Monday, December 23, 2013

Winners at the December Startupalooza

We really appreciate everyone who came out in that challenging weather.

The winner was iSpeech with its exciting new talking "Stickers" product
The runners up were:

Nonnatech, an intelligent remote monitoring environment for eldercare.

Evospend, a "white label" debit card service for small retailers.

Cream, a fashion retailing marketplace that monetizes fashion bloggers.

As we saw, the entrepreneur community is alive with ideas - as we expand, we are opening this up to new kinds of deals and out of town Start-ups.

Please feel free to share your thoughts.

We wish you Happy Holidays and a wonderful New Year!

Judge taking a pitch

Winners iSpeech talking to judge

"Voice" singer Cameron Novack performs for judges

Wednesday, December 4, 2013

Winners from the November Startupalooza

November was one of the biggest Startupalooza's of the year with over 40 presenting companies.

Streamed-In Presenters

Winner: SaveOn
Congratulations to the winner, SaveOn - the Kayak-like supermarket price and sales aggregator

They will be participating at the Private Equity Forum on January at the Yale Club - a $1500 value.

The first runners up were:
Patients Create The patient-centric crowdsourcing platform for healthcare development.
Dashbid - The software and service to help publishers increase video ad revenue yields.

Streamed-In Presenters

The Second Runners Up were:

Ledger - the prepaid corporate card company.

HandsFree -  Quikiks Hands-Free Shoes allow people with physical or cognitive challenges to step easily into and
fasten their shoes without hands.

Simbiot - Cloud-enabled platform for research and collaboration for science researchers to handle Next Generation
Sequencing and other genomic data.

KidKlass - "Open Table" for scheduling children's classes. 

Ca7h - Wearable connected camera that combines beauty, the power of smartphones and the internet. 

BeautyStat - The cosmetics deal site.

We will be releasing the composite Judges' rankings so entrepreneurs can see how the investor community ranks 

your startup.
While we run this as a contest, we understand this is often about comparing apples to oranges - nevertheless, it is 
an invaluable guide. 

For that reason there are many winners - each with their own funding possibilities.
Back In December 9 (Virtual)  & 16 (Live!)
We will be back on December 17th with a Year-end Startupalooza.
We will be doing a Virtual Startupalooza pitch event n Dec. 9 that you can sign up for here.

Anyone signing up for the virtual event goes to the live event free!


Alan Brody and the Startupalooza Team


Wednesday, October 2, 2013

iBreakfast Startup - Violin Memory - Makes Music on Wall Street

Violin Memory IPO’s at $800 million

Back in 2006 when the iBreakfast ran a workshop at NYU’s Entrepreneur Club, we were presented with arguably one of the worst pitches we had ever heard. But also the best.


Technically, the pitch was confused and mumbled – but it described a fantastically big market on the edge of a tectonic shift. Most of all, the presenter was authentic. Donpaul Stephens was an engineer masquerading as a marketer with a patent-pending tech solution for a transformational enterprise flash memory product. He could have been Bill Gates' younger brother - and I once had lunch with Bill, so I would know.

Violin's CEO shows off product
The amazing thing is that every investor I sent him to or heard about it in New York turned him down. The deal was tough – they needed $5 million to launch – and almost no one understood the actual technology. In fact, several claimed it wouldn’t work.

For those of you who will be reading my book Are You Fundable? and wondering how to overcome these odds, take heart. They went public on the NASDAQ on Friday at an $800 million valuation.

This was not a simple story but that is exactly why it matters. You learn more from a sleeper that kept going than an overnight success. Or to put it in Violin’s terms it is more like a symphony with a lot of movements than just a catchy tune. More often that not, this is the story of most big Startup successes. 

The first rule in Are You Fundable? is that credibility – the ability to instill a belief in others that you can deliver - is critical. It helps if you pick a market that is expanding or about to be transformed. Then you have to find the right kinds of investors.

This sounds easy enough but consider: market that is about to transform means that you are betting on a change in the industry and you hope the road will rise to meet you. Investors tend to be skeptical about these things. Silicon Alley prefers to talk about disruption - a cheaper approach to an existing business. That tends to be a little easier to predict just so long as the entrenched companies don’t fight back.

With transformations, you have to find the right kinds of Investors the ones who get it, because you can burn yourself out on all the ones who don't. Even then, the right investors are may not be ready for you. That means you have to break the idea down and build it up in steps.

