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December 16 2011

Top Stories: December 12-16, 2011

Here's a look at the top stories published across O'Reilly sites this week.

Five big data predictions for 2012
The coming year of big data will bring developments in streaming data frameworks and data marketplaces, along with a maturation in the roles and processes of data science.

A war story, a Kindle Single, and hope for long-form journalism
Instead of walking his latest long-form story door to door, freelance journalist Marc Herman decided to blaze his own trail — he published the story as a Kindle Single. In this interview, he talks about the Kindle Single experience and offers his take on the future of journalism.

You can't get away with a bad mobile experience anymore
Mobile used to carry built-in caveats around speed and design, but those excuses are now wearing thin. In this interview, Strangeloop's Joshua Bixby examines the evolution of mobile expectations and how companies should adapt.

An angel who bets on women-led companies
Joanne Wilson discusses becoming an angel investor, how investors can help change the ratio of women CEOs, and the Mars versus Venus approach to entrepreneurialism.

Where is the OkCupid for elections?
What will be the "OkCupid for elections" in 2012? Open-source app OkCandidate.com offers one approach, and startup ElectNext is applying data analysis with an issue-matching engine.


Tools of Change for Publishing, being held February 13-15 in New York, is where the publishing and tech industries converge. Register to attend TOC 2012.

December 12 2011

An angel who bets on women-led companies

Blogger, mother, foodie, and hardcore New Yorker Joanne Wilson (@TheGothamGal) is one of a few female angel investors. Her approach to investing is unabashedly women-centric. And as she explains in the following interview, she's a believer in the power of the startup ecosystem to influence the economies of New York and beyond.

What inspired you to move into the venture capital (VC) space?

Joanne Wilson: I call myself an angel rather than a VC because I'm doing this by myself. And I am a woman doing this by myself in this space, which I know is not the norm.

I've been involved in startup businesses throughout my whole life, and I had gotten off the train for a while. Being home with my kids, I started blogging in order to stay connected to the Internet industry and not lose my credibility. That was eight years ago.

I was closely watching all of the new companies in the space we began to call Web 2.0. One of them was Curbed, and I heard they were looking for funding. I was at a point in my life where I realized I was ready to do something, and I felt like I could add value there. So, I called Curbed founder Lockhart Steele and said I'd be very interested in funding his company. After that, the cat was out of the bag. Everyone came running in the door.

In the beginning, I was thinking of funding one, maybe two startups. But, as my husband [VC Fred Wilson] says, "Your problem is that you wouldn't want one lemonade stand; you'd want 1,000 of them."

What's the difference between an angel and a venture capitalist?

Joanne Wilson: There are three rounds as a company begins. The first is seed, where you have a wonderful idea and need to get things rolling. For that, you go to your family and friends. Then, as the idea gains traction — you build a website, a community, and realize you could really grow it — that's when angels like me come in. I invest in the round after seed, helping it get to the third round.

VCs are in the business of growing businesses. They bring in seasoned players with a different kind of skill set. A VC will be with a company through many iterations of investments. Angels, on the other hand, usually leave the space once the VCs get in. Angels become more of a friend and a consiglieri to the entrepreneur at that point.

Is an angel someone who gives as much advice as money?

Joanne Wilson: No. I'm not normal in that respect. I get really involved in these businesses. It's not like I call them, but if they want to call me every day, I am happy to answer any questions. If I don't know the answer, I'll find it out for them. I open up my Rolodex and think about the big picture. I'm pretty accessible, and I want them to reach out to me.

You called yourself a "chick magnet" at Web 2.0 Expo. Do you think your accessibility is one of the main reasons why women founders seek you out? How do you get "found"?

Joanne Wilson at Web 2.0 Expo 2011
Joanne Wilson (left) judging the Startup Showcase at Web 2.0 Expo NY 2011.

Joanne Wilson: One of the topics that I always come back to in my blog has to do with being a woman and how you can do it all, just not all at the same time, and the frustrations of balancing life and family. I think that topic resonates with a lot of women out there. I also have put the majority of my investments into women-led companies. I'm a big believer, but this whole nonsensical thing of not enough women in tech, not enough women CEOs, not enough women on the board — guess what? If we invest in women entrepreneurs, we'd change the game because they're all CEOs. It's pretty easy to do.

I also put on a conference called the Women's Entrepreneur Festival with Nancy Hechinger, a professor at NYU's Interactive Telecommunications Program. Ten businesses were started at that conference, and many connections were made. This year, we'll have about six panels, five people on each panel and a moderator for each panel, highlighting "the makers" — community makers, taste makers, art makers. What's fascinating is that only one man has signed up to come.

Do you have any advice for angels or VCs looking to invest in women-driven startups?

