that it has started accepting applications from interested entrepreneurs.

Here’s how it works: 2020 will spend four days screening each applicant, assessing their personalities and their skills, and then testing them in a hackathon. After that, Beceren and Shoham will put together teams, give them seed funding over two rounds, and provide six months of mentoring.

“We will narrow it down to 12 teams for our entrepreneur-in-residence program, and from there it’s six months of mentoring as each team works on a specific need,” Beceren told me. “We can have multiple teams working on a specific need.”

In general, 2020 expects to invest $50,000 in each team, in two stages. New teams will receive $25,000 in the “ideation” phase, for which 2020 will receive a 10 percent stake in the startup. Teams will get the second round after they develop a preliminary prototype, for which 2020 gets an additional 5 percent stake.

“What’s unique with us is we qualify the teams,” said Beceren.  “So we lower the financial risk for the enterprises and lower the market risk for the enterprises.“

And what problems are their enterprise partners looking to solve? At Cisco, the new mantra is “focus.” Instead of the 30 adjacencies (read: anything that drives demand for networking gear) that CEO John Chambers has talked about for years, the networking giant has narrowed its focus to five priorities: its core networking businesses, collaboration, data center technologies (including virtualization and cloud computing), video, and smart communities.

“What we care about right now is new business models,” said Chris Thompson, senior director of business incubation and emerging technologies at Cisco. “When you think about technologies, think about those five areas.”

Nice Systems wants to make it easier for call center customers to monitor and interact with customers over both traditional and social channels.  (A message we’ve been hearing for a while from Salesforce.com, among other CRM vendors.) As a result, Nice wants entrepreneurs who understand the issues of big data, cloud-based infrastructures, predictive analytics, and reducing call-center costs, said Paul Melmon, vice president of engineering.

Chances are, you’ve never heard of Faurecia, among of the world’s biggest automotive parts suppliers. “We are like the Intel of the automotive industry, minus the branding,” Faurecia’s enterprise-in-residence Steffen Bartschat told the audience.

Faurecia’s goal: To find innovations in other industries that enable cars that are smaller, lighter, more efficient — yet forge an emotional connection with their owners.

At Nokia Siemens Networks, the challenge is the cloud, said Tuuli Ahava, head of Nokia’s Silicon Valley Innovation Center.

Entrepreneurs will learn more about each partner’s specific challenge during the vetting process, sad Beceren. The fund will begin accepting applications in the new few days.

Beceren and Shoham are still acquiring investors, but expect to start with a $10 million fund, eventually growing to $40 million.

Lerer Venture’s CEO summit brought together the heads of all the Lerer Ventures portfolio companies, along with a number of bankers, investors and journalists. There were panels and demonstrations. The aim was to strengthen the Lerer network through an exchange ideas and best practices. How do you fire someone who’s not working out? What’s the best way to keep a company culture intact as you scale past 100 employees? Will the Mets ever win another World Series?

Hacking Society was a gathering of 40 investors, entrepreneurs and thinkers (mainly academics). They were there to discuss big ideas. How the economics of networks might help solve challenging social and economic problems. How incumbents use their influence over the current policy process to stave off competition from networks. Define a proactive, network-friendly “Freedom to Innovate” policy agenda and examine how “net native” policy advocacy works and how it can be harnessed to promote a positive agenda as well as overthrow bad policy and bad regimes.

Both events were impressive in their own way. Lerer Ventures is only a little over two years old, yet they have a broad portfolio of over 106 companies that have created over 1700 jobs, mostly in New York. Politicians have noticed. Mayor Bloomberg made a special appearance at the event and even fielded questions from the founders on how best to run their startups. A number of the CEOs I chatted with praised Lerer’s network, which now provides in house PR, design and community support to its portfolio companies. Disruption was a theme, to be sure, with Brian Bedol, the veteran TV executive behind Bedrocket and Planet Daily, giving a stirring speech about the changes that were coming to the television industry.

Over at Union Square, the talk was also about disruption, but at a much larger scale. As Fred Wilson wrote today, investing in web companies has been the smartest, most capital efficient strategy for VCs over the last decade. But on a personal level, he believes capital needs to flow elsewhere. “Where has USV invested our investors’ capital for the past eight years? It’s not even a contest. Internet and mobile wins hands down. But internet and mobile will not and can not solve all of society’s problems. We need new medical approaches to preventing and/or curing disease. We need new scientific approaches to generating, storing, and being more efficient with energy. Maybe we need more space exploration. Maybe we need more undersea exploration.”

USV’s Hacking Society was largely concerned with how the powerful networks built on the web, many of which are in its portfolio (Twitter, Tumblr, Kickstarter, etc) can be used to effect politics and societies at scale. Wilson and his co-founder Brad Burnham were two of the earliest and loudest opponents of SOPA. Its no surprise that Alexis Ohanian of Reddit was at the Hacking Society event. This is a group interested not just in altering business as usual, but in how these new networks might change the world.

A sampling of tweets from the event:

RT @diegobeas: “Networks destroy existing institutions, and new institutions will develop on top of them.” -@timoreilly #hacksociety

— Tim O’Reilly (@timoreilly) April 24, 2012

that number should cause riots: RT @timoreilly “196 Americans have given 80% of all Super PAC money” @lessig at #hacksociety — Andrew Cove (@aac) April 24, 2012

RT @JPBarlow: All entrepreneurs want a free market when they enter and don’t want one after they win. – Luigi Zingales #hacksociety

— Andrew Rasiej (@Rasiej) April 26, 2012

As a young tech journalist, it was quite the confluence of events, a powerful reminder that disruption is more than just a buzzword in Silicon Alley. There is a still a ways to go, after all both events were populated by a majority of white, well-educated men. But it truly seems possible that New York will catch California in the production of innovative companies that fundamentally alter the status quo both here and around the globe.

