Can You Picture That?

This post was written by Alexa Andrzejewski, co-founder and CEO of Foodspotting (a 500 company). Based in San Francisco, Foodspotting is an interactive visual guide to good food and where to find it around you. Recently, Foodspotting announced that they raised $3MM in Series A funding.

In building my first startup, Foodspotting, I’ve realized that I’ve been given an incredible gift: For the first time in my life as a User Experience designer, I’ve found that if I can picture something, my team can make it real. Coming from the consulting world, where my designs rarely saw the light of day, this newfound power has been refreshing. But with great power comes great responsibility, because I’ve also found the reverse to be true: If I can’t picture something, chances are it won’t happen. And thus I’ve realized that diligently cultivating and communicating a concrete vision to my team is the most important thing I can do as a startup founder and CEO.

Some of the best things that happened in 2010 were vision-driven:

Foodspotting began with a vision: The 6 months it took me to find my technical cofounder, Ted Grubb, gave me all the time in the world to craft, visualize, validate and refine my vision for Foodspotting. The very first thing I did, before I ever opened up Photoshop or put down a line of prototyping code, was to capture the core ideas behind Foodspotting in a one-page poster (above). I used this poster to do some “customer discovery” (I ate out a lot and shared my poster with anyone who would listen), which enabled me to validate and refine my ideas. Over the course of these 6 months, as I solidified my vision through paper prototypes and image map prototypes, what began as a literal “Yelp for Dishes” evolved into the “Visual guide to food and where to find it” that it is today, and by the time I found my cofounder Ted, who also happens to be the world’s fastest, or at least most fearless, coder, we were able to hit the ground running and launch a beta within a month.

We launched with an epic food scavenger hunt: “What if you turned your list of 100 Things to Try Before You Die into a citywide photo scavenger hunt?” I cold called 7×7 Magazine, a glossy known best for its list of San Francisco’s 100 best dishes, with this idea and some 7×7-branded mockups when Foodspotting was less than a month old. Given how much informal competition was already happening around the list, the idea struck a chord with 7×7, and we launched the 7×7 scavenger hunt and our location-based guides platform soon thereafter. We owe our early success in San Francisco to this partnership.

We got Anthony Bourdain’s recommendations on Foodspotting: “Wouldn’t it be great if you could launch Foodspotting and immediately see the nearest dishes that Anthony Bourdain has eaten?” When Soraya Darabi joined us as our Head of Partnerships, I immediately expressed this dream to her. While she didn’t know anyone at the Travel Channel at the moment, within a week, Soraya was having dinner with the President of the Travel Channel. In a matter of weeks, the location-based guides I’d wished for were live, and the Travel Channel was airing promo spots inviting viewers to “Eat where Tony eats!”

Vision even helped us build a founding team to execute it: Of course, the vision was only part of the equation — both of my cofounders have an amazing ability to execute, which has been what’s made this experience so magical. But having a clear vision helped to attract these cofounders in the first place. The first time I met Ted, I pulled out that one-page poster. Even finding the right team members involved visualizing the ideal people, so that when we found them, we’d just know they were the ones. (Soraya actually WAS our vision of the ideal Head of Partnerships — after we met her, we knew we wanted to find a third cofounder like her — a vision that ultimately led us to recruit her.)

We closed our seed and Series A based on a vision: In raising two rounds of funding, I took the advice of UX-minded angel [and 500 Startups Mentor] David Shen to heart: David advises founders not to focus on what they can build today, but instead to “construct the ultimate product for a given need, and then see if you can get there via your startup’s evolution.” The big idea I pitched to investors was that “Foodspotting makes it easy to stumble upon good things in the world around you — it’s food today, but could easily be special dishes, special offers and even other products besides food in the future. We could be the Pandora for Food — or the Pandora for Anything.”

Now not all of our projects at Foodspotting have come together quite so easily. Product ideas we spent good time on ended up half-baked and back-burnered (Cartspotting, the Japanese iPhone app), and few of our partnerships have rivaled 7×7 and the Travel Channel in their success. Looking back, I’ll admit that my vision for some of these projects and partnerships was lacking or unclear.

But behind our biggest successes was a concrete idea with contagious appeal:


    • Find dishes, not just restaurants.


    • A citywide food scavenger hunt.


    • See where Anthony Bourdain eats wherever you go.


    • A cofounder like Soraya.


    • A Pandora for Food.


    • 10,000 Twitter followers by Christmas.


    • 500,000 users by the end of the year.

These “visions” took the form of sketches, mantras, metaphors, mockups, photos and illustrations, but because all were articulated in a concrete, memorable way, they were easy to share, test, refine and execute.

As Foodspotting grows, it will be critical that everyone on the team has a role in shaping the vision for Foodspotting. We began 2011 with a “visioning” workshop, where I asked everyone to list the “TechCrunch headlines they’d like to see in 2011” — as a way of forcing people to think beyond broad goals like, “Partner with a TV network” towards concrete missions like, “Foodspotting partners with the Travel Channel so that you can eat where Tony eats wherever you go!” We filled a wall with concrete ideas, and look forward to making them real in 2011.

This old adage is true for startups: “If you can dream it, you can do it.” The trick is taking the time to dream and making your dreams concrete.

More food for thought…

Made to Stick (Chip and Dan Heath)
“Take John F. Kennedy’s famous 1961 call to “put a man on the moon and return him safely by the end of the decade.” Simple? Yes. Unexpected? Yes. Concrete? Amazingly so. Credible? The goal seemed like science fiction, but the source was credible. Emotional? Yes. Story? In miniature. Had John F. Kennedy been a CEO, he would have said, “Our mission is to become the international leader in the space industry through maximum team-centered innovation and strategically targeted aerospace initiatives.” Fortunately, JFK was more intuitive than a modern-day CEO; he knew that opaque, abstract missions don’t captivate and inspire people. The moon mission was a classic case of a communicator’s dodging the Curse of Knowledge. It was a brilliant and beautiful idea — a single idea that motivated the actions of millions of people for a decade.”