The problem here was that they needed the large amount of money just to build the box to prove that it really worked. For whatever reason, they couldn’t simulate it on a computer the way say, Bill Gates did with his operating software in the early days of Microsoft when he used Harvard's mainframes to simulate the pioneering Mitts Altair - the first personal computer and port BASIC to it without ever actually seeing tit. To make matters worse this pitch was taking place in New York - a town that really doesn’t do hardware. 

While Stephens had two previous exits and so technically was a serial entrepreneur, he wasn’t known to the investment community and the deals weren’t really home runs. The big hurdle was the price tag – Startups in Silicon Alley rarely raised more than $500K and usually came in at the $50K – 200K range.

I could definitely convince investors that enterprise storage will always want faster processing, lower power, and less heat and that flash memory prices would drop. Even though the cloud hadn’t really kicked in – the iPhone had just launched at the time – and flash memory was 100x more expensive than hard disks, Investors understood how that would change and just how big the Enterprise market would be. But the price tag was in the VC range and simply out of reach for the Angels – even if they had believed in the solution.

How do you overcome these hurdles?

The answer is, find a champion. It needed a committed insider who knewa the memory business and is willing to put skin in the game. At that point the money requirement is relatively minimal - in the low $100K’s. The champion then has to call in favors from all his industry contacts. It also helps if you can find a big problem that someone with deep pockets needs to solve. Enter the Department of Defense which thirsted for fast memory to process battle pictures. That helped with proof on concept and eventually led to industry orders and VC money.

None of this was easy and the music stopped for Stephens last year when left the company – with founders stock of course - before it went public. The company itself had its share of the blues -fluctuating from a fantastic $2 billion valuation to a not too shabby either $800 million after they lost a big customer and the market suddenly got crowded. But it will be a long time before the proverbial fat lady sings - the enterprise flash market is just getting started and there will be plenty of hits to come. Stephens will cash out after the lock-up period and like any good Entrepreneur will be on to his next Startup.

We will be out there grooming our next crop of amazing Entrepreneurs at the iEvening, Startupalooza and the iBreakfast and you can read about our way of thinking when Are You Fundable? comes out next week. Or just come to our next workshop and experience it live.

Are You Fundable?
eBook or Print

Tuesday, September 3, 2013

Why the Lindhout Kidnap Story in Somalia is like a Startup You Shouldn't Invest In

As I am finishing the last chapter in my "Are You Fundable?" book - on "Vision Quest Startups" - I see this harrowing tale of a "venture" gone wrong.

While it seems like Amanda Lindhout was a driven but naive journalist, she was actually on a subconscious mission to relive the story of her mother's religious abduction 11 years earlier. 

(The Times omits this but it came up in the NY Post

In my experience, Investors have seen plenty of these "Vision Quest" startup scenarios and the smart ones have a special radar for them. Generally, they are big losers because the founders tend to ignore market realities and are impossible to deal with. 

And then you have a Steve Jobs! So how do you tell the difference?

You'll have to read my book....

By the way, this is not an affliction dedicated to the young - it happens with mature folk too!

This is my comment published in the New York Times.

Wednesday, August 28, 2013

How MTA's Ticket Kiosks Help you Miss a Train

Typical Kiosk User in Deep Contemplation
Now that the former head of the MTA is running for Mayor, it is worth asking: how can a man who turned the simple act of buying a train ticket into a Kafkaesque nightmare run a city as complex as New York?

The MTA ticketing kiosk is a metaphor for everything that can go wrong when institutions go digital. It violates just about every rule of user interface - from ease of use it asks for too much information, confuses the user and faulting them for errors) to punishing the user with a surcharge and threat of eviction from the train.

We can only hold our collective breaths and imagine how this would translate into City Mayoralty.

8 Steps to Missing Your Train with the MTA Ticket Machine
by Alan Brody

Can a kiosk interface design be so bad that it causes thousands of people to miss their trains every day? Then, instead of fixing it, they punish people who give up in frustration by hitting them with a near doubling of ticket price on the train. Plus, they force them to use cash - or else!

Institutions tend to deny design flaws and blame it on the consumer. You’ve probably heard about the MTA’s “tripping stair” in a Brooklyn subway. By being slightly higher than all the other stairs at the entrance this step caused people to fall all day long. The MTA ignored it until someone captured it on YouTube and they were forced to fix it out of embarrassment or potential lawsuits.

