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Friday is the last day of New York Entrepreneur Week which upon its completion will have featured over 100 speakers from across the globe sharing their thoughts, advice and experience with attendees, but interesting stories have been surfacing around the event since as early as last week. A guest post on the event's official blog by Janine de Nysschen , a business consultant and endorser of change dynamics , raises the interesting truth that women play a very small role in startups and venture capital , but as her passion might indicate, she feels this trend is changing. Sponsor It's true. Though there are significant exceptions, we seldom here about female CEOs launching startups and receiving boat-loads of venture capital funding, heaven forbid it be from a female venture capitalist. But it's not just a startup problem, its a problem that persists in the majority of business fields; business is an industry that was only a man's game for a very long time, and women are still playing catch up. However, de Nysschen thinks there are factors about venture capital that make it less appealing to the businesswomen of the world. "The truth is that VCs invest in a stereotype, and that right now, the stereotype of high risk-tolerance, abnormal work ethic and business acumen seldom comes in the female form," says de Nysschen. She also says that a lot of VC deals are formed from existing relationships in the community, and points out that men and women tend to socialize in different circles, "especially in business," she adds. She also notes that while there is a shortage of female VCs and entrepreneurs, 70% of female VCs have been involved in deals that included female-led companies. Based on this, it's only fair that de Nysschen concludes that "if there were more women doling out money, there would be more women getting it." But things may be beginning to change. According to de Nysschen, women are the fastest growing subgroup of entrepreneurs - a fact she attributes to a growing trend of women choosing new career paths and educations. One of the reasons she says women have struggled in the venture-backed sector is that many VCs and founders come from backgrounds in which women are traditionally in the minority, such as engineering, computer science and biotechnology. However, women are statistically better startup founders than men, she says. "Women have been proven to build companies that are more capital-efficient than those founded by men, and they use less capital to achieve the same or higher revenue performance in early-stage years," she says. "Women don't fail as often as men: in fact, women-led high-tech start-ups generate higher revenues per dollar of invested capital and have lower failure rates than those led by men." Gender issues are nothing new to ReadWriteWeb, as in the past we've discussed the need for female oriented tech events , the unique market of female bloggers , while at the same time opening up discussion about whether women should be specifically catered to or not. As de Nysschen mentions in her post, there are more women in the world, and women do more purchasing of products and services than men do, so why shouldn't there be more women in the VC industry? Let us know you thoughts on female entrepreneurs and VCs in the comments! Discuss
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Why There Are Hardly Any Female Founders and VCs
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In the midst of the SXSW festival last month, we reviewed a mobile social network called LoKast . Our one lingering question about the app's utility, at the time, was were we really going to run around town staring at our phone to see if someone else nearby was running the same app? The answer was "no" then and is "no" now, but the difference now is that the iPhone OS 4.0 that was announced yesterday allows for background location multitasking . This opens up a whole new realm of experiences for the iPhone. Sponsor First, LoKast. LoKast is a self-described "disposable" social network. That is, as you move about and come near other people running LoKast, you can quickly interact with them. Then, when you move ot of range, you may never see them again. It is social networking based on location, without a persistent friends listing. So now, with background location monitoring, an app like LoKast is actually feasible. I can turn it on, leave it running and wander around town and perhaps have it notify me when I'm within range of someone. As Kim-Mai Cutler notes, background location also brings up some "slightly creepy" privacy concerns relating not only to applications running in the background, but also location based advertising. But what if you think about location based advertising like you think of iTunes' "Genius" function or all the other recommendation engine software you use? It may be tough to realize that you are not quite the unique snowflake you thought you were and that, indeed, everyday around three you end up at the same coffeeshop, but wouldn't it be nice for your iPhone to realize this and get you 20% off? Without you even having to lift a finger? Well, fine, maybe you have to lift an iPhone. The list of ideas for background location are endless. Of course, we'll have to see how quickly a battery gets drained with persistent GPS monitoring. Having the ability to let our phones deliver us information, as we move about the world, based on our location has some amazing potential. Think of EveryBlock , the hyperlocal news aggregator that Marshall Kirkpatrick went ga-ga over when it arrived in Portland. The block-level delivery of news wouldn't even need to wait for you to check it any more - it could simply deliver relevant information as you move about your day. Real-time rideshare services like Avego and Flinc suddenly become that much more feasible, in fast-paced, real-life situations. We could go on, but we have another couple of months before the next version of the iPhone OS comes out and we're already too excited as it is. What crazy, creepy or otherwise cool potential do you see with the new background location capabilities? Discuss