The Experience is the Product (Peter Merholz)
“Experience strategy serves as ‘a star to sail your ship by.’ It’s a clearly articulated touchstone that influences all the decisions made about technology, features, and interfaces. An experience strategy can take many forms. At heart it is a vision, an expression of the experience you hope customers will have. The user experience strategy is George Eastman’s slogan for Kodak, ‘You press the button, we do the rest.'”

The Ultimate Product (David Shen)
“If you can imagine the ultimate product in your mind, I think it can give you guidance on how to build it. But if you don’t know what that is, how can you know if you’re on the right path to get there?”

What’s the vision? (Babak Nivi)
“Vision is aspirational. Google couldn’t claim to organize the world’s information when they wrote their first line of code. But they could aspire to it. Vision is free. Unlike your product, team, and traction, you can literally make it up.” -Nivi from VentureHacks

The UX-Driven Startup (Me)
For more on the early days of Foodspotting and some tools you can use to come up with, communicate and validate your vision, check out these slides from my UX-Driven Startup presentation.

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Spotlight on the 500 SuperMentor Network (Videos)

The SuperMentors of 500 Startups – we’ve revealed their true identities and their superpowers on this very blog. They’ve dished out their secret tips and war stories to entrepreneurs all around the world. Yet you’ve never seen them in action. That is all about to change. RIGHT NOW.

Christine Tsai, the omnipotent Chief Pug Herder of the 500 SuperMentors, took some time out from her crazy schedule of herding pugs and fighting crime to shed some light on these amazing 500 SuperMentors. This never-before-seen video includes rare footage of an actual SuperMentor in his element – helping out one of our startups:

But wait – there’s more! We convinced a few of our heroes to unveil their masks, remove their capes, and say a few words for us in civilian form:

Thanks to micro-documentaries for producing these videos.

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Join zozi and 500 Startups for Indoor Trampoline in San Francisco

A little shameless plug by Daniel Gruneberg, Co-Founder and VP of Business Development at zozi (a 500 company)

We’ve always enjoyed a good reason to get an amazing group of people together. With that in mind, we’d like to extend a big “thank you” to the fine folks at Social Media Weekfor giving us a chance to do just this.

As you may know, Social Media Week is dedicated to bringing people together to discuss all things social. This year SMW kicks off February 7th and runs through the 11th in cities around the world.

We’re teaming up with 500 Startups and House of Air and inviting a bunch of geeks to an indoor trampoline park created from an old airplane hangar. Yes, there will be 11ft hoops to dunk on, the most ridiculous dodgeball you’ve ever seen, Blue Bottle coffee, a taco truck, zozi credits for all, comfy t-shirts, Dave McClure doing flips, a photographer to catch all the action, and beats being dropped by aDJ suspended above the crowd on a steel catwalk.

The event will be on February 10th, from 4:00 PM – 6:00 PM in San Francisco. We’d love to have you join us! It’s going to rock.

More info here:


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Congrats Team CardMunch!

This post was written by 500 Mentor Manu Kumar and originally published on his blog at K9 Ventures.

CardMunch announced today that it has been acquired by LinkedIn! The CardMunch acquisition marks the debut exit for K9 Ventures. A huge congratulations to the team: Bowei GaiSid Viswanathan, and Sudeep Yegnashankaran for having built an outstanding product, service and team, that attracted the attention of the world’s largest professional network.

(Disclosure: I am a co-founder of CardMunch. K9 Ventures invested in CardMunch on “day zero” as K9’s first concept-stage investment, and up until the acquisition I served as the Chairman of the Board at CardMunch. So yes, I have a very biased view)

When Bowei Gai, Sid Viswanathan, and I first met to discuss the concept that eventually became CardMunch, we talked about how we wanted to build a company that helped business users manage their contacts, and leverage those contacts and connections for doing business. Most of all we were trying to solve the problem of the pile of business cards that has become a constant fixture on my desk.

N.B. Image intentionally distorted.

While we spent most of the time discussing how this is still an unsolved problem, which done right could be a huge business; we also talked about which companies this could be interesting to. The first name that came up was of course that of LinkedIn. It’s been an amazing experience to have worked so closely with the CardMunch team over such a short period of time to come full circle to that first conversation.

CardMunch, Inc. started in December, 2009. We had an alpha version of the product in March, 2010, beta in June, 2010 and launched on the AppStore in August 2010. In December, 2010 the team released CardMunch 2.0, and today CardMunch 2.1 goes live concurrently with the announcement of this acquisition. Needless to say we’ve had a very very exciting 13 months.

We were fortunate to pull together an outstanding, all Carnegie Mellon team for CardMunch. Bowei was previously the co-founder of Snapture Labs – a company that built a camera application on the iPhone. Sid’s passion for the contact management space runs deep. He previously started Rolotrak, with the aim to help maintain their relationships with their most valuable contacts. Sudeep is a shockingly sharp engineer, that we were *so* fortunate to have join the team. The team worked together amazingly well, pulled long hours (unlike startups who work late into the night, these guys decided amongst themselves they would start work every morning at 8:00 AM!), and delivered an amazing product/service.

Along the way CardMunch was fortunate to win the support of angel investors Dave McClure of 500 StartupsMitch Kapor, and Ty Danco who joined me (K9 Ventures) in participating in the Seed round for the company.

I would like to recognize the entire team at LinkedIn that worked with us on this transaction, with a special mention for Emilie Choi and Lora Blum. LinkedIn is fortunate to have some of the best people I’ve ever met working there, and my respect for the company has only increased through this interaction with them. I’d also like to thank the legal teams at WSGR and Silicon Legal for all the hard work that they put in bringing this transaction to a close.

