Revisiting the Most Memorable Companies of 2008

August 25, 2010

In December of 2008 I identified 5 start-ups that impressed me during that year (Most Memorable of 2008).  Now, over a year-and-a-half removed from the initial post, I think revisiting these start-ups should be fun.  Using the companies’ website trafficgrowth (from Quantcast), additional financing (from Crunchbase), new customers, and qualitative growth analysis I will create an outlook for each company.  I’ll be using a scale of 1-10 to score each company’s outlook for success, 1 being poor, and 10 being extremely promising. Without further a-do:

Company: Mimoco (Mimobot)
Location: Boston, MA
Website: http://www.mimoco.com
Product: Designer USB Flash Drives
2008 Monthly Website Traffic: ~4.5K Visits
2010 Monthly Website Traffic: ~10K Visits
Financing (After 2008): $N/A, by Cyan & Scott Banister
New Customers: Flight001, Toy Tokyo, Henri Bendel
Growth: Mimoco has added to their product line, including iPhone skins and limited edition figurines.  I’m surprised that their product line of character inspired computer accessories has remained dormant; with USB flash drives remaining as their only functional Mimobot.
Outlook: I believe the real growth opportunities remain in the novelty computer accessory market and development in this space will determine Mimoco’s long-term success.
Outlook Score: 5

Company: Boxee
Location: New York, NY (World Headquarters in Tel Aviv, Israel)
Website: http://www.boxee.tv
Product: Media Center Software
2008 Monthly Website Traffic: ~8K Visits
2010 Monthly Website Traffic: ~10K Visits
Financing (After 2008): Series B (08/2009) $6M, by Spark Capital, Union Square Ventures, & General Catalyst Partners (Total Raised: $10M)
New Partners: NHL, MLB, KoldCast TV, Funny or Die
Growth: Boxee has steadily added new content providers, thus making the service valuable to a wider demographic.  They will be releasing a piece of hardware called the Boxee Box in November that will “play HD videos from the web or a local network in 1080p and use hardware acceleration whenever possible. And provide a TV browser experience that can handle almost everything you throw at it, including Flash 10.1.” (Source)
Outlook: Boxee requires hardware to run on your television, which may hinder its adoption, especially now that televisions may be directly connected to the Internet. I foresee a movement to reduce the clutter around the main television screen in a house, and this may hinder Boxee’s success.  Also, the amount of content cable providers offer customers has dramatically increased, making the need for additional content fade away.
Outlook Score: 3

Company: HubSpot
Location: Cambridge, MA
Website: http://www.hubspot.com
Product: Inbound Marketing System
2008 Monthly Website Traffic: Less than 500K Visits
2010 Monthly Website Traffic: ~3 Million Visits
Financing (After 2008): Series C (10/2009) $16M, by General Catalyst Partners, Matrix Partners, Scale Venture Partners (Total Raised: $33.5M)
New Customers: Schwartz Communications, Visible Measures, New York Parking Ticket
Growth: Holy Hockey Stick! Hub Spot has gone from less than 500K monthly website visits to over 3 Million.  They now offer 3 products, but their toolbox for inbound marketing has grown experientially with its Inbound Marketing University (certification), and family of grader.com websites (to grade content scores for corporate websites, blogs, Facebook, Twitter, and other online presences).
Outlook: Hubspot’s goal is to be a billion dollar company.  A billion dollars seems outlandish for a company playing in the small business market with plans starting at $250/mo.  I see few barriers for Hubspot to break $100 Million in revenue in the next few years. Look for them to go public in 2012.
Outlook Score: 9

Company: Inigral
Location: San Francisco, CA
Website: http://www.inigral.com
Product: Secure Learning Management Facebook Application called “Schools”
New Customers: Arizona State University, University of Texas – Tyler
2008 Monthly Website Traffic: N/A
2010 Monthly Website Traffic: N/A
Financing (After 2008): Series A (06/2009) $2.4M, by Unknown (Total Raised: $3M)
Growth: Inigral has signed-up a few new customers, but failed to make much traction over the past year and a half. The Arizona State Facebook Application has over 13,000 monthly users, which is a glimmer growth.
Outlook: Colleges may not see the need to pay Inigral for a Facebook Application when they feel comfortable managing educational information via their robust Learning Management Systems (LMS) such as Blackboard.  I would watch for Blackboard and other LMSs to build their own social integration tools, making Inigral’s future uncertain.
Outlook Score: 2

Company: Igloo Software
Location: Kitchener, Ontario, Canada
Website: http://www.igloosoftware.com
Product: Social Networking Enterprise Software
New Customers: Blackberry, Deloitte, NetApp, AstraZeneca
2008 Monthly Website Traffic: N/A
2010 Monthly Website Traffic: N/A
Financing (After 2008): No Additional Financing
Growth: Igloo has added an impressive list of names to their customer portfolio and segmented their offerings into 4 industries: Enterprise, Government, Healthcare, and Agencies.  They’ve also built integration with Microsoft SharePoint, Salesforce.com, and Blackberry.
Outlook: Segmenting the target customers should prove to be beneficial for Igloo.  They’ve identified the industries that need social collaboration tools, and are directing relevant messaging to each specific segment.   Also, integrating with other enterprise programs is necessary for success because corporations want streamlined processes.  I foresee Igloo being acquired by a large enterprise software player within the next 3 years.
Outlook Score: 8

Overall, I still feel confident that Hubspot and Igloo Software will be homeruns, the jury is still out on Mimoco, and believe that Boxee and Inigral need to make big strategic moves to stay afloat.  I look forward to looking back in another year-and-a-half to see how they fare.

