Archive for October 2, 2011

(Founder Stories) Meetup’s Heiferman: Working At McDonald’s & The Future Of Social Networks

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Meetup co-founder and CEO, Scott Heiferman is Chris Dixon’s guest in this episode of Founder Stories. A serial entrenepenur, Heiferman tells Dixon he started “the first online ad agency in ’94″ after corporate America left him unsatisfied. Called i-traffic, “the idea was to be an online media buying agency even though there wasn’t any media to buy at the time.” Five years later Heiferman sold i-traffic to Agency.com.

Following the exit, Heiferman was unsettled and says he “went a little bit crazy not knowing what I wanted to do with my life.” Heiferman took a job at McDonald’s—a move he credits to the company he was keeping. “I was hanging around with too many lawyers and accountants and at the time I just wanted to see what it was like to be a part of an actual real business.”

After flipping burgers Heiferman jumped back into the startup scene with RocketBoard, a project he describes as “a colossal failure and actually we blew through about $20 million dollars of AOL money.” The silver lining? Heiferman received advice that sticks with him to this day—create products to help the greater good of society.

Resuming their conversation below, Heiferman discusses Fotolog, a company he launched just prior to founding Meetup. Heiferman started the photo sharing site in 2002 and says “it became the number one social network” in several countries. It eventually sold for millions of dollars. However, Heiferman notes Fotolog’s top status eroded when Flickr hit the web and it made Heiferman realize that no company is totally secure against competition.

Lesson learned, Heiferman tells Dixon “I don’t think you can take for granted that any social network is going to be here 10 years from now.”

Make sure to listen to both clips for additional insights, including what Dixon observed while delivering pizza.

Past episodes of Founder Stories are here.


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Scott Heiferman is a Co-Founder and CEO of Meetup, the world’s largest network of local community groups. Over 50,000 Meetups (self-organized community events) happen each week. Millions of people in over more than 100 countries “use the internet to get off the internet” using Meetup, which is built on the idea that every town needs support groups, playgroups, bookclubs, business circles, running groups, community action groups, etc. Previously, Heiferman co-founded Fotolog, a photo sharing network where over 30…

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Chris Dixon currently works as the CEO and Co-founder of Hunch. He is also a contributing writer for TechCrunch.

He previously was the CEO and Co-founder of SiteAdvisor, which was acquired by McAfee. Chris is a personal investor in early-stage technology companies, including Skype, TrialPay, DocVerse, Invite Media, Gerson Lehrman Group, ScanScout, OMGPOP, BillShrink, Oddcast, Panjiva, Knewton, and a handful of other startups that are still in stealth mode. In addition to his personal investments, Chris is also a…

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Central America and startups: what you need to know

It all started with a tweet. Commenting one of our recent posts, ‘Latin American Startups: Eight “Gringas” to Watch Out For,’ a web developer from Nicaragua called Jorge Cerda pointed out that our scope in that post was actually limited to Argentina, Brazil and Chile. Although we have also talked quite a few times about Mexico and its startups, Jorge had a point: there have been very few mentions of his home country and its neighbors on The Next Web.

So what have we been missing? We decided to ask key people from the local tech communities to share their knowledge with us. Luckily, they played along and here is what you need to know about the Central American startup scene.

Central America’s structural and cultural barriers

To put it bluntly, one of the main reasons we don’t talk much about web startups in Central America is that there isn’t that much happening. To start with, the region is home only to 41m inhabitants, distributed in seven countries (from North to South: Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama.) Although these countries are quite diverse, with Costa Rica and Panama faring better, most have in common inequality, poverty of many and widespread illiteracy. The percentage of university students is also fairly low, limiting the talent pool for entrepreneurship.

Even among university graduates, wannabe web entrepreneurs are rare, mostly for cultural reasons. According to the Guatemalan web insider Stephanie Falla, most universities still prepare students to “work for someone else.” Of the people I’ve interviewed, they also all agree that Central American families strongly encourage their children to opt for corporate careers and aren’t supportive of ‘riskier choices’ such as startups.

In countries where children rarely move out of their parents’ homes before their late twenties, this family pressure has a strong influence, and most graduates end up “doing the right thing” and joining a large corporation. According to the Honduran entrepreneur Alejandro Corpeno, the main problem isn’t a lack of talent, but the fact that it gets “sucked in” by these big companies which can afford to pay more.