We all see so many acquisition announcements, but we sometimes forget all the hard work that goes in behind the scenes to make these happen. As I mentioned in a recent tweet: “it’s been a privilege to work with all these high caliber people in the Valley.”

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Getting to the Top of Google – Less Science, More Workflow

Meet Mandorallen (from the series Belgarion by David Eddings), aka 500 Founder John Straw. John is CEO and founder of Linkdex. Based in London, UK, Linkdex is going to disrupt the SEO space by providing a fully integrated suite of tools that for the first time allows SMB’s a real opportunity to get to the top of Google search results.  LinkDex recently won the eConsultancy Search Innovation 2011 Award. John is a digital marketing entrepreneur – with 4 marketing startups in 15 years and 3 profitable exits. Linkdex is the 4th and our VC’s have high hopes!

If you’re like me and have decided to get fitter and lighter in 2011, you may have been told by your trainer that ANYONE can get fit. All you need to do is commit to doing the right exercises in the right way in the right frequently.

As I was told this, I was amazed at how similar this was to the rules of growing your natural search rankings, traffic and sales. If I was to tell you what to do, how to do it and you were to make the necessary investment in time and money, I am 100% confident your analytics reports would make for pleasant reading.

The problem is most businesses simply don’t know where to start with SEO and that’s not helped by the myths that have been created over the years. Let’s take a closer look at what’s really important:


    • Keyword selection. It is critical that you start your SEO program with a well researched target keyword list. It should be as broad and it is long and it should be ambitious. Now clearly “credit cards” is going to be fiercely competitive but “low interest credit cards” is a lot less competitive and will produce better-qualified visitors – and there’s real volume in long tail.


    • Positional benchmarking. Measure your success – take your keyword list and check to see where you are on Google against those keywords.


    • Content optimization. You’ll need a page for each core group of keywords. But not any old page. A perfect page has your keywords in all the right places, maximizes conversion, and will more likely to be linked to by other websites.


    • Run a competitive landscape. You will know who your top performing competitors are, so you should understand what their backlink structure looks like and who are the influencers in that structure.


    • Link building. Essential, critical and here’s where you need to be persistent. You’ll have seen the really good quality influencer links in the competitive landscape. You can also find links that you and your competitors don’t have yet and then be creative by developing a relationship with those links.

The very best links are given because of your site’s editorial brilliance. This is what Google’s Matt Cutts calls “links that stand the test of time”. It’s how Google will establish trust in your brand.

If my belief that any online savvy business owner can do SEO has inspired you to add a late new year’s resolution to your list and get your website ‘SEO fit’, you should try Linkdex. Here’s what it brings to the party:


    • Keyword research


    • Positional and traffic reporting (integrated with Google Analytics)


    • Onsite optimisation


    • Competitive landscaping (really truly awesome, real insight)


    • Link building with CRM


    • All fully integrated into a centralised task manager and with great SEO education

It will help you take control of your SEO in 2011. Here’s the SEO demo video. Linkdex is just $49.00 a month with no commitment. Not much to change your weblife….

But please remember – like exercise, SEO is not an “in time” activity. Rather, it’s “through time”. SEO should not be something you can consider as a one-off. It is something you need to consistently work at. Build workflow around it and be persistant – it will pay off.

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What You Need To Know To Go International (US Version)

Colette Ballou

Meet European Girl, aka 500 Mentor Colette Ballou. Colette is the founder of Ballou PR, the smartest and sassiest public relations agency on either side of the Atlantic, focusing on high-growth companies. She oversees activities for their Paris, London, New York and San Francisco offices and is a frequent speaker/moderator and a mentor/judge for startup organizations and events such as Seedcamp, Microsoft BizSpark, IBM SmartCamp, SXSW Start-Up Accelerator, the Telegraph Tech Start-Up 100 and TechCrunch. One of European Girl’s superpowers — the ability to smoke a pack of cigarettes in a single puff.  Follow her on Twitter.

How exciting – you’re expanding internationally! Assuming you’ve done the research about potential demand, competition, etc., and you’ve narrowed down the list of countries to set up shop, here are some nitty-gritty things you need to get right from the get-go, along with solutions. But first things first: Going international is a strategy, not an afterthought. The management team needs to be on board and aligned. Get that right first. Then add these to your management team agenda:

Location: Don’t just go with what everyone else is doing – select a location that makes sense for you. Etsy selected Berlin, not London, for its European HQ. Why? No doubt the art scene and the (relatively) low cost of living played a part. But also investigate local labor laws (see below). Keep in mind that you want direct flights home. It will make a difference.

Language: That clever Canadian intern may have won a top grammar prize back at school in Montreal, but that doesn’t mean s/he can speak French the French way. A sure fire way to alienate early adopters in new countries is to translate poorly. Using French Canadians or South Americans for French or Spanish is a quick way to show a market that you are not local, nor serious about them. Solution: Use native translators, or stay in English until you can do the job right.

Currency: Duh. But if you are selling online, you need to get this right. Customers are put off if you stray too far from actual foreign exchange rates. Solution: See how competitors or similar business have solved it.

Accounting: All accounting rules are NOT the same (I learned that the hard way). Solution: Get a local accountant who speaks your language, and better still, one who understands US accounting rules. Don’t necessarily go for a big recognized name as you will pay for it handsomely. Start with a local person who specializes in start-ups and in your industry; you can always trade up.

Tax/invoicing: Don’t underestimate how complicated this is – it is different in every country. And don’t assume that the EU has one flat tax, either. The VAT can really be torturous. Solution: Get a good local accountant (see above).

Banking: Some banks have VERY strict rules about opening accounts due to fears of money laundering. And some require a phone or electric bill, and you can’t get a phone because you don’t have a bank account … you get the picture. Quickie solution that works: Put your name on a local friend’s gas/electric/phone bill. Note to self: Get local friend.