Joanne Wilson: It's no different than the advice I give to kids who graduate and want to work in a startup or be an entrepreneur. There are meetups all over the city every single night. Eventually, you meet people and hear what's going on. It's a very open, embracing industry. There's a lot out there and there are a lot of bloggers writing about what's going on and about new businesses. If you can't find women-led businesses, then you're not reading the right things and you're not looking in the right spots.

I would love to see more people who have created wealth for themselves and their families take a chunk of their change and invest in women-led companies. It would be better for the economy. And, again, better for women. By the way, it's not always about women — companies should be mixed. Women bring something to the table and so do men. It's about the best ideas.

Any advice for new founders?

Joanne Wilson: For first-time entrepreneurs moving forward and going up for more money, remember to use the people you have. Engage them in your business.

Second, consider how big you want to be. You don't have to be a $1 billion business. For instance, Dave McClure is doing a really cool thing: funding 500 new startups. He's giving a lot of people an opportunity to be entrepreneurs, but they won't all be $1 billion market cap companies. You could have a nice $4-million-a-year lifestyle business in the local community, something you love to do every day. That is an amazing thing. You're making enough money to live your life and do good at the same time. Create economies, hire people, and maybe have a family. That's okay. You've got to think big picture, and you've got to think reality.

What are some of the notable companies you're involved with?

Joanne Wilson: There's a void in the market for businesses in the $50-$60 million range, where investors exit at the second round. These are not niche businesses — $50 million is significant. But, they're not $1 billion market caps. Many of the businesses that I'm involved in, women-led businesses, are at that level and going out for their VC round, which indicates that they're successful.

One of the biggest successes is Daily Worth, Amanda Steinberg's company. She has created tremendous traction and sells advertising at lightning speed, to the point that we don't have any inventory. She's done an amazing job. If she pivoted in one direction, she could be a huge, huge business.

I'm also in Catchafire. Founder Rachael Chong is about to launch a product that I think is going to change her business. That could be a massive business, surpassing $100 million.

I also just invested in littleBits. We have yet to see where that goes, but Ayah Bdeir has created a really interesting product. She was just acknowledged as a TED2012 Fellow.

Have social media or other technologies changed the way you make investment decisions?

Joanne Wilson: No. I invest in the entrepreneur, and then the business. I have to love what they're doing. Think about it like a house: when you buy a house, you can renovate it, but you can never change the location.

What do you think of some of the recent studies pointing to women-led startups tending to be more successful?

Joanne Wilson: Women say "we." Men say "I." That's both a positive and a hindrance. Women say, "What's my role here? How is this going to work for all of us? Am I doing as well as I think I should be doing?" Men don't think that way. If you ask five men and five women to be mentors, men say "Yeah, sure." Women say, "What's expected of me? How many hours do I have to put into it? Does this make sense for me?" It's different. Women run families.

Do you think the different vocabulary and thought process is part of what's hindering women founders from getting investments from mostly or all-male angels and VCs?

Joanne Wilson: No, I don't. I'm sure people would smack me for this, but going to back to the void in the marketplace for $50-$60 million businesses, I think that many VCs invest only in businesses that they hope are life changing — the $1 billion market cap.

If you look at many women-led businesses, they tend to invest in things that fill needs in their lives. The women who started ZipCar probably figured it would be great to walk outside and have a car waiting. The Apgar test and Scotchgard — these were invented by women. Fire escapes, Liquid Paper, windshield wipers, life rafts, cleaning tools for the home — all created by women. They create what they need, which, incidentally, adds up to a much bigger economy.

I would rather invest in 100 startups that will become $50 million companies and will change economies, that will change communities, that will change families. The long-tail of the Internet revolution is that there are no longer companies with one president, seven vice presidents, and then all of these different levels of people underneath them. It's over.

Is the economy changing investment trends?

Joanne Wilson: The greatest thing about our country is that the people see what's happening before the government. There's a wave of entrepreneurialism, of returning to our communities — whether it's the local grocery store or butcher, customers are having conversations with their local shopkeepers. There's something really powerful about that. It was something we had right a long time ago, and there's nothing wrong with going back to that model.

Who inspires you?

Joanne Wilson: Hillary Clinton rocks. What she has done, from being the wife of the president to where she sits now — I think she's an amazing, incredibly inspirational human being. My husband inspires me. He's fantastic at what he does. We've been partners since we were 19 years old, and we've created everything together.

In general, I'm pretty inspired by the entrepreneurs that I meet every single day. I feel incredibly lucky that I get to meet people whose synapses are going so fast I can barely keep up, who think about ways to change the way we live and to change the economy that we're in now, who think about the world at large and are figuring out how to make money, and who want to get things done quickly and efficiently. To have those conversations every day is pretty damn inspiring.

This interview was edited and condensed. Photo by Pinar Ozger.

