500 Startups Announces *ALL-NEW* SuperFriends (Wonder Twin Powers…. ACTIVATE!)

This past year has been nothing short of AWESOME for 500 Startups. The #500STRONG family is on every continent except Antarctica, with Venture Partners on the ground in NYC, China, Mexico, Brazil, and Southeast Asia – with more to come!

So what’s the big news? What new superheroes and supervillains have we created or destroyed?  What new element have we discovered?

NEW SUPERFRIENDS IN THE VALLEY

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FIRST: We’re excited to announce that George Kellerman, our resident attorney, UFC fanboy, X-Games athlete, surfer, and firefighter, has been promoted to Partner (GO GEORGE!). George has been leading 500 Startups’ fundraising efforts and investor relations for more than a year. A former Yahoo Japan & Dell Japan alumnus, George also speaks fluent Nihongo and looks very sexy in a wetsuit (but not in a catsuit).

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SECOND: Our Moneyball for Startups guru Paul Singh, part-time tech pundit and GQ India model, is spinning out the internally-incubated Dashboard.io as a new startup, and will become its Founder & CEO.

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Dashboard.io is a new community platform for startups, and just announced a seed round of financing from 500 Startups, Quotidian Ventures, Fortify Ventures, NextGen Angels, LX Ventures, Voodoo Ventures, K Street Capital and others. Paul will continue to work with 500 as a Venture Partner and Sith Lord, along with several junior Sith he has previously brought over to the Dark Side in Silicon Valley, DC, Austin, and Mother India.

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THIRD: We’re pumped to announce we’ve hired the Ghetto-Fabulous Parker Thompson (*NERDGASM*) as a Venture Partner in the SF Bay Area and the latest addition to the 500 SuperFriends team. He’s gonna do epic sh!t in our accelerator program while giving us massive white-boy grunge hipster cred in the San Francisco startup scene. He comes to 500 from Pivotal Labs, where he built dozens of startup products and helped grow the team from 10 to 150 before the company was acquired in 2012 by EMC. Parker also co-founded a social local mobile photo video filtering daily deals hashtag startup, (srsly, dude invented Pong!) – and worked at Internet Archive on big data problems before the term even existed. Basically, he was working in tech before it was cool.

NEW NOT-SO-SECRET #500STRONG BATCAVE IN GOTHAM

As foreshadowed in our previous episode, we just opened our east coast presence in Manhattan’s historic Flatiron district to support #500Strong NYC-based startups. In addition to providing space for our startups (and 500 Venture Partner Shai Goldman), we’ll use the space to host meetups, tech talks, and kickass parties.

NYCThink you’re heroic – or evil – enough to work out of our Gotham HQ? Apply for a space here: http://500nyc.wufoo.com/forms/application-500-startups-coworking-in-nyc/

We also we plan on opening a San Francisco office sometime within the next year, and we’ll have more news on that when it happens.

2013’s already off to a great start, and with our next batch just a few weeks away, we think things are only going to get more epic.

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How We Pivoted Right After 500 Startups’ Demo Day – and Survived

Post Contributed by Mark Kofman. He and Anton Litvinenko are the co-founders of Import2, an online service for automated data migration. With three startups behind them, today they help businesses and consumers to move their data when switching CRMs, help desks or other software.

This is the story of how we shifted gears and changed our team communication tool, 300.mg, into a totally new business idea just a few weeks after we graduated from 500 Startups’ Accelerator. We’re not quite Twitter or Amazon yet, but we still have some insights to share.

How it All Started

In the beginning, things went relatively smoothly; we thought a tool that would integrate all the flows of documents, tasks, and conversations would be indispensable for teams, and people shared our vision. After receiving seed funding from angels and getting into 500 Startups, we launched our product. But something was missing.

It turned out beta users just didn’t feel 300.mg was an irreplaceable tool for their productivity. We spent way too much time trying to figure out how to make it indispensable by coming up with thousands of new ideas – and none of these worked. Sometimes startup ideas just fail, but with all the effort we put into this startup as two co-founders, we were afraid to say it out loud. Finally, someone else did.

Sh!t Gets Real

I remember seeing a tweet from Fab.com CEO Jason Goldberg that said, “If you spend a year on something and you haven’t figured it out, move on to something else… You can’t iterate your way to a business model.” This was the decisive moment for our startup, and it was the day we started to discuss the idea of pivoting or closing down.

We were really lucky to be part of 500 Startups family at the time. We spent hours bouncing ideas off our advisors (a special word of gratitude to Yee Lee), and our fellow batch startups helped us during difficult times (thanks to our Australian mates from Switchcam).

But it was far from a smooth shift. While people may call it a “pivot,” it feels like killing something you believed in and worked super hard for with your bare hands. And as hard as it is to admit to yourself that you’ve failed, it gets a hundred times worse when you feel like you’re letting down the people who believed in you. So in a word, this transition was devastating.