Legal: I cannot stress this enough: It really blows to find out the hard way that you are doing something illegal. Solution: Talk to a lawyer who specializes setting up small businesses in your new market. You can likely do this from the US.

Work visa: This will take up to 4x longer than you were expecting and in some countries, you cannot be in the country while you are applying. They can tell – passport stamps say it all (of course, you can get around this in the Schengen states). And the laws are always changing. Solution: Get a good immigration lawyer. You can find this either locally or in the US.

Labor laws: You’ve heard the horror stories about French labor laws. I’ve lived them, and they would have destroyed a smaller company. If just one of you can learn from my mistakes, I’ll be happy! So, know the labor laws of your market, including what it takes to transfer people from the US. Solution: Find a lawyer in the US who can advise you on local labor laws – this may help you decide where to set up shop.

Employee number one: Do not send a mid-level person from the US to set up shop. This is the fastest way to fail – it shows the market that you are not really local or really serious. Solution: Either send a senior-level person (co-founder is perfect) or hire a top-level local person (I know, I know, scary due to labor laws).

Space: No need to spring for expensive space – use co-working spaces! TechHub in London is a great example.

A note on the buddy system:  One of the best ways to enter a market is to follow a company you are close with, one who has already started the process and from whom you can learn.  They can give you advice on service providers, phone plans. And maybe even a desk or two!  Or if you are a part of Microsoft BizSpark, or IBM SmartCamp, orGuideWire Group’s Innovate! Program.  Ask your program lead or companies in the program with you.

Biggest tip? Suspend judgment. Just because things work one way at home, that doesn’t mean it’s the right way or the only way to do things. You will waste far too much time railing against the system rather than adapting to it. Assume that to get anything critical done (filing paperwork for a company, visa, etc.) that you will need at least 3 tries and at least 2 hours per visit to the powers that be. Bring something to do. And note that you can’t bring devices into US embassies/consulates. Laptops, cell phones, iPads, iPods – all such devices must stay at the screening point, and some buildings won’t even let you leave them in security, which means you will need to leave them at home or with a friend outside the building.

Also, don’t forget that most places have a rocking startup community, even if it is dinky, and you have access to already!  Sign up for the local StartUpDigest.

Last but not least, why not join us at one of our “Doing PR In Europe” roundtables?  Ping me on Twitter for an invite – if we can’t get you in this round, we’ll get you in the next one.

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How to Create a Successful Startup in Japan: In 10 Easy Steps!

This post is written by Robert Laing, co-founder of myGengo (a 500 Startups company). A bit about Robert, in his own words: “Two years ago I founded myGengo, the API and platform for human translation (some call us a Mechanical Turk for translation) withMatthew Romaine, who’s half American, half Japanese. I’m from the UK, have been in Japan for 3.5 years, prior to which I worked in online advertising and web design at UK agencies. My Japanese is, um, OK.”

Matthew Romaine and Robert Laing of MyGengo

The 10 steps:


  • Know what a startup is


  • Have a relevant reason for being in Japan, and always evaluate location


  • Use the culture, learn the language


  • Learn to straddle timezones


  • Don’t worry about the local economy


  • Figure out how to raise money


  • Create a hiring strategy


  • Consider creating a US entity


  • Focus


  • Profit!

Step 1: Know what a startup is
The first time I heard the word ‘startup’ was 2005, when I discovered TechCrunch in my (boring) lunchtimes at a design job in the UK. I went through the brain-opening process of realizing that you didn’t need ‘permission’ to start a company and you could do pretty much whatever you wanted. Wow.

If you are from the Bay Area you are probably thinking, “What? I created my first startup pitch deck in the womb. This guy had his head stuck in the sand.” But the amazing ‘startup’ idea is taken for granted in Silicon Valley: cultural, family, political support for innovation, plus local success stories.

Robert Laing at TechCrunch's office in Jan 2010

Blogs like TechCrunch, Mashable etc have spread that idea around the world — for which they deserve more praise — but there’s still a long way to go. Our hope is that Dave McClure’s efforts in tossing briefcases full of seed money at every far-flung entrepreneur who gives him a ride will spread this ethos even further, by creating more and more local startup successes.

In Japan people call a startup a ‘venture’ pronounced ben-cha — but GREE, Mixi et al (both public companies) are still considered ben-cha. There is still cultural stigma here about joining a company that isn’t one of the well-known local giants like Sony, Toyota or whatever. So if you do it, ESPECIALLY if you are a local, you have big balls — hats off to the Japanese entrepreneurs like Flutterscape and Sano-san, CEO of Cookpad!

EXPERT TIP: If you meet an entrepreneur who is successfully building a startup in a country without a vibrant startup culture, they are probably the real deal. Please fund them.

Step 2: Have a relevant reason for being in Japan, and always evaluate location
We would not have come up with the idea for myGengo if we weren’t living and working in Japan. We simply would not have understood language as the massive, unsolved problem that it is. So the company’s conception is partly due to our location. People ‘get’ the translation problem here, whether they are running a billion-dollar company or aramen shop. Being in the heart of the problem space is good for us.

However some things about Japan are hard, so if there was no longer a compelling reason to be here (or if we had started a service that would only work in the US), we wouldn’t sacrifice the company for the country, we’d move. Since a startup is probably 100% of your focus it would be crazy to stay just because you like onigiri.

Matt enjoying matsuri-time. There is a matching photo of me from the other perspective which is extremely flattering too..

EXPERT TIP: Do not come to Japan in order to start a company. That is insane. You will fail.

Step 3: Use the culture, learn the language
OMG Japan is, like, the most convenient place in the world! Combini (convenience stores) appear every 16 metres on every street in the land, and in between those are vending machines that dispense t-shirts and gyoza 24/7. Service is so good that IKEA will replace your 2-year-old sofa with a new one for free if they don’t have a replacement cover, AND give you Y40,000 ($480) coupons*. The transport is so reliable that aggregated annual delays on the shinkansen network are measured in picoseconds.