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What Background Location Brings to the iPhone
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This week we've got a book hot off the presses for your weekly dose of entrepreneurial reading as 37signals founders Jason Fried and David Heinemeier Hansson are back with their second book. Released earlier this month, Rework , a no-nonsense rethinking of how to successfully start and run a business, is the second book from Fried and Heinemeier who earlier authored Getting Real: The smarter, faster, easier way to build a successful web application . Sponsor This time Fried and Hansson take a more general approach to business by examining the ways that new companies are disrupting traditional business practices and making a big splash. They cover their entrepreneurial bases by reminding us that "no time is no excuse" and that "a business without a path to profit isn't a business, it's a hobby," but then also elaborate on less traditional practices that have helped them succeed. The main theme of the book is to trim the fat and do fewer things better; simplifying every aspect of your business and doing a smaller number of things at a higher quality is far better than trying to do too much and a mediocre level. There were times when customers of their products wanted more features and they refused to comply because it would slow them down and decrease efficiency. They decry time-stealing meetings, lengthy contracts, childish office politics and bloated inventories because they weigh down companies from reaching their full potential. Rework is a great read for entrepreneurs because it is very focused and doesn't waste any time with lengthy use cases. The book itself is an example of the principals it teaches; the quality of a written work is not based on it's length, so why should company be judged by how many features it offers? Fried and Hansson admit that the book, which comes in at a dense but brief 288 pages, was originally drafted to be nearly twice as long, but why say in 600 pages what you can say under 300? Another reason the book is a great read is because of the authors' open and honest tone. "Ever seen those weapons prisoners make out of soap, or a spoon? They make do with what they've got," one passage humorously points out. "Now we're not saying you should go out and shank somebody, but get creative, and you'll amazed with what you can make with just a little." Other useful and easily digestible analogies for their unique business ideas include comparing your company to a hot dog stand. They advise that the best way to trim down an inflated company is to find the "epicenter" by asking yourself, "If I took this away, would what I'm selling still exist?" The best hot dog stand doesn't worry about the decorations on the stand, or the condiments - it worries about the hot dogs. There are dozens of other valuable pieces of advice in Rework that are sure to inspire any entrepreneur or small business owner. But as LeVar Burton famously said at the end of each episode of Reading Rainbow, you don't have to take my word for it. Seth Godin, who has authored several books on business and entrepreneurship including The Dip which we profiled earlier this year, had nothing but high praise for Rework . "Jason and David have broken all the rules and won. Again and again they've demonstrated that the regular way isn't necessarily the right way," says Godin. "They just don't say it, they do it. And they do it better than just about anyone has any right to expect." This book is an obvious buy not only because the of the expert advice dispensed by the successful founders of 37signals, but also because the book is an easy, quick and inexpensive read. Personally, in a few short hours I was able to breeze through the audio version, which can be found online for less than $10. But if you prefer reading words on a page, the Kindle version is also $10, or a hardback copy is just $3 more at some online retailers . Discuss
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Weekend Reading: Rework, by Fried and Hansson