I used to go on so-called “walking meetings” with my co-founder Anton, where we wandered around the city, talking and trying to understand what we wanted to do with our startup and our lives. Did we want to close down the company and start from scratch? Or if we pivot, to what? We also had a couple of job offers on the table as well as some new ideas, like – how’s this for ambitious –  reinventing postal services with focus on online shopping.

We Find Our New Idea

After long hours of introspection,  we finally decided to go in a completely new direction; we wanted to build something that would solve people’s real problems.

First, Timo Rein, my friend from Estonia and co-founder of great CRM startup Pipedrive, happened to be in Silicon Valley. One weekend when we went hiking to Santa Cruz mountains together, the conversation quickly turned to our startups (because seriously, what else can startup founders talk about when they aren’t at work?). Timo told me how importing data for new users was a constant headache for their customer support team. 300.mg used to be a cloud integration hub, so he had this ‘crazy’ idea of using the 300.mg code to help people easily export their data from Highrise into Pipedrive. I thought, “Why not?” and shared the idea with Anton. He liked the suggestion, and we’ve been unstoppable ever since.

We sent out a 300.mg shutdown notice, and funnily enough, it finally got us into TechCrunch. Too little, too late, but oh well. We then arranged a couple meetings with other SaaS vendors to ask if they had similar problems with data migration for their new users – getting 100% validation. And suddenly… jackpot! One vendor wrote us a $5k check to build an import service specifically for his product.

We were like:

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And this is how Import2.com was born without a single working line of code.

While the beginning was pretty sweet, we still had our work cut out for us. Data migration is not the easiest problem to tackle. There were big exciting challenges for us to overcome, but also a lot of less exciting routine work.

Our first customer, Brendan Tjahjadi from Australian SEO company QuantumLinx (who we’ll always remember), wrote us a great review after moving all their company’s records from Highrise to Salesforce with Import2. More customers came in, and they were happy to spend money on a service that saved them so much money and, most importantly, time. As more and more positive reviews were posted online, we finally began to see that we were doing something that real people used and appreciated.

Fast forward 6 months, and we’ve helped hundreds of customers move between online services like Highrise, WordPress, Salesforce, Tumblr, Pipedrive and many others. That is, in total, more than 3 million records of data moved.

Here are some of the big lessons from our experience:

  • Always validate the customer pain. Don’t just believe what people tell you…ask people if they’re willing to pay for solving their problem before you start solving it. If they say yes, that’s a good indicator that the problem is big.

  • Help each other during difficult times. We can’t imagine how this story would have turned out for us without the support of our advisors and friends.

  • 500 Startups is family. We met so many people through 500 who helped us grow and see problems from a different perspective. And the sense of belonging to this big community that is always ready to help when you need it is priceless.

Of course, this is just part of our larger pivot story. If you have any questions for me, feel free to leave a comment below or send me a message on Twitter. You can keep up with what’s happening at Import2 by following us on AngelList.

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Use SCIENCE to Get More Customers: The Distribution Hacking Framework

Matt Berman recently joined 500 Startups as an in-house Distribution Hacker. As part of his role, he launched the 500 Distribution Program where he’ll work 1:1 with select 500 portfolio companies on user acquisition, analytics, funnel optimization, email marketing, split testing, and demographic research.

Have you ever felt completely clueless when starting to think about paid distribution?

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Today, I’m going to teach you the basics of a distribution hacking framework so you can properly test channels – and get more customers.

What is Distribution Hacking?

Distribution hacking is a way to grow your customer base through paid distribution channels like Facebook Ads, Google Adwords or Promoted Tweets. If you’re familiar with “growth hacking” (a very common term now), you already have an idea of what distribution hacking is. Distribution hacking is nearly identical to growth hacking in terms of methodology; the main difference being growth hacking focuses on internal/free mechanisms for growth, while distribution hacking focuses on external/paid channels but uses internal optimization to support external channels.

The biggest misunderstanding about distribution hacking (and just as much so about growth hacking) is that there’s some secret sauce or faucet that can be turned on/off easily to get the hockey stick growth curve. THIS IS FALSE.

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Distribution hacking is much like the scientific method. You hypothesize a distribution channel, set up an experiment and make sure you can isolate and measure your hypothesis (clean data), run the experiment, and confirm results. Once you discover something that works, you optimize by driving down acquisition costs or improving customer LTV (lifetime value).

Distribution Hacking as a Framework

The following is the framework I use when starting distribution hacking with a new product/service:

  1. Define target customer/demographic

  2. Define conversion goal(s) & funnel(s)

  3. Implement/refine analytics tools to track goals and funnels properly

  4. Implement/refine split testing tools to run our experiments and iterate quickly on them

  5. Hypothesize channels to acquire customer/demographic and set up ads on those channels

  6. Execute the acquisition experiment

  7. Optimize the channel or return to step 5

And that’s it! It’s a simple framework that can be implemented by anyone.

What Makes a Good Distribution Hacker?

A distribution hacker is only as good as the rate at which he or she can get through the steps of the framework – and this can only come from experience. Knowing how to quickly set up many variations of ad copy, use each of the ad platforms, implement analytics properly and send data correctly down the funnel is learned mostly through trial and error.