Related:

May 06 2011

Improving the landscape for organic startups

Next Tuesday, May 10, entrepreneur Sherwood Neiss will be testifying before U.S. Congressman Darrell Issa and the House Committee on Oversight and Government Reform to advocate a regulatory change that I have been working to support: a small offering exemption, aka "crowdfunding exemption." It's a simple change that the SEC has the authority to make, and which I believe would spur grassroots innovation and empowerment the way the NSF's revision of the internet backbone's Acceptable Use Policy did back in the early 1990s. (Remember that one?)

The background (which I didn't know until fairly recently), is that any investment where the return does not depend on the investor's active, day-to-day involvement is considered a security. And securities, no matter how small, are either regulated by the SEC or state securities departments. There are no de minimis exceptions; shares in a lemonade stand would require registration, which I'm told costs $50,000-$100,000 or more (federal) or $20,000-$50,000 (state), mostly legal fees. For VC-free startups based on people doing things that they care about, these costs are prohibitive.

There are exemptions from registration, but never for investments that are described on the open web, like the donation pitches that have made sites like Kickstarter and IndieGoGo such fonts of creativity — this is prohibited as "general solicitation." Investments offered privately to friends and family can be exempt, but with strict limits on the numbers of "unaccredited" investors (non-millionaires) allowed in, like a maximum of 35.

These laws were enacted to protect unsophisticated investors from fraud, but they also prevent people from investing in small businesses in their own neighborhoods, or garage ventures launched out of communities of interest that they belong to — despite the likelihood that their personal ties to such investments gives them a better basis for evaluating risk (and contributing to success) than some mass of SEC filings cooked up in an office somewhere. And so, in the name of investor protection, the investments industry currently has a monopoly on all the invested assets of the non-millionaire public. People can't invest in the people they know from their own communities; they can only entrust their money to the choices contained in a managed menu of exclusively non-local, large-scale investment products.

As an alternative, the Sustainable Economies Law Center (SELC) in Oakland (for whom I volunteer) petitioned the SEC last year for a new exemption to cover investment offerings where individual investments are capped at $100 and the total amount is less than $100,000. The SEC posted it to their website last July 1 as File No. 4-605 (PDF). Check it out! It's a great document, written to be understandable by laypeople, and I think everyone involved is proud of how it turned out. The funding for the legal work behind the petition was itself raised through crowdfunding.

As hoped, the proposal has been bouncing around and gaining support from Republicans and Democrats alike. The SEC's comments page for the petition (which you can add to by emailing rule-comments@sec.gov and putting "4-605" in the Subject line) contains more comments than any other petition listed, all of them positive (as of this writing). Last November, when I and some other supporters of the petition attended the SEC's Small Business Forum to promote the idea, the SEC seemed interested.

Since then, Rep. Darrell Issa wrote a letter to SEC chair Mary Schapiro asking about easing regulations for crowdfunded investments, and Schapiro wrote back (PDF) to say they were evaluating the issue, citing 4-605 and our visit (see footnotes 77 and 78 in the document). Meanwhile, Florida entrepreneur Sherwood Neiss also met with the SEC to promote the idea, and published a less restrictive proposal for a small offering exemption (which also cites 4-605) at his website StartupExemption.

Neiss has also done a wonderful job of spearheading and publicizing this issue. Understanding the power of celebrity, he encouraged Whoopi Goldberg to tweet her support for his exemption proposal. The Wall Street Journal blog covered Goldberg's tweet on March 23. This reified the issue among financial journalists, who have since reported on it in Bloomberg, The Fiscal Times, The Washington Times, and POLITICO Pro. (Before Goldberg's endorsement, only the Boise Weekly had covered the idea.)

Now Neiss is scheduled to testify before Issa's committee next Tuesday, May 10th, and everyone I've been working with on this who knows is thrilled. I've read an early draft of his planned testimony, and it's terrific — a great argument with great supporting facts for a revolutionary new idea. I was excited just reading it, and in an idle moment afterwards I caught myself humming "Marching to Pretoria."

This past Monday, I called C-SPAN's main number (202-737-3220) to suggest that they cover Issa's hearing and Neiss' testimony. The receptionist told me to call back on Monday, May 9th because they don't decide what to cover until the day before. When I asked her if there was any other way to suggest coverage, she asked me what hearing I was interested in, and told me that she would pass my suggestion on to the editors. Fingers crossed!



Related:


January 19 2011

Venture capitalists embrace humor, technology and social media

twittercropStartups dreams can come true. Ben Huh and his team at Cheezburger Network have raised $30 million in venture capital. The money reportedly will be used to hire people — perhaps including a sales person, as they (impressively) don't have one.

