Angel-Backed Companies More Likely to Succeed, Says Harvard Study

A new study published by professors at the Harvard Business School shows that angel-backed companies are more likely to succeed and show more growth than those funded by venture firms alone. Researched and written by William Kerr and Josh Lerner, the report found that companies with angel funding see between 30% and 50% higher growth figures in terms of website traffic, are more likely to survive for four years, and are also in a better position to receive further rounds of funding. Sponsor Angel investing itself has seen large growth over the last several months with the creation of various organizations, events, firms and legislation to spur it on. We’ve discussed the Open Angel Forum series of events, the creation of “Super Angel” firms , the curated Venture Hacks AngelList , as well as current legislation both helping and hurting angel investments. Angel investing has become more common, and as this report shows, this is largely due to the value and success it tends to breed. But why are angel investments the secret sauce for some companies? As the report points out, its the intangibles that angels bring to the table that could be playing a large role in company success. “Access to capital per se may not be the most important value-added that angel groups bring. Some of the ‘softer’ features, such as angels’ mentoring or business contacts, may help new ventures the most,” the report says. One of the other reasons that companies could tend to be more successful with angel funding is because of the human face placed on the investments. Angels are usually investing in companies at an early stage, and are investing their own capital in the company. Entrepreneurs may be more likely to work that extra bit harder when they know they are playing with the personal cash of an actual person, not the collected funds of an entire firm without a human name. The reputation of the angel could play a large role as well, both for the attitude of the people running the company, and for the audience they are looking to attract. Most angels tend to be successful entrepreneurs themselves, and thus are likely well known in the startup scene. The chance to sit and talk with these investors, let alone receiving funding from them, is likely a treat for most entrepreneurs, so they may be more likely to be more careful with their money. Additionally, when the public hears of a new startup that may not immediately interest them, the mention of particular angel investors can change their mind. As angel investors mature, they build their own personal portfolio of companies they noticed and provided early funds for, so when company XYZ launches with angel funding from an influential angel investor, that alone can attract people to the product. I know personally that I have looked into startups I otherwise would have largely ignored simply because an important angel investor was certain they’d be a hit. “Some of the ‘softer’ features, such as angels’ mentoring or business contacts, may help new ventures the most.” – Harvard Business School report Since some companies receive early financing rounds from angels, it is also logical to assume that when working with a limited amount of cash, the entrepreneurs may be more focused on doing more with less. A company that bursts out of the gate with large amounts of VC firm funding may spend it slightly more haphazardly, whereas a company running on limited angel funds may adopt leaner practices and take baby steps toward success and future funding. As the report mentioned above, the “softer” features provided by the angels are also a large help to the companies. In his email newsletter yesterday, angel investor Jason Calacanis discussed loyalty and how he goes to bat for the people who are loyal to him and his companies. He mentioned that whenever he invests in a company, he immediately becomes an evangelist for that company and it’s founders, doing all he can to promote it. This may not be the same for all angels, but when influential investors like Jason get behind your company, they do their best to make sure good things happen. I would be interested to see similar data from this report that compares companies with solely angel funding versus those with more traditional VC firm funding mixed in. The influence of angel investors is significant, but I would think the angels alone are not enough to create more successful businesses at a higher rate. But the lesson here is, if your startup has the opportunity to include some angel investors (especially at the early stages), it would seem like a wise decision to go ahead with. Photo by Flickr user Brooke Anderson . Discuss

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Angel-Backed Companies More Likely to Succeed, Says Harvard Study

Tags:analysis, angels, Business, companies, people, personal, report, school, startup, such-as-angels