Sprouts in the startup desert

Both Stephanie and Alejandro prove there are exceptions to the rule – and it’s often down to personal circumstances. Stephanie describes herself as quite independent; she moved out of her family home at the age of 17, an experience which taught her “she could have her own ideas and follow them.” It was also around that time that she met Christian Van Der Henst, a well-traveled Guatemalan who opened her eyes to a broader perspective.

mdw hr 300x80 Central America and startups: what you need to know

Although Christian is now based in Buenos Aires, the pair still work together at the pioneer local startup Maestros del Web, created by Christian in 1997. Maestros’ business model is freemium. On the free side, it’s a very popular website and online community, where Spanish speakers can find relevant information on the web and technology. Christian also co-hosts a podcast called Mejorando La Web (see our previous story.) As for paid gigs, the team travels around Latin America giving conferences and classes and plans to increasingly focus on training. The ultimate aim is to impact tech education across the region, hopefully with the help of local partners in each country.

logo small Central America and startups: what you need to knowAs for Alejandro Corpeno, he’s one of Central America’s most prominent web entrepreneurs. He answered our questions from New York, where he’s working on developing his latest venture, Pictour.us (see our previous post.) The photo tour startup was born during DreamIt Ventures‘ summer acceleration program. Alejandro had initially joined with an education project called class.io, but his team finally decided that Pictour.us was more promising, at least for now.

None of these two companies are Alejandro’s first startups. Contrary to many Central American parents, he recalls his dad was supportive of trying out new projects. This support gave him confidence to start creating websites for others in the nineties, when there weren’t many local competitors. He then went on to create several other ventures, including tubabel.com, a website about Spanish and its variants, and Twitter clone Blipea (which failed to gain traction.) Pictour, the latest startup, will operate from the U.S., but Alejandro hopes it will have content from all over the world, including partnerships with Central American tourism boards.

Alejandro and Stephanie aren’t unique: some successful entrepreneurs have emerged from the region in the last decade, such as the serial entrepreneur Matias de Tezanos, who sold Hoteles.com to Expedia at the age of 22 and went on to create several other companies. Both Alejandro and Stephanie have also heard of a couple recent startups. However, they lament the fact that most local web ventures are services companies with limited ambitions, which aren’t necessarily their founders’ main activity. This includes blogs, social media agencies and consulting firms making a business out of helping brick-and-mortar clients to go online. Although it isn’t bad per se, they certainly aren’t creating the next Facebook – nor are they tackling the region’s main problems.

Contrasted realities

Centroamerica 300x229 Central America and startups: what you need to knowTalking to these Central Americans, what strikes me is the the lack of integration across the region. Geography certainly plays a role and some countries are culturally closer than others. Still, information seems to be far from flowing from one country to another. Stephanie, for instance, confesses she knows very little about what’s going on in Panama tech-wise.

While Alejandro acknowledges there is little going on in El Salvador, where he had recently moved, he hopes there will be more coming out from the country in a few years, based on recent developments, including a BarCamp. As for Honduras, he laughingly declares that “all the people he knew who did stuff now work with him” – that is, all five of them…

Nicaragua’s startup scene is also very small, according to Juan Ortega Ulloa, a Nicaraguan web designer and e-commerce consultant now based in Chile. In fact, there are almost no startups that are 100% in the country, as Juan pointed out in an insightful post on his blog. Although there are successful web ventures in the country, they all include a brick-and-mortar element at some level.

According to Stephanie, among the countries she’s familiar with, Costa Rica is the most advanced. Its local developers and designers usually work for foreign clients, although some are also developing their own products, she says. The country recently hosted its first Startup Weekend and two editions of a conference called Transcyberiano.

As for Panama, according to the local entrepreneur Harold Maduro, the country benefits from a series of initiatives to foster entrepreneurship, such as the AEP accelerator, located within Panama’s City of Knowledge. The AEP is connected to an angel network and organizes events and competitions for entrepreneurs. Entrepreneurs can also get support from different public and private initiatives focused on medium and small businesses.

However, these initiatives aren’t particularly targeted at web startups, which still seem somewhat rare. Still, there are a few of them, such as iteridea, which creates mobile apps “for the global market.” According to the startups co-founder Jorge Mendez, although things are moving slower than he’d wish, the ecosystem is going in the right direction thanks to positive nitiatives such as the CascoStation, the co-working space that Harold founded (see our previous story.)

The need for networking

logo reasonably small Central America and startups: what you need to knowIndeed, Juan Ortega pointed out that the lack of networking was one of the key factors for Nicaragua’s lack of web startups. Alejandro Corpeno has already started to tackle this issue and created an event called WebConf Latino. After a successful test edition which took place in Honduras in 2008, he decided to repeat it and start charging for tickets. The event still attracted 250 participants during his first three editions in Honduras, with people coming from neighboring countries. It was a bit too far for Panamanians to attend, which inspired Alejandro to launch a franchised event in that country last year, in partnership with a local company. It means that in 2012, WebConf Latino will take place in Honduras, in Panama and maybe somewhere else – there is interest for the event in other Latin American countries, Alejandro said.