Good distribution hackers will also have a ton of historical data to guide them to their channel hypothesis. Knowing that Facebook Ads work better for certain types of products and services as opposed to Google AdWords can only come through testing.

Start Testing NOW

Distribution hacking benefits startups at all stages. In the early stages, you can use it to conduct research and better understand your customer, while reaching important early adopters. When you’re trying to scale rapidly, distribution hacking can help compound growth. And at the later stages of a startup, it can provide a consistent and scalable way to bring in new users at a positive ROI.

The only way to get get good at distribution hacking is to DO IT. All it takes is some time and money (doesn’t need to be a huge budget, you can start small) to have a better understanding of how to acquire new users. When the time comes to scale your user acquisition efforts, you have a good foundation to start with.

In future posts, I’ll go into detail about specific distribution techniques. Check back soon for more. If you’ve done distribution hacking, please feel free to leave tips below in the comments. And if you have any questions, post them too!

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Southeast Asia (SEA) is Social on Steroids

This month, the 500 blog is taking you to every market in the world that’s ripe for innovation. We’ve already covered India, China, and Brazil – now we’re heading to one of the most social and mobile places on earth: Southeast Asia. Are you an SEA entrepreneur who wants to dominate this market? We want you for our Spring Accelerator batch. Apply today before the March 1st deadline.

Friendster. Multiply. Yahoo360. These early social networks once had their most active user base in Southeast Asia (SEA) –  the region comprised of Malaysia, Indonesia, the Phillipines, Thailand, Brunei, Laos, Cambodia, Vietnam, Myanmar/Burma and Singapore. And now with Twitter, Facebook, and new chat apps, similar patterns have begun to emerge.

What is it about Southeast Asia that makes social networks extra social? Take a look at how the penetration of modern social networks in SEA far exceeds the USA and UK.

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Having grown up in Southeast Asia and studied and worked in Australia and the US, I’ve always noticed that “back home,” it’s more culturally accepted to add and accept someone you don’t know in real life as a friend on Facebook. It’s as though, while using Facebook to connect with friends they know, SEA users are more likely to use Facebook to make new friends too. If Facebook was a party, a Southeast Asian user wouldn’t mind mingling with someone new, while a US user would only want to talk to friends they already know.

This cultural nuance – compounded with the sheer number of people under the age of 35 and rapid rollout of broadband and mobile internet – means that people in Southeast Asia represent a new generation of high-speed, uber-social citizens.

So what does it mean for tech?

At 500, we think the SEA startup scene is on the cusp of going BIG – especially as more startups are able to prove early traction quickly by leveraging these social users and the mobile-focused market. We’ve already invested in companies like TwitMusic (Philippines),Action.IO (Singapore), Golden Gate Ventures (Singapore) and Viki (Singapore), and are currently looking for more badass SEA entrepreneurs who are ready to build something amazing. If that’s you, apply today to be part of our Spring Accelerator.

As I spend the year back home, going deeper into the different markets in Southeast Asia, I hope to share more discoveries with you in a wiki about Southeast Asia’s tech scene.

Feel free to help me with this SEA wiki: https://sea.hackpad.com/
Follow me http://twitter.com/khailee
And subscribe http://facebook.com/khailee

Stay tuned for more insights about this region, and for news about our kickass Batch 6 startups.

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Post contributed by Khailee Ng. He’s the co-founder of GroupsMore (acquired by Groupon) and SAYS.com, a profitable social news company based in Malaysia, and recently began angel investing. Accolades include “HSBC Young Entrepreneur of the Year”, “Best in Asia,” and “Over-energetic karaoke mic hog.” He joins 500 as the first entrepreneur-in-residence and Southeast Asian brother.

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GOAP India 2013: Bold Founders, Optimistic Investors, and a Government that’s Finally Waking up

Geeks on a Plane (GOAP) is a 10-12 day trip to various parts of the world with 20-25 “Geeks” (entrepreneurs, techies, designers, angels, VCs, mentors). The first Geeks on a Plane to India was in December 2011; that’s when I first met Dave, Paul, Christen, George, Anu, Samir, and a bunch of other great geeks. Fast forward 14 months, and I finally got a chance to be a “geek” on the February 2013 GOAP India trip.

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GOAP India 2013 included awesome people on the trip as well as great hosts across India. Here’s what I learned during our visit to Bangalore, Mumbai and Delhi:

India Is A Land of Contradictions

The poor are all over India. It’s still one of the poorest countries in the world. However, the rich are obscenely rich. Driving a $200,000 car is no big deal in a city like Mumbai. And while on your way to a swanky hotel where you’ll pay $900 for a single malt, you may drive by open sewage, dirt piled up on the side of the road, or barking stray dogs in packs. But you’ll also pass by massive skyscrapers, gorgeous temples, educational institutes galore, and many people hustling to make a buck. You can feel the buzz in the air and the excitement of young people who see opportunity in India.