As Cattle Rustling Increases, So Does the Need for RFID

To most people, cattle rustling is a crime that happens only in old movies. But to cattlemen and ranchers in the United States, it is has always been part of real life. With an enduring economic recession, and cattle going for about $1,000 a head, rustling has experienced a renaissance. From Arkansas to Missouri to Oklahoma to Oregon , rustling is on the increase and the criminals involved are rarely caught. Brands can be manipulated and back roads are poorly patrolled by law enforcement. One possible deterrent is tagging. Sponsor Stealing cattle is not like shoving a handful of gold coins in your pocket. But knowledgeable thieves can put together a horse, dog and trailer and walk away with $10,000 or more at a time. Overtaxed local law enforcement, whose ranks have all too often been depleted by decreases in the taxes that fund them, can only do so much. Technology can do more. But only if it is used, and it will only be used if it is accepted by the men and women who are losing the cattle. Tagging and Tracking A vet can inject an RFID, or radio frequency identification, tag about the size of a grain of rice into an animal in seconds. When the tagged cow is shipped out, an inspector can use a hand-held scanner to retrieve the cow’s information. If the registered owner and the brand diverge, the inspector knows something is wrong. Not only could tracking technology help against theft, but it could also streamline inventory control for ranchers, and restrict health-related recalls to meat that is likely to have been infected. But adoption of technology in ranching is slow. Cattle have not been turned into nodes in an information network for a reason. That reason is not technical. The technology is there and it works. It’s behavioral, both on the federal side and on the ranchers’. Federal Indifference and Rancher’s Suspicions In order to be of any real use, the information attached to a tag must be uploaded to some kind of central database. There is no such database nor any plans to create one. Even when the U.S. government was flush, it was not a priority. The more rural and the more Western a concern is, the less importance it has to those who control the disbursement of federal funds. Ranchers are also highly suspicious of centralized federal authority over their business. Federal directives that saved a lot of land for future generations also wound up limiting feeding areas for livestock. Sometimes that’s been good, but many times it has turned a remote location that only ever saw cowboys into a small city, with concrete, powerlines and plumbing to serve the city-bred visitors. There have been many changes in the livestock industry in the preceding decades. To many of the remaining independent ranchers, the ones most likely to get rustled, those changes have been bad ones. Factory-raised beef defies both the historical spirit of ranching and makes it harder to make a living. Why should they agree to use a new technology, something that stinks of big ag? Entrepreneurs are the Ranchers of Tech I believe the key to any future adoption of tag-based livestock control, the kind of control that would have rustlers where they belong – running in place at the end of a spar – will require the participation of independent entrepreneurs and developers. A rancher is a lot more likely to trust an indie dev than a government rep, a federal investigator or a salesman from some software chaebol . Perhaps kids that were raised in the sticks and still have an affection for it, who do not want to see this way of life dead and who don’t want to see either the rustlers or the agricultural conglomerates determine how we eat, will apply some of their unique technological know-how – and a little of their grandparents’ elbow grease to the problem and come up with a way to read, record and retrieve information that ranchers could get behind. Maybe they could create a nation-wide, but decentralized and privately-held national cattle ID database, utilizing cloud computing and available to law enforcement as a tool that the ranchers themselves, and their indie tech partners, hold and control. Anything that doesn’t have their brand on it, they won’t touch. Amen to that. In the coming week I will be working with Kin Lane , a Web application and database programmer, to create a blueprint for the implementation of just such a system as I advocate here. We will post the blueprint in ReadWriteWeb next Friday. Further steps may include a survey of ranchers, to ascertain whether our plan would be accepted by the people it is designed for, and a case study using a set of half a dozen small ranches in southeastern Oregon. Discuss

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As Cattle Rustling Increases, So Does the Need for RFID

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Lotus Notes Adds Tungle, Tripit and Gist

The cloud fundamentally changes the way enterprise applications function. Increasingly we are seeing traditional enterprise applications emerge in the cloud and partner with other Web-based services that have consumer appeal. In turn, we are seeing cloud-based consumer type services transform into enterprise grade offerings that provide customers with the same experience they get in their work as they do at home. Sponsor IBM’s Lotus Note s is a clear example of how this symbiotic relationships is evolving. Yesterday, Tungle , the calendar application, released a Tungle.me app for Notes users. Tungle allows users to view other people’s calendards and availability. With Tungle.me for Lotus Notes, you can set custom availability and synchronize it with your Lotus Notes calendar. Once meetings are scheduled, they are automatically updated in the background. The news follows a number of applications that have been introduced for Notes users. Those include services like TripIt and Gist . Tripit is a travel planning service. Gist allows Lotus Notes users to add dynamic profiles for people in an inbox, calendar and contacts list. Gist for Notes allows a users to have news, blogs, and tweets all in one place, find related people, emails, links, and attachments. It connects to LinkedIn, Facebook, and Twitter. Discuss

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Lotus Notes Adds Tungle, Tripit and Gist

Tags:background, been-introduced, calendar, cloud computing, dynamic profiles, facebook, Gist, grade-offerings, Lotus, lotus notes calendar, lotus notes users, lotus-notes, people, symbiotic, Tungle, tungle-me, work