Now, look what happens when those same great minds got to work on a ticketing kiosk. Not only do they trip up the passenger but they pretty much guarantee that the untrained – no pun there! - will not make their train. So many have given up and headed directly for the trains, that the MTA almost tripled the on-train ticket price. 

As an occasional user I never quite realized what a bureaucratic obstacle course their kiosks were until I almost missed my train while attempting to buy a ticket. One wrong choice and I was done. Add a few anxious passengers behind me along with daytime glare and it was virtually impossible to read all the choices and so I gave up and paid on the train, thinking it would be a few dollars more. In fact it was $7 more – or almost twice the fare. And they only take cash. Ouch!

Then, when I returned from Grand Central Station, a technician who happened to be servicing one of the machines began laughing at me when he noticed my bumbling: “They ask too many questions, don’t they,” he said.

I was stunned. So they know this. “Well, don’t you tell them?” I asked, thinking just how compelling direct intelligence from the field would be.

“I do,” he said, “but it goes nowhere.”

So what goes on at MTA and their digital interaction with ticket buyers. There is no express route on the kiosk just a path that may lead you to desperation.

Here’s how the MTA bends the mind of passengers - in 8 excruciating steps.

Step 1: So You Want to Buy a Ticket?

The first screen delivers 5 choices. The problem is the largest box - and therefore the one you'd think is most important - has no useful information. It asks for "All other tickets." Obviously, they thought that by putting it at the bottom right of the screen, you'd get that because you would naturally be looking at a page from the top left, like any book or newspaper. But viewers don't look at screens the same way they look at books. They typically do an overall scan before focusing - from a visual perspective, the biggest box looks the one to start with. Once forced to go hunting for the right box, you get an idea about the code: Important stuff on the upper left, optional stuff on the lower right.

Step 2: Where Would You Like to Go?

Here they do something almost right. The choice boxes may look quite different from the first screen but they show signs of real intelligence: it guesses that I, probably want to go to the Big City and so it puts Grand Central up first. Where else would a suburban want to go? Believing that the system is working for me, I forget about the shift in style and make my selection.

Screen 3: Peak or Off-Peak. (You will need more than a peek!)

Just as you thought you were dealing with intelligent design - you are thrown back into the Dark Ages!  In a masterpiece of misdirection it asks this seemingly innocent question: Peak or Off-Peak?
Good question bout how would I know? Shouldn't it assume that I am most likely buying a ticket for the next train and then ask me to confirm? Instead, it offers to explain what constitutes Peak and Off-Peak. The print is small but OK, a small price to pay for help at your fingertips. But then they throw you a little slider: it tells you from the point of view of the arrival time at Grand Central and not from the departure time at your station. So, now you have to know the exact time of the next train's departure so you can do the math. If that means having to consult a schedule, then you'll quickly notice they are nowhere near this kiosk.

Screen 4: So Did You Want "None" (After All That!)?

In the next screen, it starts out by offering you nothing. Choice no. 1 is None. Luckily, they rush to explain that None actually means ticket only. In other words, they are saying things don't really exist unless you get a MetroCard, but sure, we'll throw you a rail ticket if that's what you want. Then, when you got the ticket you probably deserved, you find the ordeal isn't over. You still have to pay for it - and that is not so easy.

Screen 5: Ready to Pay?

Like a desperate salesman who won’t let you out of the room until you’ve bought more than you bargained for, they stretch out again with a big box asking if you want More Tickets. They even add a contrasting green background to pump it up. I am not sure who in their right mind would more of their tickets at this point, but at least we know to look for the key information on the left side. This time it is mid-screen and they make it easy to confuse Credit and Debit. If you do go off on a mis-step, recovery is not easy. The breathing from behind you will blast like furnace while their occasional sighs will break out a cold, cold sweat.

Screen 6: Insert for Relief

Let’s say you got this far. You dodged the fake-outs, the headscratchers and the unwanted offers. You have selected the right kind of plastic and now, all you have to do is insert your card. You get a ticket, they get paid and the digital torment is over!

Screen 7: Enter what?

Not so fast.

If you’ve ever pumped your own gas, you’ll know the score. A screen pops up with: “Zip Code?” and a keypad will let you input your 5-digit number. But that that would be much too easy Why be clear? So, in small type they make a long winded request: “Please enter credit card billing ZIP code and press OK to continue.”