As risk averse as their parents are, many young people are willing to take risks to enact change. For example, at Startup Weekend Bangalore, entrepreneurs pitched a ton of ideas, and two of them really stood out in my mind: Ghati, to enable safe and clear passage of ambulances, and Garbage-busters, which uses mobile phones to alert civil authorities of garbage that hasn’t been cleared. Two years ago, few people would have considered quitting their jobs to pursue ideas that could make people’s lives better. Instead, most of them wanted to build the “Twitter of India” or the “Facebook of India”. Today, many Indians are aware of the problems surrounding them in their daily lives and are taking steps to solve them.

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Great Raw Talent

There’s no question that India is full of geeks with great entrepreneurial and tech talent. Just look at the number of Indian engineers, doctors, and Wall Street analysts that have flourished in the US. In India, parents dream of their children going into the “IT” industry. At first, this meant working companies like Infosys, Wipro, TCS, and HCL. Then it meant PWC, E&Y, Accenture, Goldman Sachs, JP Morgan, Dell, Microsoft, and Google. Today, we have Facebook, LinkedIn, and hundreds of other great US tech companies.

Before 2005, Indian tech entrepreneurs were selling services to companies in other countries, and this made India the outsourcing capital of the world. What they didn’t do was build an ecosystem that fostered entrepreneurship or creative thinking.

This all changed in 2010. Companies like Druva, Slideshare, FusionCharts and ZipDial popped up, and today, we’re seeing startups like InVenture, WebEngage, GazeMetrix and Instamojo. Some of these companies have exited. Some are incredibly cash rich. Some are growing like a weed and continue to raise larger amounts of growth capital.

Investors See Lots of Potential

During GOAP, I met Indian investors who are optimistic about long-term opportunity. Ecommerce, education, travel, personal finance, Universal ID (UID), family tech, rural tech and, of course, outsourced tech are some of the broader themes that investors expressed significant interest in. Sorry folks, “social media” just wasn’t at the top of anyone’s list.

However, as bullish as investors are, most of them still aren’t very founder friendly. Some of the deal terms being offered are still quite onerous. Doing an investment in tranches is another favorite pastime of Indian investors. Most founders still complain about angels behaving like series A VCs, and VCs behaving more like private equity shops.

The bright side is that a few founders mentioned two VCs who work more like startup founders than VCs. They make decisions quickly. They present terms that are fair. They tell founders when and how much they should raise to minimize dilution. They make themselves available to founders at places where founders usually are.

You might say that two VC firms in a country of 1.2+ billion people is insignificant. But in India, VCs running a fund like startup founders is a big deal, and their success will only inspire more to do the same (or lose deal flow).

Investors are Cautious, Too

Investors also spoke to me about some of their concerns, and many revealed they’re not particularly excited about short-term opportunity. Macro-economic conditions, the lack of exits, corruption in the government, bureaucracy, and rising costs all play an important part in dampening the spirits of investors. However, these also present big opportunities for ambitious entrepreneurs. Investors realize this. Though they are cautious, they aren’t scaling back the amount of capital they want to deploy in India.

The Indian Government is Finally Waking Up

During our trip, the Indian Government announced its budget. While this may not be a big deal in most western countries, in India, budget makes or breaks economic sentiment for the year. No one was terribly excited or distraught over this year’s budget, but there were a few things that raised the hopes of startups and early-stage investors.

  • Preferential tax treatment for angels when investing together or “pooling” their capital and registering with the government.
  • Corporations are required to spend 2% of their income on CSR (Corporate Social Responsibility) investments or donations. Incubators at government or recognized universities qualify for claiming the 2% spend.
  • Startups can potentially find some liquidity by listing on the SME exchange. The BSE (Bombay Stock Exchange) runs one and had 11 companies listed as of December 2012.

A much more detailed analysis of the budget and some opinions can be found on VCCircle.

To get an idea of what the trip was like, check out our video of GOAP India 2011.

I’m excited to see how India transforms in the coming years, and can’t wait for our next Geeks on a Plane trip!

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The Secret Pregnant Founder

The following post was contributed by Melissa Miranda, founder of Tiny PostPregnant. That was my big secret when I was pitching (and winning) at Women 2.0 a year ago. Not only am I a female founder, I’ve also led my startup while becoming a mom at the same time.I wish we didn’t have to have this debate so I could be working instead of writing my story. I wish there wasn’t any bias in Silicon Valley. I wish I didn’t have to think carefully about how I could write this so I could still be perceived as a strong and capable individual, not a victim of gender bias or a privileged super hero (or whatever they are calling Marissa and Sheryl).But I write because we need more women in tech, and to inspire someone to join us here is to contribute to the solution.