One of the purposes of the event is to develop the startup mindset in the region and “let the young generation know about their potential.” Indeed, Alejandro is convinced that they’re talented and hopes to lure them to create startups before they go for corporate careers. For instance, he wishes to highlight the fact that most of them live with their parents means that trying to launch a company is a low-risk operation for them – they shouldn’t be so afraid of failure. He also thinks universities could help develop the local ecosystem by having their own incubators and organizing business model competitions like other foreign institutions.

Think global

It’s not a coincidence that Alejandro has also invited foreign speakers to his events: in his view, the local market isn’t big enough for consumer Internet projects. Yet, Jorge Mendez laments that many projects created in the region aren’t scalable in other countries. Instead, entrepreneurs need to think beyond their small country and have a broader mindset. They don’t even need to go global: the Spanish-speaking market, for instance, could represent a great opportunity. Actually, even thinking of Central America would already be a step forward, in a region that still lacks integration.

What do you think is needed for web startups to blossom in Central America?

The New York Times’ Most Prolific Tech Writer Just Turned Down A $1.5M Offer From CNET (NYT)

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Image: Illustration: Ellis Hamburger

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Nick Bilton, the New York Times’ lead technology writer, just turned down a $1.5M offer to write for CNET, Michael Arrington at Uncrunched reports.

CNET, a subsidiary of CBS, hoped that Bilton would do regular television appearances and a ton of blogging.

CNET offered him $500K a year for the job.

Bilton, who Arrington estimates earns about $150K per year at the New York Times, was one of his most desired writers while he commanded the TechCrunch helm.

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Here’s More Proof Apple’s Building A Cheap ‘Entry Level’ iPhone 4 (AAPL)

Gizmodo just posted some images of a brand new iPhone, codenamed N90A, from Foxconn’s brand new factory in Brazil.

The pictures of the new iPhone don’t look much different than a images of an iPhone 4, except this phone’s model number is a bit different.

The iPhone in the images from Brazil is called the N90A, while the iPhone 4 we’ve been using for a year is called the N90.

Rumor has it that Apple’s new iPhone, whether it be a true iPhone 5 or an iPhone 4S, is called the N94.

Just a few days before Apple’s big iPhone announcement in Palo Alto, this would seem to be confirmation that Apple’s producing another round of iPhone 4′s, perhaps pricing them at $99.99 or less and including only 8GB of internal storage.

See below for the full-sized image, via Gizmodo.

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Facebook, Twitter, iTunes and Google: The rise of digital monopolies

Whilst some countries have a penchant for banning social networks outright, back in June, France hit the headlines for introducing a different type of social media ban.

Was a great governmental firewall erected to prevent French Internet users accessing social networking sites? No. French broadcasting regulators ruled that TV and radio show hosts must not utter the words ‘Facebook’ or ‘Twitter’ unless it’s in direct relation to a specific news story involving those companies. Put simply, presenters were no longer allowed to direct the public to ‘Follow’ a story on Twitter, or invite its audience to ‘Like’ a network’s Facebook page.

To many people this was merely evidence that the French love to implement pedantic rules and regulations. But in the cold light of day, was it really that ridiculous a regulation? Think about it. If News at 10 presenters attempted to guide the public towards a particular carbonated cola brand, most people would agree that this would be unacceptable.

Christine Kelly, a spokesperson for The Conseil supérieur de l’audiovisuel (CSA) said at the time that, besides the clandestine advertising aspect of mentioning ‘Facebook’ and ‘Twitter’ on the nation’s airwaves, referring to them by name demonstrated a preference for those two social networks, to the exclusion of others. Kelly said:

“Why give preference to Facebook, which is worth billions of dollars, when there are many other social networks that are struggling for recognition. This would be a distortion of competition. If we allow Facebook and Twitter to be cited on air, it’s opening a Pandora’s Box — other social networks will complain to us saying, ‘why not us?”

‘Why not us?’ indeed. It’s really not practical to give a shout out to all social networks, so it makes sense to stick to Facebook and Twitter which between them have somewhere in the region of a billion registered users, give or take. But surely the basic underlying point isn’t that preposterous? Why should they give an unfair advantage to two companies that are already dominating in their respective social spaces?

Of course, none of this is really the fault of Facebook or Twitter. French regulators weren’t actually banning the use of ‘Facebook’ or ‘Twitter’ specifically – they equally won’t allow ‘LinkedIn’, ‘MySpace’, ‘Bebo’ or any other social network from being name-checked.

Whilst I doubt that the French ban will have any real effect on the social networks’ dominance, the sentiments behind the decision are actually solid, principled and well-meaning.