Investor confidence rose sharply in the first quarter of 2012, coming in at 3.79 on a five-point scale, according to the report. This is up from 3.27 in the fourth quarter of 2011. The increase is the first time the index has risen in a year, during the 2011 first quarter.

“Confidence tends to be tied to the investors’ ability to sell their positions in their portfolio companies, whether with an IPO or an acquisition,” Dr. Mark Cannice, University of San Francisco business professor and author of the report, told VentureBeat. “There has been a really big spike up this quarter. It’s hard to tell if this is going to be an ongoing trend up or a one time event, but [the jump] is significant.”

2011 was a dismal year for investor confidence. At the beginning of the year, the confidence index was at a two-year high of 3.75. But during the following three quarters, it hit a slump and ended the year at a nearly two-year low of 3.27.

“The first quarter was a pretty good quarter for IPOs, and that tends to support confidence with investors,” said Cannice.

He also noted in the report that venture capitalists attributed their raised confidence to “a more welcoming public financial market that is providing more liquidity opportunities for their portfolio firms.” Zygna, LinkedIn, Yelp, Groupon, and Angie’s List all filed initial public offerings this year.

“Capital markets are showing sustained momentum; nothing beats the prospect of liquidity, and there’s an overwhelming sense of optimism, which is what’s in fact needed and should be self-fulfilling,” wrote Dag Syrrist of Vision Capital.

Facebook’s upcoming IPO has also raised excitement in the investment community, because Facebook’s investors will benefit greatly when the social network goes public, said Cannice.

Another major factor that inspired confidence is the recent technological advancements in the mobile, social, and cloud industries. The iPhone and Facebook have paved the way for new services and products, venture capitalists pointed out in the survey. Mobile devices have helped especially because they are transforming commerce, communication, and socialization.

“It remains a fertile market for entrepreneurs to launch new projects with ready access to capital and opportunities to capitalize on the disruptive trends in the cloud computing, mobile Internet, and social media sectors,” Jeb Miller of Jafco Ventures said in the report.

Investment confidence continued to fall in life sciences, which Cannice tells me has been on the down turn for a long time now. FDA regulations have hurt the life science industry, because they stifle fast growth.

Image of happy guy throwing money via Shutterstock

This Sponsored Post is produced by the Telecom Council of Silicon Valley.

Innovative companies are increasingly important to the telecom industry. With some startup exits topping a billion dollars, interest is at a fever pitch. And at the upcoming CTIA Wireless 2012 conference, May 8 – 10 in New Orleans, many startups and solution providers will gather to present their wares. And to ease conference attendees’ access, many startups will be concentrated in an easy-to-visit pavilion focused on the innovators in wireless telecommunications. In a joint effort with The Telecom Council of Silicon Valley (the Council), the CTIA show floor will feature an “Innovation Showcase” where 25 young companies will be exhibiting their latest products and services.

“We want to facilitate relationships between the startups, and the investors and bigger companies.”, said Council President Liz Kerton. “This Pavilion offers something important to both sides: for those seeking the entrepreneurs, we’ve gathered them together in a densely packed area. For the innovators, the Pavilion helps them get the word out efficiently and meet the next round of funding and partnerships.”

Pavilions have emerged as a great way to organize a trade show, both for visitors and exhibitors. This earlier article explained how startups can simplify their workload and maximize ROI from pavilions. But good, themed pavilions are also a time-saver for conference-goers hoping to see a specific category of exhibitor. If the conference organizer already categorizes the show floor, you can save painful footsteps and costly time.

The innovation pavilion will be most appealing to wireless telecom carriers, MVNOs, large network solution providers, and equipment vendors. On display are:

• Location-based, local and payment services
• Accessory devices
• Driver safety
• SON and network equipment
• Mobile Health
• Data Tsunami mitigation
• Sound shaping
• Mobile video technologies
• Network Operations
• Connected Home
• Applications
• Device UI, voice UI
• …and more

The 24 companies in the Innovation Pavilion were selected from a pool of over 100 companies by members of the Council, including HTC, Qualcomm, Sprint, Vodafone, BT, Ericsson, nVidia, China Mobile, Translink Capital, Norwest VP, Docomo Capital, PARC, Plug and Play Tech Center, and more. The bases of qualification were: innovation, momentum, viability, and management.

You can see all the early-stage companies at the Pavilion located at Booth 4251, or as they present on the main stage on 5/8 3-4:15pm and 5/9 12:30-1:30pm.

Newvem, an Israeli startup we wrote about recently, aims to help startups by showing them exactly how they are using AWS and where they can save money. So take with a grain of salt their new study which shows rampant inefficiencies among the average AWS user.

Looking at dozens of customers running Newvem, the company found that small startups, the ones for whom cash is typically a big priority, are spending money on Amazon that they don’t need.

For customers with a monthly budget of less than $1,000 on Amazon Web Services, NewVem found that more than 50 percent of their rented servers were idle. This might make sense, since small startups are more likely to see big spikes in traffic and usage relative to their daily norms.

Companies who are spending more money tend to be more efficient, which is counter-intuitive in some ways . NewVem says the big chasm is around the $3,000, when companies graduate to a much bigger spend, and in this study