Truth is that women are treated differently in Silicon Valley. Most people are not aware of their bias, just like symphony orchestras had no idea they were judging female musicians differently until they introduced blind auditions. Just like that, they went from being 90% male to 50-50. We don’t have blind VC pitches here, nor do we have a rigorous data set for Steven Levitt to write a chapter for the next edition of Freakonomics, so we’ll never really know how the gender bias plays out for sure.I can say that I’ve walked into a dinner of aspiring entrepreneurs who were all male and been asked point blank: “So, how come you are here?” because it was inconceivable that a woman would be founder. I also know that some smart VCs recognize their bias and are actively hiring women to source deals (so they don’t miss the next Pinterest). Silicon Valley is human, complete with faults and desire for self improvement.

I do know what it’s like to fundraise while pregnant. Awkward. Do you disclose?  Will they think that just because their wife decided to stay home you will too? Or will it all be irrelevant because the one woman you are pitching to in the room will automatically figure out that someone with your body type would never wear such an outfit unless the midline was out of sorts, and the guy in the room will notice that an excel document labeled Baby List is hanging out on your Chrome download tool bar? That’s what happened one pitch meeting, as they happily told me “we knew it!” when I ran into them again late into my 8th month.

There is hardly any precedent for a pregnant founder pitching. Not long ago, there also used to be little precedent for couples founding companies together. Married founders give investors pause, I know because I’m married to my co-founder. It’s funny to hear VCs wonder out loud how someone could work with their spouse because they could never see themselves working with their wife, and I smile to myself at the utter irrelevancy of that observation. Investing is such imperfect science.

Now that the roster of successful married founders is growing, (thanks to EventBrite, Bebo, and hey even Y Combinator since PG’s wife, Jessica, also works there), investors no longer bat much of an eye at funding married founders. I hope the same will be true of women, and down the road in a more gender-equal future, pregnant women.

Since you are wondering what the F happened when I had the baby, I’ll tell you that we hired a great team that could execute the details while I directed high level strategy taking care of baby. We launched Tiny Post 2 weeks before I gave birth, and released a major update 2 weeks after, and grew like bottle rockets with Apple promoting us around the world.

Was it hard? Harder than I could ever have predicted. It wasn’t just the sleepless nights or pregnancy induced carpal tunnel syndrome, it was being responsible for a tiny human who didn’t come with an operating manual. A few times a week, I was able to walk to the office with baby sleeping in a carrier and bounce on a ball at my computer, but it was really having the full support of my co-founder and team that made it possible. It really took all of us to get through it. I’ve been back at work full time for a while now, feeling refreshed and driven. We’ve got something up our sleeve that will be revealed soon.

Am I going to get stuff accomplished as a founder and a mom? Yes. Being an entrepreneur takes guts to try to accomplish something when all the odds are stacked against you. Perhaps the odds are a little steeper for women, and once in a while I notice it, but I don’t want to get hung up on the gender bias. The best way to have more women at the top is to climb up there myself.

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#500Strong Stories: Facing the Challenges of Being a Female Founder

In addition to having lots of women on the 500 team, we’re proud to say that the startups we support are incredibly diverse, with a healthy mix of male and female founders from nearly every continent. We think it makes the 500 network, stronger, better, and way more interesting. We wouldn’t have it any other way.

International Women’s Day was last week, and we were excited to see lots of great stories pop up about women in tech. Being a founder is hard, and female founders have a unique set of challenges that can make things like fundraising extremely difficult (as if it wasn’t already excruciatingly hard!). Some founders in the #500Strong family decided to join the conversation by sharing their experiences – check them out below:

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Jacqui Boland, Founder and CEO, Red Tricycle

As a first time CEO, I knew fundraising would be tough for Red Tricycle. Raising venture capital is challenging given the best circumstances.

Throw in the fact that I don’t have Ivy League/business school credentials, any startup experience under my belt, a deep Valley network (we’re based in Marin for pete’s sake!) or a technical co-founder. Or even a co-founder. Plus, let’s face it, a media company simply isn’t sexy in VC world, and I’m slightly older (ahem) than your average accelerator grad. And oh yeah, I’m a woman.

So I expected a hard road. And was not disappointed. I heard quite a few “no thank you’s,” as well as a few “you’ve got to be kidding me’s” as I made the rounds. 76 to be exact. Sure, some investors I met with were sexist (How many male CEOs get asked if they’re going to have any more kids?), some were ageist, and some were elitist.

But fortunately, I stuck around long enough to find open-minded, generous and supportive investors who believed in me and the company i’m building (Thank you 500, Maveron, Zulily, and others). As for the rest?  To quote the brilliant Kathryn Minshew “if anything, those experiences simply make me more hell bent on succeeding and proving each and every one wrong.”

My tips for other female founders:

– Do your research (TechCrunch, Women2.0. Venture Beat, etc) and find investors who have a history of supporting female CEOs

– Fundraising is numbers game: the more people you meet with, the more you improve your pitch, become better equipped to answer tough questions, and the more likely you’ll find the right investor who believes in you.