Matt clearing out IKEA for our office setup.

*This one actually happened to us, but partly because my wife is omnipotent.

Japan is alternately futuristic and stuck in the past. For example, when you go to the bank to set up an account, the teller will give you a little piece of paper for you to *write* your PIN on, and then she’ll read it and tap it into the machine herself. Nice and secure. Real estate agents use huge bound books of faxes to show you properties. You can’t use a credit card in most restaurants. On the other hand we have probably the best mobile network in the world, with consistent 3G mobile access all over town and the biggest internet tubes that never get clogged.

But in all seriousness, Japan does a lot of things right when it comes to service, largely because people care about doing a great job and customers have very high expectations. Few people are bullish about the Japanese economy as a whole, but Japanese companies like Toyota still kick ass with quality and efficiency. (The accelerator pedal thing was, in my opinion, complete bullshit if you read the science) Actually, if you run a startup that has to do with production of anything you must read The Toyota Way right now. (Yes, instead of finishing this blog post).

One of the rare days when only five myGengo employees wore the t-shirt..

This is a good thing — and we try very hard to combine this philosophy with that of running a lean startup, which is healthy but hard. As you can imagine, quality of output is something we obsess about, and kaizen is crucial for us to keep increasing quality and efficiency of translation. We do not create enough public visibility of this cultural impact on myGengo right now, but it is most definitely there, a great advantage to us, and something we will make more of.

Hoping our next hire has bowling alley experience..

Language is obviously a pretty big issue. I survive by understanding (most) Japanese but expecting Matt to talk when we need to say intelligent things in public here. Sometimes I (regrettably) use staff as interpreters, but this makes me look more important 🙂 and also avoids me saying stupid things. But essentially we solve language issues by a) hiring appropriately and b) creating a product that takes away direct project management of translation.

EXPERT TIP: Do not take on negative local habits — like the Japanese tradition of people hanging around in the office late at night doing largely nothing except waiting for the boss to leave. Or the practice of having 10 people attend a meeting when only 1 is required. Or cramming 5,000 words on every PowerPoint slide.

Step 4: Learn to straddle timezones

8 IKEA clocks, $9 each. The sound of 8 cheap clocks ticking when you’re trying to work in peace, hmm, not so priceless.

If we look back on 5 of the last enterprise deals myGengo did, 4 of them were with clients we have only ever met over Skype. Timezone becomes more of a limiting factor than distance, because you have to cram calls into a short time period and you miss people. We do calls with the US pretty much every morning, and calls with Europe every evening because of the time difference, and I wish we had more time.

GROUP WORK: Discuss your ‘pet hate’ timezone. From Japan: Eastern Standard Time, you suck! Shall I take that call at 6am or 11pm? Hmm, nice choice.

Step 5: Don’t worry about the local economy
Japan is universally panned for its low birth rate, aging population, pension crisis, and poor political leadership. However, writing about Japan’s failings has been done and overdone and done again. All that stuff is probably only a 0.5% factor in your success. To grossly paraphrase Steve Blank, if the probability of X is lower than the probability of your company not surviving to the next milestone, forget about it. We’ve doubled revenue quarter on quarter over the past year, despite Japan’s gloomy macroeconomic forecasts.

myGengo friends disregarding the local economy in fine style

And anyway, there’s way more that’s the *same* about a startup in Japan and a startup in, say, Italy, than differences. The fact that founding a startup is hard is the same. That you need to get out of the building and actually understand the customer is the same. That you need to find good people is the same. That you need to constantly iterate is the same.

IN YOUR OWN TIME: Come up with 10 reasons why it’s harder in *your* country than anywhere else. Then realize there are entrepreneurs in Iraq and Afghanistan and whatever war zone you care to name. If you are reading this post, you have all the head-start you need.

Step 6: Figure out how to raise money
If your startup is in Japan or almost any area outside of Silicon Valley, you should get smart about raising money and fast. All the blog posts and other literature that comes out of Bay Area startups is relevant, but it’s written in the context of being in the most vibrant angel and VC investing community in the world. There will always be local sources of angel/seed funding, but if you want to meet angels who are experienced, helpful, easy-going and in useful numbers, making a trip to the US makes a huge difference.

Our seed round involved 9 different angels and nearly as many nationalities – but many of the connections came through Dave McClure. Having at least one initial tie to Silicon Valley made it massively easier.

We gave this man a t-shirt to try to stop him walking around half-naked and shouting expletives. We were 50% successful.

EXPERT TIP: Get onto AngelList by hook or by crook — it puts you in front of 100s of great people. AngelList is improving international communication between entrepreneurs and angels massively, so hats off to Naval and Nivi for their efforts.

Step 7: Create a hiring strategy
We don’t have such a large pool of people to pick from here in Tokyo — but we also don’t have the cut-throat competition for talent. Even though we’re a small company, we’re pretty visible to developers and we have a *much* more interesting environment to work in, so we’ve been able to attract great people.

Our hiring strategy is totally foolproof..

But in my opinion, if your startup doesn’t view hiring as a constant challenge, you’re not being selective enough. Hiring is something we think about constantly and an area where we need to be just as creative as when building our product. The next 12 months will be a real test to our hiring tactics, not just because of location, but I’m confident we can win.

EXPERT TIP: Actually sit down and set a strategy for hiring as you would anything else. Be prepared to bring people in from a long way away. Make sure you don’t choose people who just fancy a holiday. Learn the visa rules!

Step 8: Consider creating a US entity

An important part of our trips to the US is riding Google bikes. Yes it is..

Our company now consists of a US parent corporation (myGengo, Inc.)  and a Japanesekabushiki kaisha (株式会社 myGengo), which is fully owned by the US corp. This was initially to receive US-based investment (a US company is way easier for people to understand investing in, wherever they are based).