The world is a much healthier place with variety. Surely nobody likes seeing multimillion dollar monopolies permeating the Web? But that is exactly what’s happening.

Not available in all good record stores: The rise of iTunes

RecordShop Facebook, Twitter, iTunes and Google: The rise of digital monopoliesOnce upon a time, TV, radio and magazine commercials for new music would be appended with something like Now available in all good record stores. The instructions were quite clear – find yourself any record store, and exchange some cash for said album. Simple. If the store didn’t stock the record, I guess that would mean that the record store wasn’t good.

Today, it’s even easier to procure music, and with digital downloads you don’t even need to leave the house. But now, we’re seeing more and more of Now available on iTunes attached to adverts. From what I gather, this is completely free advertising afforded to Apple’s online music store, simply because it has been immensely successful at what it does in both the hardware and software market. Success breeds success.

With bricks-and-mortar record stores ambling quietly into oblivion, there doesn’t seem to have been a switch to Now available in all good online music stores.

Those that like good old-fashioned physical format music are covered too, with the iTunes analogy working just as well with Amazon. Now available in all good book stores was once also a common message within the advertising industry, but all too often that has been replaced by Now available on Amazon.com.

Social networks: Natural monopolies

FacebookLogo 520x304 Facebook, Twitter, iTunes and Google: The rise of digital monopoliesSocial networks only work when people use the same ones. In other words, they naturally lend themselves to being monopolized, which is one of the main reasons Facebook will continue on its upwards trajectory. It would be rather difficult, not to mention impractical, for people to communicate with their friends across different social networks, and although you can cite the likes of Bebo and Myspace as examples of social networking sites falling from grace, Facebook is past the point of no return…it’s too big to stop now.

Of course, there are pockets of resistance around the world, such as in Russia, Brazil and parts of Asia where other sites rule the roost. And different social networks dominate if they serve a different purpose, as is the case with LinkedIn for business, YouTube for video and Twitter for microblogging. But we’re definitely seeing the monopoly effect take hold within the social sphere.

Similar to Now available on iTunes, we’re now seeing Follow us on Twitter, Like us on Facebook, and Subscribe to our YouTube channel take hold of commerce. Free and willing promotion of big digital companies that ultimately feeds into, and perpetuates, the monopoly machine.

Feeding into this social media monopoly is other pretty successful services in their own right, such as Spotify, that is now making it mandatory to have a Facebook account to use its service for new users. With over 800m users, Facebook holds a lot of clout, and it can quite easily stipulate what other services must do to be able tap into its global band of merry users.

I very much doubt that regulations can save social media from monopolies – despite France’s best efforts – as users will typically go where all the action is taking place.

Google: ‘Now a verb’

MobileInternet4 520x285 Facebook, Twitter, iTunes and Google: The rise of digital monopoliesGoogle owns search. But it has also been branching out into non-search products for a while too, buying the likes of YouTube, launching Gmail and embedding itself in businesses with a pretty comprehensive range of Apps.

Any company that manages to nail the consumer and business markets is sure to be onto a winner, and Google is becoming increasingly omnipresent, whether it’s through internal developments or acquisitions.

Moreover, it has transcended its noun roots and is also firmly embedded in the verb sphere, with “googling” now in common parlance. Don’t understand something? Google it.

When a digital company’s name becomes a verb, you know you’ve got one mighty enterprise on your hands. But Google has been under the spotlight for its monopolistic ways on a number of occasions over the years, with the subject hitting headlines again in recent weeks.

The Internet giant stands accused of crowding out competition by favoring its own products over competitors in search results, and Google’s Executive Chairman Eric Schmidt appeared in front of a US Senate committee recently to answer questions. At the hearing he said that he had “a long conversation years ago about how not to be evil” if Google became big. “We think we have done the things that would be appropriate”, continued Schmidt.

The thing is, since Google’s IPO back in 2004, it simply has to look at ways to maximize the return for its shareholders. Whilst great products that people want to use will still be a priority, its goal is to have as many zeroes on its bottom line as possible. It even cut its taxes by over $3bn in the three years leading to 2010 by some pretty cunning tax loopholes. Dutch Sandwich anyone?

At the Senate hearing, Schmidt also said that he was “not aware of any unnecessary or strange boosts or biases” that favored Google. We can maybe expect that quote to be referred back to again one day, with particular focus placed on the “not aware” part.

With a 90% share of the global search engine market, Google has trampled over its predecessor Yahoo!, is keeping Bing at bay with a palm-to-forehead arm’s-length maneuver, and is now focused firmly on conquering the digital world. Alongside Facebook, of course.