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Samantha Holloway, Co-founder and CSO, GoSpotCheck

I’ve been asked a lot recently about my experience as a female co-founder, and how it might differ from the experiences of my other (male) co-founders. I run sales for us and have gone to many fundraising meetings as well, and I have never been treated that differently than my male co-founders. Maybe I’m luckier than some others have been, but I don’t really believe in luck. The first five seconds you meet someone is usually the time it takes for him or her to make a judgment about you, so I always make that count. It may be more important for women to be confident, to the point, and sound intelligent, but shouldn’t we be doing all of that anyway?

Don’t get me wrong, I have had experiences where I have been treated differently because I’m female, it just hasn’t been specific to co-founding a startup. A few years ago I dyed my hair dark brown (I’m very blonde). I had dark hair for almost a year, during which time I literally noticed people (men) would speak to me differently. Insane, I know, but it appeared as though I was perceived as being more intelligent than when I had blonde hair. It was an amazing social experiment. I wasn’t upset by it, if anything it made me more aware of my initial judgments of others.  

These types of everyday judgments are part of human nature and we need to learn the ways we can act to combat them, even if it means having to prove we are smart enough to have a seat at the table. Maybe I’m more understanding because I have a Psychology background, or maybe I’m just realistic and understand that men and women are different and perceive each other differently. Either way, I think all of us female founders have a unique opportunity to learn from these experiences, share them, and most importantly, keep up the good work.

We hope their stories inspire you to keep pushing forward and preserving. Being a female founder is tough, but it can be done. We’ll have more experiences from founders later this week, so stay tuned!

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This Summer’s Biggest Blockbuster: Geeks on a Plane Southeast Asia!

Our mission at 500 is to find incredible entrepreneurs wherever they are –  whether they’re in Silicon Valley, New York, or Thailand. Big things are happening in Southeast Asia (SEA), and we’re proud to announce that Geeks on a Plane will make its very first trip to SEA this June!

So what is Geeks on a Plane exactly? #GOAP is an invite-only tour for startups, investors, and executives to learn about burgeoning technology markets worldwide. Our geeks travel far and wide to seek out amazing international entrepreneurs and innovators of all kinds. During these trips, attendees gain new insights, meet new friends, and make business contacts from all over the globe. They also have a lot of FUN.

Geeks on a Plane SEA will take place June 1st – June 15th and will be making stops in Singapore, Kuala Lumpur, Bangkok, and Jakarta. Khailee Ng (EIR at 500 Startups) and Dave McClure will be on the tour, so APPLY TODAY if you think you’re geeky enough to hang with the GOAP crew (past geeks have included folks from Google, eBay, GE, CNN, TechCrunch, Etsy, PayPal, and SurveyMonkey). Applications are open through April 3rd, 2013.

Apply now to journey to SEA and be part of the next GOAP adventure!

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What Do Female-Founders Really Encounter When They Fundraise?

The following post was contributed by Elizabeth Yin, Co-founder at LaunchBit

I was fascinated by the article entitled “Money matters: why women struggle in the Silicon Valley” in part, because it’s an inside look into what women founders really do/encounter and for so long has largely been kept secret.

Investors use pattern recognition — they believe that by investing in teams/products similar to past successes, they’ll have a greater probability of success. There isn’t anything inherently wrong with that, but I do believe it makes it harder for teams who don’t fit those “proven patterns.” (e.g. women, certain races, certain ages, certain skillsets, certain lifestyles, etc) As a result, several things follow:

1) If you don’t fit a “proven pattern,” you’ll occasionally hear shocking things while fundraising, and you may walk away wondering how many other investors are thinking those same things but not saying them outloud. In the above article, what the associate said to Kathryn was rude and shocking but not altogether surprising to me. From my own fundraising experience, someone I pitched called me a “meek Asian woman” and questioned how I would possibly ever be able to lead a team of 100+. If I had had that written to me in an email, I would’ve totally tweeted out that sh*t. But, instead, it’s not worthwhile for me to call him out since this angel is actually nobody you would’ve heard of, and it’s also his word against mine. But, if I were in Kathryn’s shoes, I would totally blast out that guy/firm since she has it in writing.

But pattern recognition goes beyond gender. I have a friend who pitched an investor who said, “You didn’t graduate from an Ivy or Stanford so I don’t know how you’ll grow your company.” My friend’s response was “Oh yeah? Watch me b*tch” and walked out the door.

2) The flip side is that those who don’t fit “proven patterns,” try to combat this by doing as much as they can to fit in. I have a friend, a female CTO startup founder, who would get into big discussions with her male co-founder about what she was going to wear to a pitch meeting. They argued about whether she should dress more masculine (because she was the CTO, and most CTOs today are men) or dress more feminine (because that would be more appealing to mostly male investors). They discussed whether she should get fake glasses (she has perfect vision) so that she would look more geeky.

In my own experience, I have data to suggest that certain outfits I wear are more successful than others. I’ve been meaning to write a data-based blog post as a part II to my blog post above, but I just haven’t had the time to make the charts and graphs yet. Sneak preview: for our seed round, my wearing shorter skirts worked better than pants. I’m partially embarrassed that I know this, but once you see your own fundraising-success correlations, of course you’re going to try to milk it for all it’s worth, right?