The State of Web Spam: Human-Posted Spam is on the Rise

Even though we have lots of tools to detect blog comment spam these days, spammers always tend to be one step ahead of our algorithms. While early blog spam was often posted by robots and easily detectable, today’s blog spammers are smarter. Instead of relying on robots, the team behind Automaticc ‘s Akismet spam filter reports that modern blog spam is often written by low-paid workers in India, South-East Asia and Turkey. Sponsor The “best written spam,” according to Akismet, comes from South-East Asia. As the Akismet team notes, SEO firms will often hire these low-paid workers and set them up to work out of Internet cafes and local universities. Akismet: “The ‘best written spam’ comes from South-East Asia.” Detecting Human-Posted Spam is Hard We have definitely seen this increase in human-posted spam here at ReadWriteWeb over the last two years or so. While early comment spam was easily detectable because it had nothing to do with the actual post, we now have to take a closer look at all the links our commenters use in their personal profiles in order to weed out the spammers. Often, comments that look perfectly legit will include a link to a Viagra or SEO site in the profile link. What About Regular Spam? Besides the rise of human-powered spam, traditional spam is still going strong as well. Akismet notes that “old-fashioned” pill, porn and malware spam still tends to originate from Eastern Europe and the Russian Federation. Spammers there still operate huge networks of malware-infected machines that run spambots. According to Akismet, the number of fake blog networks on services like Blogspot, Weebly, Tumblr, Ning and WordPress is also becoming more frequent and more highly organized. Instead of just abusing other people’s blogs, these spammers just create their own blog networks. Other forms of blog-related spam that are on the rise are auto-blog pingbacks from people using auto-blogging plugins ( mostly for WordPress sites), as well as hijacked blogs and wikis. From Porn and Pills to Pet Food and Roofing Akismet also notes that while early blog spammers used to focus on the traditional (and highly lucrative) niches around pornography, pills and malware, today’s spammers are often more interested in search engine optimization than hawking fake Viagra. Because of this, modern blog spam often includes links to “dentists, roofing and pet food.” Discuss

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The State of Web Spam: Human-Posted Spam is on the Rise

Tags:Akismet, Eastern Europe, news, people, personal, russian, seo, strong-as-well, traditional