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The Web has hit a point where tracking pageviews is useless for startups. There was a time when all you needed to succeed on the Internet were lots and lots of eyeballs, and the best way of measuring those eyeballs was by tracking pageviews (measuring exactly which pages on a website are viewed by individual visitors). The dot-com crash showed us that the eyeball-based business model was a failure. Sponsor Since then, startups have moved toward direct monetization strategies such as subscriptions and virtual goods - and these businesses using these strategies require very different metrics than an advertising-based business would. Make no mistake, pageviews were valuable metric once, but their time has passed. Guest author Tim Trefren is one of the founders of Mixpanel, a real-time Web analytics service that helps companies understand how users interact with Web applications. He writes about analytics at the company blog . For startups that sell something, metrics like average revenue per user (ARPU) and customer lifetime value (CLV) are vastly more valuable than detailed pageview tracking. It doesn't make any sense to focus on pageviews (an approximation for value) when you can measure the real thing directly. There's also a clear pattern in the direction the Web is heading - toward interaction and responsiveness, and away from separate pages. If you're going for incredible user experience, on-page interactions are your bread and butter. Can you imagine what a drag it would be if the page reloaded every time you commented or 'Liked' something on Facebook? It would be awful. This trend further devalues the pageview as a valid metric. If you have a highly interactive Web application that spans only a few pages, there's not a whole lot of value in seeing how many times those pages were loaded. Much more valuable information can be found by tracking the parts of your application that your users are interacting with the most. The benefits here are twofold: You can directly measure the things that are important to you, and you gain unparalleled insight into how people actually use your application. If Not Pageviews, Then What? When you're deciding how to incorporate analytics into your strategy, the most important thing is that you are gathering actionable data. By this I mean that you have to be able to use the information you gather to make a decision and take action . If you're not going to use it to make a decision, it's a waste of time to even look at it. With this in mind, there are a few areas we should focus on: split testing, interaction tracking, conversion funnel analysis, and click tracking. These methods will give you the information you need to both improve your conversion rates and your understanding of user behavior. Just a few years back, your only options were to roll your own analytics or to pay tons of money to a giant company like Omniture. This left startups in a tough spot, one many startup founders still encounter today: it's difficult to justify putting a lot of development time into analytics when it's not your main product, and it's hard for a small company to work with a large sales organization. Luckily, the analytics landscape is changing. Many new companies are sprouting up to handle every aspect of your analytics, freeing you from the need to develop your own internal tools. Split testing Split testing involves creating different versions of your site and measuring how the changes affect user behavior. Your changes can be as small as a different call to action or as large as a complete redesign. With this data in hand, you can make changes to your website to massively improve your conversion rates. What companies do it? Google Website Optimizer is a free multivariate testing solution. It makes it possible to change a number of different things and determine the optimal combination of changes. Conversion funnel analysis Funnel analysis is a way of measuring conversion rates across multiple steps of user acquisition. For example, you can measure the rate at which visitors from the front page go to the pricing page, and then how many continue on to actually create an account. This is an incredibly important concept to understand, and can be applied to many aspects of your application. What companies do it? Mixpanel (my company) is a freemium service that provides funnel analysis and segmentation. Google Analytics has a feature called Funnel Visualization that provides basic pageview-based funnel tracking. KISSmetrics is a new company with a funnel analysis product in closed beta. Click tracking Click tracking is a great way to measure how effective your website is. Every click a visitor makes is recorded, so you know which links and buttons are receiving attention. There are a number of ways to report this data, but the most popular is to overlay an image of your website with a heatmap of all of the clicks. If your users aren't performing as you expect, you can try changing the page and continuing the test. What products do it? ClickTale is a freemium service that can generate click heatmaps and movies of single visitor sessions. CrazyEgg is a paid service that can generate a few different reports for your visitor click activity, including heatmaps. Event tracking Event tracking is a way of measuring exactly what users are doing on your site. Things like invites sent, videos played, and user signups all count as events. This functionality will grow more and more important as the Web grows more interactive. What companies do it? Kontagent is a freemium service that is focused on Facebook applications. It can track Facebook-specific events like invites and notifications, among other things. Google Analytics recently added basic event tracking to complement its pageview based service. Measure Relevancy, Not Your Ego