Oligopolies and the information age

Book2 Facebook, Twitter, iTunes and Google: The rise of digital monopolies

The Internet opened up commerce, enabling bedroom businesses with little more than a networked computer and a good idea to enter the marketplace. Nobody can deny the positive effects the World Wide Web has had. It actively enables a free market, right? So why is the Web morphing into a digital Monopoly board?

Facebook and Google are invading every orifice of the World Wide Web. Elsewhere, Apple is doing pretty well for itself in both the hardware and software markets, whilst Amazon is certainly up there in retail, especially on the back of its Kindle announcements this week. We haven’t even looked at the mighty Microsoft, or other digital behemoths such as eBay, both of which have massive clout and have monopolized their respective spaces for some years.

The Internet isn’t a monopoly though. It’s an oligopoly consisting of multiple monopolies from different digital industries, and the reason this is happening really isn’t all that complicated.

Success breeds success, something which underpins most monopolies, whether we’re talking about dominant languages, biological species or, indeed, Internet technology companies. Hegemony stems from success, and it’s certainly not unique to the Internet age.

There’s a pattern emerging over time that suggests information industries are particularly prone to monopolization – or, perhaps more accurately, ‘oligopolization’. Tim Wu’s The Master Switch: The Rise and Fall of Information Empires explores that very topic, and is well worth a read.

The law professor argues that ATT was the sole telecommunication company for something like 70 years in the US, up until its court-ordered dismantling in the mid-80s. Elsewhere, Hollywood and the entertainment industry on the whole has been dominated by a handful of big companies, with mergers and acquisitions over the years making this more so.

In terms of the Internet, everything suddenly becomes much more convenient for consumers. If there’s a handful of centralized places to buy books, listen to music, watch movies, chat with friends or search the Web, why is there a need for any more? Consumers don’t want to spread their money around for the sake of it, they want convenience.

Amazon’s interest in Palm: Why would it consider a bid?

Amazon, the world’s biggest online retailer and new player in the tablet market, is apparently in “serious negotiations to snap up Palm from HP” with the company interested in taking HP’s beleaguered mobile division off of its hands as soon as possible.

Palm, purchased by HP in April 2010 for $1.2 billion, was expected to galvanise its operations once it joined the enormously successful computing giant, combining resources to further develop Palm’s critically-acclaimed webOS mobile platform and create new, powerful smartphones and tablets that were capable of competing with iOS and Android powered devices.

The reality was much harder for HP; its Pre smartphones struggled to sell, as did its TouchPad tablet, resulting in an HP announcement which declared the company was to cease development of its webOS devices, spin-off its PC sales business and look for licensees and a buyer for its webOS division.

It also led to HP’s famous firesale, which saw thousands of TouchPad tablets go on sale for a quarter of their original price, sparking a mad rush as consumers tried to get their hands on one.

Amazon, on the other hand, has been slowly building its portfolio of services over the past year; building out its cloud storage offerings, striking music and video streaming deals with major labels, also launching its own Android Appstore. This week it finally put an end to rumours that it was to release an Android-powered tablet, launching its 7-inch Kindle Fire tablet, tempting consumers not only with promises of a cheap, yet powerful, tablet but a device that would bring all their music, film, files and other media to them without them having to do a thing.

The launch of the Kindle Fire (and its new touch-capable Kindle e-readers) sees Amazon on a roll, its CEO Jeff Bezos is already being compared to Apple’s Steve Jobs, and the buzz around its products can surely only be topped by Apple, with its upcoming iPhone announcement on Tuesday.

Buying Palm would not only make no sense for Amazon – it could actually hurt it in the long run. This is why.

1. Amazon doesn’t need webOS, it has Android – and it’s free*

Amazon’s decision to power the Kindle Fire with Google’s Android platform was not taken lightly, it had made the decision to utilise the Linux-based OS months, if not years, before it started working on the Kindle Fire.

The reason why many believe Amazon will strike rich with its tablet and Kindle devices is that it built tools and services that can exist separate from its own products. Its cloud players, app store and other services can still be accessed from rival tablet devices, but will come together to enrich users of its own tablet (and pump additional revenues into the company to overturn the $10 it loses on each Kindle Fire sold).

amazonfire1 Amazons interest in Palm: Why would it consider a bid?

Android offers easy customisation (as shown in Amazon’s interpretation of the platform), it already has huge market penetration – so that consumers will be familiar with how it operates – and it is free. Microsoft might be sniffing around Android device makers and breathing down their necks to sign license agreements for its Linux patents, but Google offers its Android platform for no charge, publishing the source for device makers and developers to modify the code as they see fit.