There have been other benefits too. It has actually made dealing with people outside Japan a lot easier — for instance, subcontractors (i.e. our translators) are very suspicious of tax forms in Japanese, understandably, because they can’t understand them and often the requirements seem arbitrary. So having things come from the US makes sense.

GROUP WORK: Talk to startups who’ve raised money while having their main entity overseas. They’ll have tips on how to do it without incurring massive legal fees or creating absurdly complex structures.

Step 9: Focus
We don’t have the constant events and networking opportunities of the Bay Area. So what we do is gorge on these when we go to the US, and then come back here and focus. Particularly in the early stages, we’ve always been glad to get back to Japan and have time to give the product our full attention. Over time we see ourselves as bridging Japan and the US a lot more (and we already have fantastic myGengo team members in San Francisco).

Horizontal, but focused, front-end developer superstar. Go Adam!

EXPERT TIP: Use the best advice from the Bay Area and combine it with the best of local talent.

Step 10: Profit!
In all seriousness, it’s worth having at least a cursory thought about potential exits (if that’s what you want), and whether or not that will be in Japan or overseas. In a general sense, Japan is known more for early acquisitions rather than later, $500MM+ ones. Also, it’s possible to IPO here on much lower revenue numbers (note there are exceptions!). But if you’ve done Step 8 and set up a US entity, you’ll potentially have a whole different set of options. As always, the important thing is to concentrate on building a strong, profitable company 🙂

Treating our bodies like temples allows us to be 10x more productive than startups who don’t. Watch out.

Thanks for reading. Stay tuned for my future post about how to (try to!) break into the Japanese market. And drop myGengo a line if you want to know more — check out Stringif you want to localize your services, and our API for high-volume, good-quality human translation. 🙂

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Top 10 Tech Investing Trends For 2011

This post by 500 Overlord Dave McClure was originally published on Reuters. No apologies for shameless plugs and links on several of our 500 Startups we believe embody these trends.

Top 10 Tech Trends for 2011

1. (Way too many) Groupons, social games and photo-sharing apps

Unimaginative VCs — which is to say, all of us — tend to start the new year off throwing good money after bad on last year’s tired and expired ideas. 2011 will be no exception for “innovation imitation” with more group-buying ecommerce plays, more social game startups, and even more ways to do photo-sharing on Facebook and Twitter, now new and improved with 37 shades of yellow-gray filters. Humbug. My first easy and obvious prediction is that VCs will waste a ton of money chasing hundreds of “me-too” startup ideas. Nothing new here Kmart shoppers… let’s move along.

2. Commerce and coupons for location-based services (LBS), aka “The $5 check-in”

While there have been a bajillion startups pitching “check-ins” and location-based services in 2010, I really believe 2011 is the year we see this category finally get some legs and take off. Why? Because companies are finally starting to provide discounts and coupons to customers via mobile devices. And once the affiliate market develops for exchanging location and profile data, we should see more people adopting check-in behavior to qualify for discounts and loyalty programs for their favorite offline services. As I wrote earlier this year in a post called “Check-ins are Coupons”, once financial incentives are combined with existing game mechanics, we’ll start seeing mainstream usage for services like Foursquare and Facebook Places. Going forward we will see an explosion of LBS innovation after Google, Facebook, and other platforms begin pushing revenue incentives for apps that facilitate location data.

3. Crowdsourcing: The Web-enabled mass assembly line

The Internet is a great platform for distribution, but now you can use it to reach not only customers, but also workers — it’s called crowdsourcing. While Amazon Mechanical Turk has been around for a few years enabling access to thousands of remote workers, new startups like Crowdflower (disclosure: I’m an investor) offer platforms for managing the distribution of small, specific tasks to a large and scalable workforce around the world.  By combining the Web with an “on-demand” workforce companies can grow rapidly, remixing both digital and human to weave an entirely new fabric of business services.

4. URLs for IRL: enabling the Internet of “things”

Yet another innovation around integration: the offline world is quickly becoming stapled into the future by combining physical representations with digital ones. Imagine if everything you touched, held, or viewed in real life became a separate online addressable entity… kind of like slapping a sticker with a URL onto anything and connecting it to the Web. Not quite cyberspace, rather this augmented reality is how we are building out the real world online, and subsequently can deliver benefits of identification, indexing, categorization, discovery, and location to the offline world. This new and enhanced Internet enables offline discovery and navigation of many previously hidden real-world resources. Our investment in Retailigence is also connected to this trend.

5. The Emergence of global languages and geographic arbitrage

Current estimates suggest more that two billion people around the world use the Internet via PCs, and including mobile phones perhaps three billion people are online, or around half the entire population of the earth. As shown by this infographic, English and Mandarin dominate the online conversation with close to 500 million speakers online and more than a billion offline. Also growing in online influence: Spanish, Arabic, Hindi, and Portuguese. What’s interesting is that these languages also seem poised to drive cultural trends globally. Looking at average GDP and Internet penetration by language, we can map out a geographic playbook for any Internet startup to prioritize how they lay the online smackdown on the planet, and use geographic arbitrage to move the point of innovation, production, and transaction to optimal locations. For more info on this topic, see p.5 of this 2009 report on global language trends by MyGengo, a 500 Startups portfolio company.

6. YouTube killed the video star: Distribution and monetization of online video

After years of free online video via YouTube, you’d think it’s impossible for anyone to make money online. But on the contrary: Apple, Netflix, and Hulu are laughing all the way to the bank, and even YouTube itself is rumored to be close to break-even. Massive distribution and monetization platforms are now a reality for online video, which should translate into tremendous opportunities for startups. We’ve already invested in video monetization startup Brainient and education video site Udemy; and we have several other video distribution and promotion investments we will announce soon. Expect more innovation and development in video, as millions of iPad and other tablet devices become mainstream, and as YouTube continues to expand its influence on global culture and entertainment. Here’s lookin’ at you, kid.