Ultimately, analytics are crucial to online success. If you want to improve your startup, you've got to be measuring it. It's critical to measure the right things, though - the things that are actually important to your business, not things merely appeal to your ego. It can be mesmerizing to watch the unique visitor count go up day-over-day, but this is a dangerous diversion. The era of eyeballs equaling success is long past, so you should instead be measuring the things that are truly relevant to your business. If you're not measuring your visitors yet, I urge you to get your toes wet - track something small. The conversion rates for the buttons on your front page would be a great place to start. Is the pageview really dead? What other companies and services are available to help companies move beyond a pageview-centric mindset? Let us know in the comments Photo by Iva Villi . Discuss
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The Death of the Pageview
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This is the third entry in our exploratory series " Will One Company Dominate the Cloud ". Today we're blinking twice after reviewing the innovation engine at Amazon. The Amazon AWS product is all about services. While others are marketing the cloud with an explanation point, the cloud leader is focused on the raw building blocks. This includes everything from storage to people. Amazon is learning how to find new ways to optimize connections and monetize them in increments of time. Sponsor Amazon, the Verb: Motion When thinking of Amazon as a verb, one word stands out, motion. When Amazon was first introduced as the Internet bookstore, it immediately created a change in the landscape. It seemed like the writing was on the wall for brick and mortar retail, and to a large degree, it was. In a mere 15 years, it has disrupted the entire book vertical with an end-to-end digital system. Amazon is now in the position to completely automate the flow of content bits from upstream to downstream. Now let's look at the AWS services to see if can it do the same for computing. We'll analyze the services Amazon offers and how they work together, specifically in four areas: computing, storage, networking, and people. (Although we didn't include several areas in this roundup, including database and monitoring, we see them as clear signs of momentum and scope of Amazon's evolution.) Compute We signed up (again, as a new user,) for EC2 to refresh ourselves with its offerings and to remind ourselves what it means to be utility-based. Amazon defines workload in relationship to the types of instances the company offers in the EC2 solution. Windows on EC2 is optimized around bringing a three-tier Windows web environment into the Amazon stack. It supports ASP.Net, AJAX, IIS, and SQL Server. Amazon has also tuned it's network and storage offerings to nicely plug into the Windows on EC2 package and offer seamless integration with existing Amazon EC2 features like Amazon Elastic Block Store (EBS), Amazon CloudWatch, Elastic-Load Balancing, and Elastic IPs. IBM WebSphere is also supported on EC2 , and hosts a lineup of enterprise computing tools including the WebSphere Server, Portal Server, DB2, Tivoli Monitoring, and Data Quality products. IBM mentions that one of the targets is getting developers to use this model for getting development or proof-of-concepts projects up and running quickly. The patterns for firing up a new instance are defined as AMI (Amazon Managed Instances) so the software has been appropriately targeted the infrastructure instance it will run within. Have extra licenses, or want to retire legacy hardware? IBM has an agreement with Amazon to allow you to migrate your licenses to EC2. The EC2 MapReduce is a service that targets large data streams and optimizing processing of these data sets. It leverages the Hadoop Map Reduce project and provides as an example of breaking the computer entirely into services. The Map Reduce service doesn't just host an application stack, but is automatically configured using Amazon Simple Storage Service (Amazon S3). This is an example of an open-source implementation project (though Apache) optimizing in such a way that it fits on the EC2 stack as a core feature, and it has become a peer to the WebSphere or .Net patterns. Storage The storage offerings include S3, Elastic Block Storage, and Input/Output. Amazon S3 (Simple Storage Service) has been out there several years serving web based applications as their simple cloud away from home. Customers of it have famously stood up their entire data solution for images and other key storage tasks based on Amazon's S3 service. It's popular, well known, and evolving to include additional features that enforce data level integrity like databases. Elastic Block Storage is another storage service offered by Amazon. Instead of being a simple, writable data service in the cloud like S3, it is focused on EC2 instances that need storage as part of their footprint. An EBS can be built alongside the EC2 instance that is 1GB to 1TB in size and can be mounted from that service. This is designed for applications that expect raw physical storage locally addressed by the server. Network Amazon offers Elastic Load Balancing . Considering Amazon's power as an elastic compute provider, this is a critical piece of the puzzle. Here, load can be configured to