Amazon’s decision to move away from a platform that will, for the near future at least, remain available to the company no matter how much Google updates and evolves its feature-set would see the company take a huge risk with a platform that is still largely unknown. Consumers are familiar with Android (even if it is a heavily modified version) and Amazon already develops its own applications and services for the system, doing that all over again for webOS would not only waste resources, it would undermine the devices it has already launched and sold to customers.

Fragmentation is already a big issue in the smartphone and tablet market, Amazon will not want to add to it with a number of devices that run different platforms.

2. Palm is a broken company and webOS is a dying platform

Business Insider argues that Amazon’s purchase of Palm would be a good thing, its first two reasons being that HP doesn’t want to make tablets and mobile phones and that Palm is “going to be cheap”:

HP isn’t going to do anything interesting with webOS. HP is pivoting to enterprise software, doesn’t want to make tablets and mobile phones, and is generally bogged down in its internal vicissitudes.

Palm is going to be cheap. Right now, all Palm has is good intellectual property, and maybe a few talented people, including former Palm CEO Jon Rubinstein, a highly regarded industry executive, who now has a dead-end “product innovation” job at HP and, VentureBeat notes, recently joined Amazon’s board. Amazon can almost certainly buy Palm for a fraction of its original price.

Others, including myself, will argue that this is exactly why Amazon shouldn’t buy Palm – the company has not done all it can to save the platform and the company will be cheap for a reason – because HP doesn’t want it any more.

If one of the world’s biggest technology and computing companies can’t work with Palm’s talented design team, the idea that Amazon would fare any better with the same team requires some reaching.

In August we reported that before the HP’s TouchPad tablet and Pre smartphones were even released, everyone within the webOS team wanted its new device “gone”. According to our sources, the hardware reportedly stopped the team from innovating beyond certain points because it was slow and imposed constraints, which was highlighted when webOS was loaded on to Apple’s iPad device and found to run the platform significantly faster than the device for which it was originally developed.

HP TouchPad 610x250 520x213 Amazons interest in Palm: Why would it consider a bid?

With a focus on web technologies, webOS could be deployed in the iPad’s Mobile Safari browser as a Web app; this produced similar results, with it running many times faster in the browser than it did on the TouchPad. Ultimately, when HP announced its acquisition of Palm, the computing giant had already built the TouchPad hardware that sits on the shelves today. Put simply, the TouchPad was a two-year old piece of hardware that the webOS team equipped with their tablet-friendly platform.

Palm might not have had much say in HP’s decision to develop products that were ultimately out of date but its engineers were still part of a company that limited innovation. Consumer confidence in Palm and its mobile platform have been severely impacted as a result of HP’s decisions, despite the fact that webOS has proven itself to be a very capable platform.

Demand for webOS smartphones manufactured by Palm was limited, HP haemorrhaged money with severe operating losses when it launched updated versions of Palm’s products. Does Amazon see something that HP couldn’t and believe it can reverse the fortunes of the stricken platform? Until the deal is confirmed, the answer remains no.

3. Amazon’s Lab126

If Amazon acquired Palm, it would inherit the company’s webOS engineers, designers and innovators. However, Amazon has its own mobile division (although it isn’t expressly referred to as one), a team that has helped to design, develop and create the retailer’s entire Kindle line.

In August 2010, Lab126 began advertising for a Supply Chain Project Program Manager, Hardware Engineer and RF Systems Engineer. Whilst the openings didn’t specify tablet devices or Google’s Android operating system, sources told the New York Times that Amazon was looking to into building other gadgets (besides the Kindle) that it could sell to consumers:

One of those people said building more hardware products would be a means to an end. This person said Amazon wants to make more devices for consumers that would enable simple purchasing of Amazon content including its digital books, music and movie rentals and purchases.

A year later, the Kindle Fire was unveiled – all but confirming that Amazon’s 2010 hirings were for engineers that would be instrumental in the device’s creation.

Fast forward to today and Lab126 has around 190 job openings on its Careers website; not all of them are for engineers or developers but the majority of them are. Amazon is actively looking to recruit specialists in the mobile and technology industry, building up its own presence.

Whilst the acquisition of Palm would certainly fill some of these positions, the company would seemingly acquire a number of employees that it either had an abundance of or would not need within their organisation. A smart approach would be to actively recruit the individuals that Amazon needs from Palm direct, tailoring its workforce to its own specification – not via the costly and heavily logistical route of acquiring, hiring and possibly firing new employees incorporated via a merger.

Screen Shot 2011 10 02 at 10.51.51 520x205 Amazons interest in Palm: Why would it consider a bid?