And no, a business doesn't have to involve cats to secure venture capital. Sonian, a company that archives cloud-based data, secured an additional $9 million when corporate giant Amazon jumped onboard, bringing their venture capital total to about $15 million. Social publishing site Scribd and Perfect Market, a company that helps Web publishers monetize content, also have landed solid capital investments of $13 million and $9 million, respectively.

Huh will talk more about his company's success — and its venture into book publishing — in a keynote address at TOC. As a teaser, Huh discusses the limitations of blog-to-book publishing in the following short interview:



TOC: 2011, being held Feb. 14-16, 2011 in New York City, will explore "publishing without boundaries" through a variety of workshops, keynotes and panel sessions.

Save 15% off registration with the code TOC11RAD


December 09 2010

Strata Week: Running the numbers

Here's what caught my attention in the data world this week.

It all comes down to funding

Fifty million. That's the number of dollars investors have committed to IA Ventures, a New York City-based fund dedicated to big data tools and technology start-ups. It's quite an impressive number for a first-time fund in any economic conditions, let alone the current climate.

So how did they do it? Check out founder Roger Ehrenberg's recent blog post, in which he provides a behind-the-scenes look at his experience, including things he wishes he'd done differently. It's a nice picture of what it's like to change careers, start a fund, and learn from experience.



MathJax: Delicious and nutritious


Strata 2011Ever had a thought that couldn't be expressed in words? Wanted to put that thought on the web? MathJax, an open source JavaScript display engine for mathematical equations, makes that easier (and much more beautiful) across most browsers.

A project of the American Mathematical Society, Design Science, Inc., and the Society for Industrial and Applied Mathematics, MathJax provides top-notch mathematical typesetting without the need for special downloads or plugins. Authors can submit math content in a variety of formats (such as MathML or LaTeX), and feel confident of its proper display even in browsers that don't have native MathML support.

TeX samples, MathML samples, and scaling samples can be found on the MathJax demo page. Here's a neat screencast of how users can copy and paste equations into various applications (such as Mathematica) using MathJax:


The MathJax source code is here, and further documentation can be found here.



Statzzzz!


Not to put too fine a point on it, but Kevin Drum's "Statistical Zombies" post should be required reading for anyone who ever has, or will, pick up a newspaper. In it, he deftly highlights "the top ten mistakes that infest day-to-day reporting of numerical and statistical information."

Error rates, inflation adjustment, and the distinction between correlation and causation are just some of the important data literacy principles Drum points out. Think you're pretty statistics savvy? Take a read and see if you don't learn (or recall) something.

For more fun, check out Lori Alden's example set of 12 misleading charts and statistics. Can you identify the blunders?



The fine line between tragedy and numbers


Unless you've been living in a cave for the last few weeks (and, given the madness of the holiday season, I wouldn't blame you), you've probably been following the WikiLeaks excitement in the news. The abundance of commentary on that issue need not be rehashed here, but Paul Bradshaw's take bears mentioning.

In his Online Journalism Blog, Bradshaw explores the difficulty of bringing big datasets to a human scale in journalistic terms, and explains, "when you move beyond scales we can deal with on a human level, you struggle to engage people in the issue you are covering."

His proposed solution is a kind of non-visual visualization, otherwise know as the anecdote. Human narratives can help us connect to data, to see it in a sympathetic way. Bradshaw stresses that personal stories must be carefully selected so they remain representative of the larger trend. He cautions that the intricacies of a larger dataset may not be revealed in the tales of individuals.

Industrial scale journalism using "big data" in a networked age raises new problems and new opportunities: we need to humanise and personalise big datasets in a way that does not detract from the complexity or scale of the issues being addressed; and we need to think about what happens after someone reads a story online and whether online publishers have a role in that.

Sometimes, it's about more than just the numbers.

The Strata Conference is coming

Fifty-three: that's how many days are left before the inaugural Strata Conference! Register now and join us in February.

Save 30% on Strata registration with the code STR11RAD.


June 02 2010

Four short links: 2 June 2010

  1. Wikileaks Launched on Stolen Documents (Wired) -- Wired claims the first set of documents was obtained by running a Tor node that users connected to ("exit node") and saving the plaintext that was sent to the users, without their knowledge. Reminds me of the adage that nothing big in Silicon Valley starts without being some degree of evil first: YouTube turning a blind eye to copyright infringement, Facebook games and spam, etc.
  2. VC Investments in Education -- Cleantech investors are chasing a 3x larger market than Education and yet are putting 50-60x the money to work chasing those returns.
  3. Cells: A Massively Multi-Agent Python Programming Game -- a sweet-looking update on the old Core War game.
  4. Google IO 2010 Session Videos Online -- I'm keen to learn more about BigData and Prediction APIs, which seem to me an eminently sensible move by Google to play to their strengths.

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