continually monitor and self heal across a set of hosts, moving the resources towards optimal performance. The company also offers Virtual Private Cloud , which enables an enterprise to segment access to a portion of Amazon's cloud with access control and security enforcements (such as subnet, encrypted VPN). People An amazing thing about all of these services coming from Amazon, is that Amazon is a consumer facing company with an amazing relationship with consumers. Amazon has the ability to learn about us. We share our ideology (books we buy), lifestyle (products we consume), and financial position (credit cards we use). The company has also implemented an important part of identifying consumers by going deeper with services and verifying identity. The company implements a two-factor signup process that goes the extra step in granting authorization to a user to change compute resources. This second factor gives Amazon some assurance that the person really is that person, because in addition to getting the credit card and password (which are network resources), it also calls out to your phone to verify that the person logging in to the network has the phone (physical resource) at the same time. Here is step one: Signup Here is step two: Verify PIN on your mobile phone: And, step three, proceed (you are now free to spin up resources): When combining these two things together, Amazon is in a position to easily bring its current customer base to a two-factor security solution, and providing a service that meets government level controls. And, with two factor credentials it's less likely that there will be automated bots being deployed in Amazon's cloud by scripts or hackers. Amazon is in the unique position to view the next generation computing fabric from the consumer sales process. Amazon may be the only company in a position to see how it all pieces together, even perhaps a longer view of the future supply chain than its new book competitor, Apple. In addition to consumers and developers, Amazon also has the power of people as resources, with the Mechanical Turk marketplace. Need a simple task completed and queued for the Internet (of people) to execute on? Get started with one of these sample scripts and draw legions to your command. We find it compelling that Amazon has connected consumers, verified individuals, and tasks to be executed on. These pieces are perhaps foundations for a broad appetite for connecting workers with resources and optimizing along with way. Banking with Amazon - or - Selling Time Instead of Licenses The time value of money is the value of money figuring in a given amount of interest earned over a given amount of time. When signing up for the AWS features as a new user, we found ourselves asking looking at pricing options that reminded us of bank products. Earn more by committing to 1, 2, or 3 years. Are the Amazon Web Services an economy, and the individual services themselves currency? First, let's look at Microsoft and its revenue. A server is sold, Microsoft gets a piece by the sell of the OS. Part of this business model is very predictable (company gets x% of all PC shipments. And part of it is a bit lumpy. Where consumers have choices, they may choose to exercise them. For example, choosing Google Docs as an alternate to Microsoft Office, or bypassing an entire OS update, such as Vista. These choices represent risk to Microsoft in its revenue position. Amazon, is increasingly using something more predictable to sell it's services, time. And the nice thing about time, is that it's always ticking. So, instead of waiting for an entire "new PC", or "OS update", Amazon's implementation of selling resources is triggered to contracts. And, if this works, the consumer of the risk chooses the service longevity and the risk is reduced for Amazon. To put this in financial terms, the time value of money states. "The method also allows the valuation of a likely stream of income in the future, in such a way that the annual incomes are discounted and then added together, thus providing a lump-sum "present value" of the entire income stream." What this means, is that Amazon is going to understand value for its AWS users over the entire life of their contract and can start to model interaction patterns against future events. For example, if Amazon knows you have a 3 year contract for EC2, but you're 50% more likely to renew it if it also has SimpleDB services, it can trigger events and discounts based on these service connections. Here we see the EC2 reserved instance pricing chart. There is heavy discounting for committing to a term. From what we see, Amazon will be successful in gaining new efficiencies in pricing of computing resources, like it did with books. We expect the company to successfuly squeeze out hard costs that exist in the middle. We feel that Amazon is the quiet cloud company that you can "go long" with in terms of it's future value. Like the market itself, Amazon is a prime innovator in sharing the future into the terms of the present. Will cloud computing re-factor how we look at the technology stack for good, and will "payment" be in the middle? If so, is time the business model? Photo credit: wwworks Discuss
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Rulers of the Cloud: Will Amazon's Computing Fabric Become a New Economy?
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