Just days before the Kindle Fire launched, reports emerged that Amazon’s first tablet was not as carefully thought out as it should be, with Amazon engineers outsourcing the design of the Kindle Fire to Taiwan-based Quanta Computer, the ODM (Original Design Manufacturer) that helped created RIM’s BlackBerry PlayBook. As Ryan Block wrote at gdgt:

Amazon’s team determined they could build a tablet without the help and experience of Lab 126, so they turned to Quanta, which helped them “shortcut” the development process by using the PlayBook as their hardware template. Of course, it’s never quite that simple, and as I’m told Amazon ran into trouble, and eventually sacrifices were made (like using a slower processor).

Although Amazon did refresh the ID of their PlayBook derivative, I’m told that this first tablet of theirs is “supposed to be pretty poor” and is a “stopgap” in order to get a tablet out the door for the 2011 holiday season — which doesn’t exactly leave the best taste in my mouth. But it’s also not the most uncommon story, either: when you’re breaking into a new market, sometimes you have to do whatever it takes to get in the game. You may remember how crappy the original Kindle was compared to later models!

The key sentence in the above quote is that Amazon may have had to “whatever it takes to get in the game”. The Kindle Fire has been well received thus far, although the mobile industry is yet to get a proper hands-on, but with its content-focused approach, the retailer can afford to start off basic and offer its device cheap and then innovate - as it did with its Kindle devices.

This also raises another interesting point; Amazon will have had to independently forge its own connections to suppliers, manufacturers and licensing partners, something that would have cost countless millions in research and contractual fees. That said, with those connections already made, Amazon now has its foot in the door and if its device sells well (analysts are already forecasting sales of 4 million units by the end of the year), the company is in great position to negotiate better deals and lower its production costs for its future devices.

The news of Amazon’s interest in Palm comes so soon after the release of its new tablet that the company must not be interested in Palm’s hardware and software – it could be interested in its intellectual property.

Conclusion

Given the amount of money, time and resources Amazon has invested in the first version of its tablet, the retailer’s interest in Palm could solely be a preemptive move to better protect itself from future litigation – most notably Apple and Microsoft.

The New York Times spoke with Jordan Rohan, a Stifel Nicolaus analyst on Friday, who told them:

“I don’t think anyone believes that Apple and Amazon will not have significant competitive skirmishes in the future. The value of I.P. related to mobile has gone up—even if there was no palm devices in the future, it would still be valuable.”

It is not known how valuable Palm’s patent portfolio is, although Todd Bradley, an executive vice president at H.P, did say last year that it “possesses significant I.P. assets”.

If Amazon was to buy Palm purely for its patents, it is possible that the mobile company would drive up its price (much as Motorola Mobility did when Google negotiated a takeover) to ensure it wasn’t undersold and to appease employees who may not be incorporated into Amazon’s mobile division.

Amazon has taken its first steps into the mobile space, standing apart from Apple in its approach and providing all other Android tablet makers with a serious problem. Pricing the Kindle Fire at $199.99 won’t cannibalise iPad sales, it will undermine products offered by Samsung, HTC, RIM, Motorola and others, that simply can’t compete on price because they don’t have the value-added services (although Samsung and HTC have launched their own content platforms) that can recoup costs should they slash their pricing.

To move for Palm and adapt its services for webOS would almost see Amazon doing itself a disservice, but not trusting in its own belief it can create its own world-beating devices and services using a platform that is widely used, easily customisable and ultimately free.

Microsoft may now move to seek licensing for Amazon’s use of its Linux patents with the Kindle Fire, forcing Amazon’s hand, but the retailer will be well aware of the options available to it.

Garage48 spurs 11 innovative startups in Uganda

Garage48, an Estonian 48 hour hackathon aimed at turning ideas into working prototypes or services within one weekend, recently came to Kampala, Uganda. The Ugandan hackathon is the organization’s first in East Africa after its previous event earlier this year in West Africa. The event was supported by Nokia, Google and MTN Uganda.

At the event, 11 interesting startups were formed. One of the more interesting ones was Somesha, a crowd funding platform that helps raise money to help put disadvantaged children in schools.

Other startups include Ninjakids, an educational learning game as well, as an Android mobile game, Zword which enables users learn spelling while killing zombies. “I am thrilled by the level of skill showed by Kampala hackers over the weekend” said Garage48 foundation’s founder Ragnar Sass. “This was Garage48′s most successful event in Africa so far and it put Uganda in the startup entrepreneurs world map.”

In addition to spurring the local startup community, Garage48 also helps connect talented African developers with successful investors. Through its partnership with Seedcamp, a micro-seed investment fund and mentoring programme in Europe, one of the Garage 48 Uganda startups would have the opportunity to present their ideas to Seedcamp panelists.

The hackathon was a great way to encourage developers in Kampala to bring their ideas to life with minimal resources. Organizations like Garage 48 would go a long way in encouraging a culture of execution among African Web entrepreneurs and developers.