There are other things that are a bit harder to mask. When we were fundraising, my co-founder was about 9 months pregnant — literally on the verge of going into labor. Having read Paige Craig’s post on almost not funding founder Jessica Jackley because she was pregnant, this was a topic that was top of mind. I figured that at least some investors must have a terrible fear of women getting pregnant.

As a woman (though I’m not a mom), I have to say this is one of the most ludicrous thoughts that some male investors seem to have. Yes, it takes a lot of planning to figure out how to juggle children (in my co-founder’s case, she and her husband lived with her parents who took care of her kid for over a year). But, I don’t know of any female founders who woke up one morning thinking, “You know what. I give up on this company-thing. I want to just stay at home.”

Don’t get me wrong — I do think it’s probably harder to juggle younger children as a female founder, because just physically-speaking, you have to do things like give birth, recover from that, breast-feed, etc. But, I think women-founders who want to be parents think very deeply about all of this and create plans to enable them to work hard on their startup. They are not just willy-nilly having children.

But I digress. For our round, Jennifer and I decided that she would not go to fundraising meetings unless absolutely necessary. With the exception of 500Startups (and @andrewchen), no one else in our round knew at the time that she was pregnant (well, there may have been some ppl who saw her at Demo Day). The flip side is that 100% of investors who asked to meet with both of us, declined to invest. I don’t know if they declined because she was clearly pregnant or whether they just didn’t like something about us/our business. I’ll never know, but that’s what the data shows.

What is interesting, though, is that one investor kept asking us throughout that process how Jennifer’s labor was going and whether she was back to work. Jennifer was back to work within 2 weeks of giving birth, and he was surprised. (I don’t know if he was asking just because he cared or because he was curious how we were handling the situation) Though his VC firm passed, he came in as an angel investor. So, perhaps we were able to use this disadvantage to an advantage. I’m not really sure.

Another female friend of mine was fundraising around the same time. Unlike us, she was a successful female founder who sold her prior company for hundreds of millions of dollars. But, she was also 6 months pregnant with her first child. To mask her pregnancy, she wore baggy clothes and leaned over a lot during her pitch meetings.

She confided that she was pregnant to one investor, though. And, his reaction was, “I’m pulling out of your round. You’ll just want to stay at home all day after you give birth.” And, she explained her plans for childcare, to which the investor responded, “Well, I don’t believe you. My wife just wanted to stay at home after our first child.” Obviously a ludicrous argument, because VC wives are not typically out pitching to have their startups funded. But, it was very telling to me what some investors (or perhaps many) think.

In short, between the wardrobe decisions, the pregnancy-cover ups, etc, entrepreneurs, as much as possible, try to combat pattern recognition with pattern recognition.

3) Then there’s the little comments. The problem is that these little comments in themselves are not bad/wrong. But, over time, they reinforce the environment that startups are built by “White (now also Asian), male hackers.” When Jennifer and I would go to startup events a few years ago and people would ask us who built our site, we would be confused. We built our own sites. And the reaction would always be “Wow, you wrote the code and everything?” Of course we wrote the code — we’re the only people on our team — who else would write it?

The first couple of times this happened, I didn’t understand why people were asking such dumb questions. But, after a while, it dawned on me that perhaps people didn’t think we could code? The thing is I’m not sure if people were just thinking “Wow, you wrote the code” because they really liked our sites (doubtful) or “Wow” because they didn’t think women could code? I have no idea, and I wish I’d asked. These days I half joke, “Oh, why do you ask? Because we don’t look like we can code, haha?” And, that always makes people uncomfortable and then come up with some lame response and walk away.But I do think it’s important to call people out on this. Make people feel a bit uncomfortable, because they may not even realize they have weird stereotypes going on in their heads, and this illuminates them for at least a few seconds.

These little comments are not just about coding, though. I’ve been to startup events where it’s been all men and me. And, people will think I’m the caterer or the event organizer (even as I’m scarfing down the food and drinking all the beer). And, just to be clear, there’s nothing wrong with being a caterer or an event planner, but it reinforces to me that these stereotypes about what entrepreneurs look like definitely exist. It’s gotten better — with more and more women starting companies, this happens less and less to me (or maybe I just go to fewer startup events now). It will change – it’s a work in progress.

As ridiculous as much of the above may sound, at the end of the day, most female founders I know (myself included) are reluctant to share tales from our fundraising experiences. Frankly, we don’t have any proof that investors who turned us down did so because we were women (or pregnant or whatnot). Fundraising, in general, is a hard activity for both men and women entrepreneurs. Yet, while I’m averse to speculation, I’ve decided that now’s the time to illuminate at least the truth of what I do know some female entrepreneurs encounter during the fundraising process.

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The Phone Number is Dead – Voice Over IP Demystified

Facebook recently announced that Facebook Messenger would let users call each other through VoIP.  Microsoft bought Skype. Google has both Google Voice and Google Talk.  And the recent emergence of WebRTC is finally warming the waters for the web nerds among us to dip our toes in the stagnant waters of telecom.