If your eyes are week or the sun is glaring, you may not see this small print. Instead, you will see a massive keyboard. Since the important information is on the left you might wonder: why else would there be letters unless they expected me to type something? Will they need my name and address? Maybe a comment.

If you were able to read the small type in the header and went straight to the number pad you'd be doing fine. Still, you just might wonder what the keyboard is for? After all, it does occupy 2/3 of the screen. So what Zip code requires letters? That would British or Canadian postal codes! And yes, I checked with the MTA, they put the alphabet keyboard in there on the off chance of a visiting commuter, say a Briarcliffe Brit or a Croton Canuck.

Screen 9: Bummer!

Let’s just imagine the possibility that, after all this you didn’t hit the right key exactly. Perhaps it was the enraged gasps of the passengers behind you or the roar of the oncoming train. Let’s say you hit a letter instead of a number or you just didn’t put enough pressure on the keypad and so, after you hit “Enter” you get the above error message.

You would want to correct it - but that is not the option here. Instead, you will have to go back to the previous screen asking you to dip your credit or debit card.

Whoosh.....! The sound you hear is the train going by.

Some people I have spoken with, buy their tickets in advance so they won't have to endure the pressure. Others head directly for the train, where they discover the penalty awaiting them or, if they have the option, buy a ticket from one of the few remaining live ticket clerks.

Either way, the big question remains – is there a penalty because the interface is so bad or are they look for a way to increase on-train ticket purchases so they can fleece 'em with fat surcharge? Or is the MTA in the adult education business, fostering greater screen awareness with subtle brain teasers? Or, is this just an elaborate racket designed to get a payday from passengers? Are they trying to put conductors in harm's way, having to extract these penalties from exasperated passengers?

Isn’t there a law against this kind of thing? Cruelty to users. Where are the design police? And if this is a racket, where are the Feds? As anyone with a smartphone knows, this is simply a matter of software and the user interface can be changed. So, why not?

Alan Brody, is a digital maven and creator of  Visual Daily. He runs the iBreakfast and is the author of Are You Fundable?

Tuesday, August 20, 2013

Great New Finds at the August STARTUPALOOZA

We are constantly amazed by the quality of pitches we get at our monthly open event.

What makes Startupalooza so interesting is that we find companies that don't show up on the usual radar. Companies like Ligandal Technology which looks like Apple-meets-Genentech in their garage days. They promise to reinvent medicine via genomic nanotechnology.

Congratulations to the winner, Aajo the mobile wallpaper ad medium.
They will be participating at the Private Equity Forum on September 27th at the Yale Club
- a $1500 value.

The runners up were:
Ligandal Technologies - the genomic nanotech editing company.
Stellify Entertainment - A unique monetization and distribution platform for live events.

DefenCall - StaySafe smartphone panic button app platform.

This was a very closely contested many companies that came in close to the finalists,

Back In September
We will be back in September with a Startupalooza and the curated pitching event, the iEvening.

You will also have an opportunity to buy our eBook - Are You Fundable? to better understand how
investors rate Startups and what they can do to improve your funding prospects.

We also offer an incredible free workshop (for iEvening attendees) that helps you work through these issues.

Fundability Quotient Average Judges' Scores

Sample Judge Score
20.75 AAJO 8 6 6 20
19.25 BuilderBuzz 8 8 8 24
11.5 Catalysis Films, Inc. 6 3 4 13
18.125 Claritics 8 6 6 20
15.25 Content Galaxy Inc. 5 6 3 14
10.875 CreatorUp 6 6 6 18
20.29 DefenCall 8 8 8 24
15.6 Employtoy 6 6 6 18
16.33 Flatparty 6 4 5 15
14.4 Golsie 7 6 6 19
20 iGiveMore Inc. 8 7 7 22
18.67 Instrumagic 6 6 6 18
22.8 Ligandal Technologies 10 9 7 26
19.4 Look Media 4 5 5 16
13.4 Middle Market Executive 5 4 5 14
18.5 Mountain Pass Systems 8 8 8 24
13.375 5 5 6 16
15.75 6 6 5 17
23.5 Stellify Ent. 0
15 Tascit 5 4 5 14
19.33 Teem'd 8 6 6 20