7. More iPads, iPhones, iOs Apps and more Android on the way

Apple continues to be an irresistible force of nature when it comes to consumer computing devices and application platforms. Bloggers are already arguing whether Apple will “only” ship 45 million iPads in 2011, or if they’ll exceed 50-60 million units. Nice problem to have for a product barely a year old, eh? At the same time Android devices are growing in popularity, and seem poised to compete effectively with Apple for mobile application dominance. Regardless, both platforms will drive huge amounts of user and developer activity, and the future couldn’t look brighter for startups focused on mobile apps and services. Our investments in mobile ads platform MediaLets and mobile analytics provider Apsalar reflect our strong belief in the growth of mobile infrastructure services.

8. Design is the new black: The growing importance of user experience and design

Along with Apple’s success — or perhaps because of it — design has become a critical skill for startups. Apple’s fanatic obsession with simplicity and user experience has also become a priority for consumer-focused startups in particular. The most notable example of this is one of my former portfolio companies,, acquired by Intuit in 2009. As with Apple, the Mint team had a never-ending passion for design and UX (user experience), and many people attribute much of Mint’s successes to their unique and compelling Web design. I expect the design trend to continue and even accelerate; look for growing and continuing investment in design-driven and UX-driven products. Our investments in eye-tracking startup GazeHawk, foodie pic-porn startup Foodspotting, and in 955 Dreams and their new History of Jazz app for the iPad are great examples of where we see the industry heading with design and UX.

9. Family 2.0: Apps for kids and grandmas

Better design and better user experience has made it easier for new audiences to start using the Web, particularly the young and the old. My kids – now 3 and 5 – have become big fans of using the iPhone and iPad, and when I watch them their experience is so natural and easy. They never had to read a manual, they just started touching and swiping and pinching – it was magical. But while kids have become easy and eager adopters of these devices, there remains quite a large amount of education content and apps to deliver. And not just for kids, but also for older folks too — more and more seniors are comfortable with computers and computing devices, so expect a growing market for users of all ages.

10. Facebook is dead. Long live Facebook.

Some folks continue to complain that Facebook is overvalued, or Facebook has jumped the shark, or Facebook app development is challenging and the rules change constantly. To these folks I say: stop whining, get over yourselves, and get to work. Facebook is an unstoppable global juggernaut 600 million users strong, and dominating our online experience. While Twitter has certainly  grown leaps and bounds too, it’s impossible to ignore how significant Facebook has become as a familiar and frequent environment… for everyone. And generally, this is a good thing. While the idiosyncrasies of Facebook platform change all the time, it’s worth the effort. And regardless of whether you’re building games or productivity tools, there’s no question enabling access and distribution through the Facebook ecosystem is a huge benefit for both developers and users. Our investments in this area include social media marketing platform Wildfire Interactive, shopping cart and e-commerce solution Payvment, and AppBistro which offers fan page apps and utilities. Expect these startups and more Facebook Connect and “Like” buttons popping up in an online neighborhood near you.

Alright folks, that’s a wrap. Tell me why I’m wrong, stupid, or crazy in the comments below. Happy New Year to everyone!

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We’re Hiring An Events Coordinator

Know anyone who would be PERFECT in the Events group at 500 Startups? If so, pass along this info! Our events director, Christen O’Brien, is looking to hire an events ninja to start immediately. (Note: this is all part of our MASTER plan to have 500 events! MUAHAHAHAHA…)

About the Position

The Event Coordinator will report to the Director of Events and will be responsible for back-end and on-site coordination of both internal and external events and conferences. The ideal candidate for the position will quickly excel within the role and be well-poised to solely manage several events annually, which is a high-profile position among the tech industry’s most influential people.

This is a high-growth role at a fast-paced company and thus requires a candidate who is extremely motivated, dedicated, and passionate about their career.

Overall Responsibilities

1.       Event Production: Production assistance with internal (incubator) and external (public) conferences and events such as:


    • Warm Gun (SF Bay Area & NYC)


    • SMASH summit (SF Bay Area & NYC)


    • Inbox Love (Mountain View)


    • The Lean Startup SXSW (Austin, during SXSW)


    • Geeks on a Plane (tours to South America, Asia, and India)


    • 500 Startups Demo Days (Mountain View, quarterly)

2.       External Business Development: Partnership acquisition with tech’s leading companies, such as Google, Facebook, Microsoft, Yahoo, Twitter, Salesforce, and LinkedIn. You will work alongside the Events Director and will quickly learn how to build partnerships effectively within the 500 Startups landscape.

3.       Internal Business Development: Building relationships with our portfolio of 60+ startups and connecting them with event and partner opportunities at industry conferences, internal 500 Startups events, external 500 Startups conferences, as well as introductions to other companies and executives.

Specific Responsibilities



    • Research: Work with Events Director to research and compile pre-event data such as competitive events, marketing partner targets, sponsor targets, topics, and speakers.


    • Project Management: Work with Events Director to engage relevant partners (event advisers), set-up meetings, and drive short and long-term goals.


    • Content Production: Be part of the process…attend team meetings and participate in discussions with relevant parties about topics and speakers.


    • Business Development: Engage the tech community…work with Events Director to secure event partnerships which involves research, conference calls, and in-person meetings.


    • Marketing Strategy: Innovate our marketing channels…work with Events Director to brainstorm and solidify marketing strategy for events and conferences. This will involve a large amount of social media.


    • Website Production: Alongside Events Director, work with designer to set-up event website, draft content, and incorporate social media platforms.


    • Back-End Management: Manage back-end technologies and channels – Set-up and manage eventbrite page, plancast page, facebook page, twitter stream, and other event/social media platforms.


    • Vendor Management: Coordinate with vendors as needed, such as printers, caterers, etc.