Let’s face it – Voice over IP Is becoming ubiquitous, and the phone number’s days are, well, numbered.

At my startup Speek, we’re fixing the conference call. In order to do this, we must dwell in both the web and telephony worlds. This means we must have an intimate understanding of traditional telephony as well as emerging Voice over IP technologies and trends.

I’d like to simplify the VoIP world that is a black box to most startup junkies, technical and nontechnical alike.

Before we start, let me properly set expectations: If you think the world of web technology is hard to wrap your head around, telecom tech will make your head spin. Allow me to introduce you to the world of Voice over IP (VoIP) and telephony:

The Public Telephone Network (PSTN or POTS)

The public switched telephone network (PSTN), is actually more easily understandable under the other acronym by which it is commonly known: POTS, or “plain old telephone service.” This is what most people, especially if those people are your parents, think of as “the telephone”: it consists of all phone lines, cell networks, undersea phone cables, etc. which are connected by switching centers (the electronic exchanges that do what operators do in any movie filmed in black and white). Originally analog, the PSTN now has an almost entirely digital chewy center.

Translation: When you dial a phone number of any kind, your call passes through the public telephone network. It doesn’t matter if you’re calling from your home phone, office phone or mobile phone. Note that while the public telephone network revolves around the concept of a phone number, apps like Skype that “call” using usernames rather than phone numbers most likely do not leverage the public telephone network.

As phone number-less VoIP adoption increases the demand on the PSTN decreases. This is good.

Voice over IP (VoIP)

VoIP (Voice over Internet Protocol) commonly refers to the anything and everything that allows for voice calls over the Internet, as opposed to through the PSTN. You may have also heard IP telephony, Internet telephony, voice over broadband (VoBB), broadband telephony, IP communications, and broadband phone. These basically all mean the same thing.

Translation: If you’re talking to someone and did not use a phone number to reach him or her, you are most likely using VoIP. Common VoIP protocols and software that you may have heard of are SIP, RTMP, XMPP, Jingle, Skype, and Google Talk.

Open Source Telephony Software

Asterisk is software that allows connected telephones to make calls to one another, and to connect to other telephone services including the PSTN and VoIP. Its name comes from the asterisk symbol (*).

Translation: Asterisk is open source software that lets you do cool stuff with telephony that was historically proprietary and/or hardware-based.  Mark Spencer, a smart telephony hacker guy, created asterisk in the late 90’s.  Some of the hacker guys who helped Mark thought he wasn’t doing it right; they left and created freeSWITCH.

WebRTC

WebRTC is a free, open project that allows browser-to-browser applications to work easily without plugins.

Translation: You know how bad it sucks to try and do real-time audio or video in a web browser using Flash? WebRTC makes it so that you no longer need to use Flash. You can now do things like VoIP and video chat natively inside the browser.

Google essentially bought up many of the pieces needed for developers to do real-time voice and audio apps easily and directly within the browser and then open sourced them. Browsers have started to ship with full WebRTC API support built in. This will allow more and more communication products that leverage real-time video and/or audio to bake in a very clean and seamless user experience without requiring a download.

WebRTC is f’ing awesome and you should get familiar with it.

Traffic Pumping/Access Simulation

When a long-distance call is made, the call usually passes through more than one telephone company, starting with a local carrier, which then transfers the call to a long distance company, which then re-transfers that call to the local carrier at the destination. The long distance companies have to pay a fee to the local carrier it places the call to, which is called an “access charge.” – From the FCC

Access stimulation, or “traffic pumping,” occurs when a local carrier does a shady deal with a company that runs a high volume of calls, such as chat lines, psychic and phone sex hotlines, or “free” conference calls. The local carrier gets a much higher volume of calls than it would without the arrangement, and in turn gives a kickback to that company. Does this sound like it should be illegal? Good news: it’s becoming illegal.

Translation:  Rural telecoms get paid money by the government for each phone call that is made into numbers in their area code. The original purpose was to help stimulate innovation in these rural areas. Free conference call companies and sex hotlines in the form of a “traffic pumping” scheme have misused this government policy. The scheme splits subsidized dollars with the rural telecom as the teleconference provider or phone sex line generates inbound calls. This money comes out of your pocket one way or another. Not cool.

Thankfully, the FCC recently adopted rules designed to reduce the ability to engage in access stimulation. Plus, you can’t have traffic pumping without phone numbers.   Chalk up yet another win for VoIP.

danny speek full shot headshot

Post contributed by Danny Boice. He is the CTO of Speek – a 500 Startups-funded startup that lets users do conference calls with a simple link (speek.com/YourName), rather than using phone numbers and PINs.  A serial startup/technology entrepreneur and executive, Danny started his career as a software engineer working for startups like Network Solutions and MusicMaker.com in the 90’s. Danny founded his first company, Jaxara, in the early 2000s (exited via acquisition) and co-founded Speek with John Bracken in 2012. Danny attended Harvard.

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