What Twitter Annotations Mean

I love to sit on the beach.  One of the coolest things about the beach is the number of layers of visual depth.  Look at the sand and it’s beautiful, but zoom your eyes in closer and you’ll see a whole layer of life running around on the sand that you didn’t see before.  Look even closer and you can see individual grains of sand, water and light dancing between them.  Look closer still and you see that each grain of sand is a unique object with its own texture.  If your eyes are strong enough, or you have a machine to help you, you can see even more layers by looking closer still. That’s what Twitter is going to be like with the launch of Twitter Annotations this Summer. It’s a beautiful vision, with huge potential, but there’s another way to look at this analogy: you don’t build on the beach sand because it shifts too much. Will Annotations live up to its incredible promise? Sponsor What Annotations Are Last week Twitter announced a forthcoming feature called Twitter Annotations: it’s a system for almost any metadata to be connected to any Twitter message when it’s published. Inside every Tweet is now a space where you could put or find anything, including links out to further instructions or larger bodies of information. That’s always been the case with the 140 characters of content – but now we’re talking about systematic metadata intended for machines, to augment the content. The idea is dripping with potential, but also some risk. Isn’t much of life’s meaning found in the play between limits and the infinite? Twitter has been considering adding Annotations for at least two years, according to Platform Team member Raffi Krikorian. That’s a relatively large portion of the company’s young life. Every time a new bit of metadata was added to Tweets, like geolocation information was last Fall, the company would ask itself “should we be doing this, or should we just open up the platform for and and all metadata?” Now the company has decided to do just that. Twitter publishing tools can now add a description to any tweet their users publish, not as a part of the 140 character message, but as a small machine-readable metadata field that travels along with the content. What might this look like? We could see Annotations fields like: Link to a media file, like podcast enclosures, photos linked to, etc. Context about the Tweet like where was the author when it was published, maybe what the weather was like there at the time. Your Twitter publishing interface could offer you a special option to write reviews of movies, books, or links you’re sharing. The ISBN of the book, a link to a preview of the movie and the number of stars in your rating could be included in the Tweet Annotations. Any way you can classify, describe, append or otherwise enrich a Tweet with words or numbers can be included in Annotations. You Tweet, you attach a characteristic or quality, you define the characteristic and then you provide a value of how or what that Tweet did relative to the quality being referenced. Twitter clients like Seesmic, Tweetdeck and more will make it easy for users to add these annotations. Yes, this is meaningful in large part because of the 140 character limit on Twitter messages themselves, but isn’t much of life’s meaning found in the play between limits and the infinite? From Annotations Come Analysis Annotating a single Tweet is uninteresting, it’s when you hit the Twitter databases and gather together all the Tweets that share a characteristic that thinks get exciting. When those selected Tweets can then be cross-referenced with other sets of data from outside Twitter – that’s when the word fecund starts feeling inadequate. Show me all the Tweets from my friends that have links to music and play me those songs. Twitter clients like Seesmic, Tweetdeck and others are going to make viewing that kind of data a whole lot easier. Tweetmeme’s Nick Halstead believes that Annotations will be used most extensively to communicate webhooks, links to instructions for a Twitter client to follow. He thinks it will enable game play and help Twitter start acquiring more users again. “Because of the size of the data you can put in the annotations, I think people will come up with links to offsite resources. Seesmic is building their own platform for Windows to support plug-ins, but this reaches much further, but this lets Twitter clients augment a tweet with other services. Sf you were Stocktweets, you could attach a link in the namespace that’s in stocktweets, Seesmic could follow that link back to Stocktweets and ask it how to render it. So you could put a chart and any other associated information. It’s like FBML [Facebook Markup Language], the ability to embed applications inside the Twitter clients. Maybe threaded conversations. A game of Scrabble where the link points at a currently rendered scrabble board, so other people could look at the board and join in playing it. Annotations and webhooks would allow gaming to start happening on Twitter.” Halstead believes an Alpha version of Annotations could be made available to developers in a month. How about showing me all the Tweets from anyone that are referencing the President of the United States (subject: POTUS?), analyze the sentiment in the messages, show me where those Twitter users were located and tell me how those local sentiments change over time. Send me an alert when one of those starts to shift radically. Show me all the Tweets by people in their 20′s and in their 50′s (imagine an author age tag in Annotations, why not?), living near the site of a disastrous event. How do those discussions differ? There are all kinds of interesting questions that could be tackled when the developer world’s imagination runs wild on the terms of description applied to our messages. Of course it will be tempting to draw all kinds of conclusions from this rich data. We’ll surely be able to draw a whole lot of value from it. “You can learn something from almost anything,” Big Data cruncher and 80Legs CEO Shion Deysarkar says. “Just give me enough data, I’ll figure out something.” But let’s keep in mind the words of social network scientist danah boyd, who wrote the following on her blog this morning: Time and time again, I see computational scientists mistake behavioral traces for cultural logic…Big Data creates tremendous opportunities for those who know how to assess the context of the data and ask the right questions into it. But mucking with Big Data alone is not research. And seeing patterns in Big Data is not the same as hypothesis testing. Patterns invite more questions than they answer. Tweet Power Politics Twitter’s Krikorian says the site will probably list “trending annotations” just like it lists trending topics today. There will probably be a wiki where anyone can find out what namespaces are being used for what purposes. Really though, the classification system is going to be determined by the market. That’s something that worries a lot of people. “People who believe in building standards are conerned about our blase attitude about how we want to run annotations,” Krikorian says. He believes that the developer community will work things out for itself, just as it has in the past. “There has been a lot of emergent behavior around how to relate to tweets anyway, without our imposing much structure around it. The Twitter platform is continuously evolving – the developers will figure it out. Twitter developers iterate in public.” That’s likely to be cold comfort for people focused on the power of structured data standards. Many people are calling for Twitter to embrace the well-built efforts of the Semantic Web community. Krikorian says that 90% of Twitter developers don’t know what the Semantic Web is but that there’s certainly room for standards lovers to work within the Annotations scheme. Still, the absence of standard terminology could really be a problem. Annotations can’t be changed retroactively, either. Krikorian says that major players will dominate the obvious use cases for Annotations and the company will monitor and highlight really innovative Annotations developed by people on the margins. We’ll see how well that will work. Imagination will make the sky the limit for this publishing platform used easily by more than 100 million people around the world. But a shortage of forethought, planning and agreed-upon standards may bring that platform’s aspirations back down to earth quickly in the future. Time will tell. Discuss

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What Twitter Annotations Mean

Tags:analysis, Annotations, data, forthcoming feature, grains of sand, movie, Nick Halstead, people, platform team, power, semantic, summer, tweet, Twitter, United States, windows, words