Find the full list of startups formed at the event below:

garage481 Garage48 spurs 11 innovative startups in Uganda

Somesha  - Garage48 Kampala 11 Winner

The Diet Assistant

Laimoon takes a fresh approach to job hunting in the Middle East

At the moment, the majority of the listed jobs are based in the UAE, but there are plans to expand beyond that into the rest of the Middle East.

How does Laimoon work?

Laimoon takes a very different approach to how you search for a job that suits your skills and experience, all wrapped up in an extremely appealing, clean and minimal design.

Rather than fill in your entire CV, and then page through lists of openings, Laimoon presents you with a series of questions about your personal experience, your education, language skills, managerial experience and more. Most of the questions are multiple choice, with the exception of filling in industry keywords that apply to your personal experience.

education Laimoon takes a fresh approach to job hunting in the Middle EastOnce you’ve gone through 7 easy steps to fill out your profile, you have to fill in a few additional personal details about your nationality and country of residence, and where you would like to work.

map Laimoon takes a fresh approach to job hunting in the Middle EastLaimoon will then let you know how many jobs are available in the database that relate to your personal skills.

discovery Laimoon takes a fresh approach to job hunting in the Middle EastRather than present you with a list of those jobs, Laimoon then presents you with a series of job description items, in pairs, and you can select the one applies to you, or skip if neither apply.

question Laimoon takes a fresh approach to job hunting in the Middle East

As you progress through the choices, the list will be narrowed down, and you will be presented with the jobs that fit your answers. You can then save those jobs to your account.

job Laimoon takes a fresh approach to job hunting in the Middle EastAs the jobs are revealed, you can continue to save them to your account, or dismiss them until you’ve completed the questions and then you can view the entire job listing.

jobs Laimoon takes a fresh approach to job hunting in the Middle East

What sets Laimoon apart?

We spoke with Ihsan Jawad, founder and Partner at Honeybee Tech Ventures who gave us a little bit of insight into where the idea came from, and where the site is headed:

NM: What was the motivation behind launching Laimoon? 

Ihsan Jawad: We wanted to do something that matters to a lot of people in the Middle East.  Finding the right job out there is amongst the few things on top of most people’s agenda.  We were shocked to learn the Middle East had the highest unemployment rate in the world when it comes to people with tertiary education; how can we just sit back and accept that! Imagine, your most productive/creative group of people are not working! The Middle East is simply not working.

This is obviously a huge problem that is effecting a lot of people.  This in itself inspired us to come up with an unconventional solution and take a different approach than what was already out there – and there is a lot out there; around 50,000 worth of job boards, social recruiting sites, job search engines, etc.  A crowded field but nevertheless all doing less than expected in matching people with jobs.  We wanted to disrupt and improve in this space.

NM: Why the name Laimoon?

IJ: “Laimoon” has nothing to do with this industry. Its a disruptive name!  It’s a cool, young and energizing name. Also, because the solution originated from here, it only make sense to have an Arabic name.

NM: What sets Laimoon apart from other recruitment sites in the region? 

IJ: Laimoon is a fresh way to discover jobs. It’s a fun way for the user to explore their real competencies and by doing so they reveal real jobs out there that actually require such competencies.

There is no search functionality. Each user sets their preferences, and is subjected to a series of quickly revolving cards that host different isolated job scenarios. How the user interacts with these cards helps determine the job matches – the technology puts the user behind the wheel. The algorithm helps empower the user to discover new job opportunities in a fun interactive way.

So what IS Laimoon? Well, it’s not exactly a job board, or search engine, or social recruitment platform. It’s some new creature that is  connecting job seekers to opportunities they’re fit for – and the recruiters who are capitalizing on this by posting their job directly on Laimoon are extracting the benefits of this!

Is Laimoon going to catch on?

As Jawad points out, Laimoon isn’t for everyone. The approach the site takes is to narrow down the options, leaving job seekers only with the jobs that are truly relevant to their education and experience, and in fact, by doing so, the site addresses a very common problem among job applicants in the region, according to Jawad:

We believe this is why the space has such big problems – too many irrelevant applicants are forcing the relevant ones to be diluted with the rest and ultimately, this is causing a gap in recruitment. Our satisfied users tend to be ones that are qualified and who like the increased voltage required to discover these opportunities, because the irrelevant ones tend to fall off in the process.

We wanted to put our money where our mouth was, so when it was time to hire our first business developer, we turned to our very own Laimoon. Quickly we had a shortlist of qualified applicants, and made a hire that was an incredibly relevant and fit for the job.

Laimoon can serve as an awareness tool, encouraging users to change their job seeking tactics, and if it catches on, could have a revolutionary effect on the job seeking market in the Middle East, and beyond.

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