    • Speaker Management: Collect relevant information from speakers such as photo, logo, bio, etc.


    • Sponsor Management: Send contracts and invoices and collect payments from sponsors, as well as logos and photos.


    • Volunteer Recruitment: Recruit event volunteers from volunteer database and local universities.


    • Material Production: Alongside Events Director, make and assemble name badges for attendees, relevant signs, time cards, event production binders with all necessary information, etc.



    • Event Management: Alongside Events Director, serve as “event producer” at most events during main stage and/or afternoon tracks. This is a “stage manager” role that involves constant timing, speaker management, management of audio visual technicians, and more.


    • Speaker Management: Serve as contact for arriving speakers, provide them with instructions and information regarding their roles, assist them with file uploads, and work with audio visual technicians to test presentations with speakers.


    • Volunteer Management: Alongside Registration Manager, oversee volunteers during event.




    • Vendor Follow-up: Ensure that all vendor payments are complete and all accounts are closed.


    • Sponsor Follow-up: Manage calls with sponsors to thank them and gather feedback.


    • Speaker Follow-up: Draft and send hand-written thank you cards to all speakers.


    • Attendee Follow-up: Draft and send post-conference thank you to all attendees, and manage any questions and comments.



    • Serve as contact point to funnel opportunities from the events division to relevant members of the 500 Startups team, such as introductions and potential partnerships


    • Maintain competitive events calendar and ensure that Events page on 500 Startups website is up to date.


    • Maintain appropriate levels of event supplies such as name badges, printer ink, badge boxes, sign holders, paper, etc.


    • Constantly innovate and think up new ideas, strategies, partnerships, and locations where we should focus – the ideal candidate will excel in this role, always be searching for new methods and technologies, and eventually will run several 500 Startups events independently.



    • Education: College degree from a 4-year university/college


    • Location: Candidate must be based in the San Francisco Bay Area (not a telecommute position)


    • Traits: Razor sharp, extremely motivated and career-driven, diplomatic, social, energetic, persuasive, humble, patient, and hard-working. Extra points for wit and humor!


    • Personality: You need to be the kind of person who’s bold enough to call someone you’ve never met, engaging enough to get to know them and build a relationship, resourceful enough to find the opportunities and seize them, hard-working enough to roll up your sleeves and get the job done, and thorough enough to close loops and deals independently.


    • Experience: You don’t need events experience, though it is a plus.

Annual Compensation:
Commensurate with experience. Also includes potential for commission + a full benefits package.

To Apply:
Candidates should send their resume and salary requirements to christen at 500 startups dot com.

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The Pleasure Principle: Not All Products Need To Be Painkillers

We’re excited to welcome Khush to the 500 Startups family! Khush develops the music-creation iPhone app LaDiDa which has been downloaded 270,000 times. Khush means “happy” in Hindi. Below is a repost from TechCrunch which was written by Prerna Gupta, CEO and co-founder. You can follow her on Twitter at @prernagupta. (Check out theoriginal TechCrunch post and announcement)

Earlier this year, my company advanced to the final stages of two prestigious start-up competitions. Both times, I got up on stage and belted out my prezo in C Major (our product is LaDiDa, an iPhone app that helps bad singers make music), and then backed up the singing with solid growth metrics on our business. The audience loved it, and LaDiDa was a crowd favorite to win in both contests. But when it came time for the judges’ feedback, I was frustrated to hear a familiar refrain: “Your demo is great, really cool app,” they said, “but we can’t give you this award because your product doesn’t solve any obvious pain point.”

Most investors will tell you to never walk into a meeting without a good answer to “what’s the problem you’re trying to solve?”. Dave McClure’s famous Startup Viagra: How to Pitch a VC deck puts this question right up front, at slide #2. Focus on pain, say the experts. Your product must be a painkiller.

While there is obvious wisdom to this rule, there is also a flaw in using this rubric exclusively. Consider, for example, that the most addictive technologies we’ve seen in the past few years would have never passed this test before millions of people were already using them (that’s perhaps why so many VCs missed the boat on Twitter). It’s easy to say today that Twitter solves the problem of dispersed information, or Facebook the problem of dispersed friends. But who thought of these as “pain points” back in 2004? I don’t believe Twitter and Facebook are painkillers. Just ask yourself, Is “acetaminophen” really the drug you feel like you’re on when you’re using Twitter? Or does “methamphetamine” sound more appropriate? There’s in fact been research to show that your brain reacts to products like Twitter in much the same way as it would to stimulants like meth.

So what’s my point? If you focus only on painkillers, you’ll likely miss out on a completely different, and potentially much larger, set of opportunities: those that target pleasure. Pornography, sports and coffee are, for example, three insanely lucrative industries, and each of them sells the promise of pleasure.

I believe that a focus on solving pain points alone leads to linear thinking that suppresses innovation. A perfect example of this is music. As traditional wisdom would have it, music is an ailing industry. Listeners won’t pay for content, labels are going bankrupt and artists don’t know how to connect with their digital fans. Lots of obvious pain points waiting to be addressed, and lots of start-ups offering obvious solutions. But obvious is never disruptive. The opportunity for disruption in music lies in the pleasure of music creation. The idea that only professional musicians, backed by labels, should create music was a relatively short-lived fad (music creation has, for most of human history, been a central part of daily life; some even believe that music was a precursor to speech), and it is so over. So let’s forget about the dying parts of the music industry, and focus instead on the world’s 6 billion living, breathing musicians who are ready and waiting to express themselves through music creation. I assure you there are several multi-billion dollar opportunities there waiting for us, as well as a few viral videos…like this one of a dog singing with her iPad 😉

I’ll close with a caveat to my argument above—it’s not clear that meth (and Internet products like it) are actually sources of pleasure. Rather, they may simply induce pleasure-seeking behaviors that are never fully satisfied, and that’s what keeps people coming back.

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