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Why Facebook Apps Suck

August 16, 2010

Young Passionate Entrepreneur (YPE): “I’ve got this great idea and I’ve done the research to prove that the market is $X,XXX,XXX,XXX big!”

Seasoned Internet Professional (SIP): “Sounds interesting.  What’s the idea?”

YPE: “A website that finally lets people _______________ (fill in the blank).”

SIP: “Pretty cool idea.  How do you plan to scale?”

YPE: “Easy.  Events, SEO, AdWords, and connecting to Facebook through Facebook Connect.”

SIP: “Sounds like you’ve done your homework, but your idea SOUNDS LIKE A FACEBOOK APP.”

I’ve heard “Sounds Like a Facebook App” so many times, but are we really thinking the phrase through before speaking? Why does any new website that connects friends via the web always “sound like a Facebook App”? What if LinkedIn, Twitter, or Foursquare (all naturally sound like Facebook Apps) started as Facebook Apps? Would any of them be where they are today, even if it were just to test the concept?  There are very few success stories for Facebook Apps other than Zynga videogames, which are the rare exceptions, but remember these are videogames, not Web 2.0 sites.  Converting a website concept to a Facebook Application will set it up for failure because people don’t trust Facebook’s sharing of private information with 3rd party developers and Facebook Apps require users to commit to providing their sensitive Facebook information before allowing users to test the applications.

Facebook has become an information depository; users blindly place all of their personal information and data (no matter how sensitive) in their Facebook accounts, only controlling how others access this information via their Privacy Settings.  Unfortunately, Facebook has demonstrated a pattern of privacy gaffs, creating an almost tangible distrust with its users.  With updated Privacy Settings on an annual basis, and with new settings defaulting to “Public,” Facebook users don’t know how to 100% protect their sensitive information.  Even though, users are presented with a warning of the exact information that will be shared with applications, they often ignore or distrust them.  When connecting to a Facebook Application users often feel like they are rolling the dice, hoping that the information they view as sensitive remains private.  For a user to risk sharing their private information with a random developer by connecting to an application a great degree of social proof must be demonstrated.  According to the social proof hypothesis, Facebook users won’t sign up for an application unless they see their friends signing up.  With all the noise going through newsfeeds, it will probably take more than 1 (probably close to 4-7) friends signing up for an application before you notice.  The obstacles for a Facebook Application to gain the exposure needed to provide social proof for a user to consider providing their private information is immense.  One may argue that the same exposure obstacle exists for off Facebook applications that connect to Facebook via Facebook Connect, which is different because of the ability to sample the application (build trust) before committing to providing sensitive data to the developer.

Facebook Applications require users to provide their personal information before trying them out.  When a user identifies a Facebook App that seems intriguing, he/she may see screenshots of the application via the application’s Facebook Information page, but in order to tryout the application permission must be granted through the Request for Permission pop-up box. The Request for Permission pop-up box is where users usually change their minds, and decide that it is not worth the risk of giving away personal information to a 3rd party developer for an application that they haven’t even been able to try, and click the “Leave Application” button.  With Web 2.0 sites, users often are only required to enter a username and password to gain access, and may add additional information to their user profiles at their discretion.  Once the Web 2.0 site proves itself useful and trustworthy, the user may select to share their use of the Web 2.0 site by connecting with their accounts through Facebook Connect.  Connecting with Facebook Connect allows the Web 2.0 site to communicate with the users Facebook profile, allowing the user to share information from the Facebook user account with the Web 2.0 site and vice versa.  In many cases, users’ of Web 2.0 sites may share what they do on the Web 2.0 site through their Facebook newsfeed (which may even include a link to the Web 2.0 site) after connecting to Facebook on their terms via Facebook Connect.  People understand that they must be more responsible with their Facebook information, and are becoming more selective with whom they share their information with; thus developers must first build trust with their users before asking for their sensitive information; a process that Facebook applications DO NOT support.

Selecting to go-to-market with a Facebook Application rather than a Web 2.0 site that uses Facebook Connect is not a small decision, and through the proper user behavior analysis it becomes clear that Facebook applications limit adoption because users are not willing to share their Facebook information with 3rd party developers before trying applications on their own terms. Finding examples of non-videogame Facebook Apps that have a large number of users has proven difficult.  I welcome your comments regarding Facebook applications and what types of web applications are best fit to be tested and introduced as Facebook Apps rather than Web 2.0 sites.


I’m Baaaaaaaack!

August 13, 2010

Blogging is a never-ending commitment; a commitment that I’ve neglected over the past year and plan to resurrect.  Today I will restart blogging as The Boston Entrepreneur, providing the expertise and insights that achieved such recognition as one of the Top 150 Blogs for Entrepreneurs.  Come back next week for the first full-length post in the return of The Boston Entrepreneur.