Financial Services : Innovation + Job News

It is now time to look toward the land of milk and honey for the latest in tech. "Israel is famous for its technology innovation, though many companies have difficulty expanding into the US and global markets," says Mitchell Golner, Managing Partner of DreamIt Israel, the latest expansion of the Philadelphia based startup accelerator. After adding a New York City program in 2011, DreamIt Ventures goes global in 2012.

On January 17, applications opened up for Israeli entrepreneurs. Noelle McHugh, DreamIt's office manager, says companies have already started applying, and DreamIt expects to choose five Israeli startups to accompany 10 US-based entrepreneurs this summer in Manhattan.

Golner, who has been living in Israel, says DreamIt has been interested in developing a program in the Israel market for a while. "We are focused on helping Israeli startups expand in the US and in global markets. We will consider a wide array of companies that can fit the lean startup model. Most are in the Internet and mobile space and include B2B an  B2C businesses." According to Golner, the new program is a hybrid and the first of its kind in Israel. DreamIt Israel will be based in the environs of Tel Aviv. A specific location has not yet been announced.

Companies will spend one month in Israel and then travel to the US to spend three months in New York. "After the NYC program, when the companies return to Israel, they are offered a workspace for up to 2 months," adds Golner. "The curriculum, coaching, community, and other fundamental aspects of the DreamIt program are consistent across the Israeli program and the NYC program, with specific curriculum elements for the Israeli startups in the first month."

The deadline to apply to the program is early March. The Israel program begins April 15, and participants start the New York segment on May 14, returning home in mid August.  There will be two demo days for the overseas participants: one in New York and one back home. The Israel program wraps up in October.

Source: Mitchell Golner, Noelle McHugh, DreamIt Ventures
Writer: Sue Spolan

Center City based RJMetrics just closed on a $1.2 million round of financing from a syndicate that includes both local and national players. "Now I can go back to actively running the business," says CEO Robert J Moore, who recalls that the fast growing business intelligence company made a decision around the end of the third quarter of last year to go to market and see what potential deals might look like.

"We found a deal that made economic sense and we moved extremely quickly," says Moore. "Honestly, from the moment we decided we definitely wanted to raise money, it took less than a week to get all the commitments."

 

Moore and co-founder Jake Stein, who is COO, met while both were working for Insight Venture Partners, which gave the pair an edge during the fundraising process. "It's very common in these negotiations for entrepreneurs to be confused or intimidated by the legal aspects of raising capital," says Moore. "When one of these deals takes place, there are literally dozens and dozens of small terms, and they can go over the heads of people raising money."

 

The inspiration for RJMetrics also came while Moore was at Insight. "Part of my job was due diligence on new investments. A lot was driven by data analysis, which I was doing by hand in Excel and MS Access. I was doing that analysis dozens of times, and common themes emerged. As a programmer, I realized I could replace myself with a program."

 

The productized version of Moore's program is available to businesses for a low monthly subscription fee, and RJMetrics considers venture firms a lead generation channel. The company now has 60 customers, up from 20 in the beginning of 2011, and has grown from 4 to 12 employees in the same time period. The cash influx, which is already in the bank, will go to marketing and continued expansion.

Source: Robert Moore, RJMetrics
Writer: Sue Spolan

Todd McNeal's company Snapline looks like a whole lot of money: slick website, professional press release. "Snapline is just me," says Bella Vista based McNeal, who presented his idea at this month's Philly Tech Meetup.

Snapline uses information readily available on the Facebook API to provide a better shopping experience. McNeal has developed a set of plug-ins based on the social data. The first one, now in use, looks at your profile and gives recommendations based on things you like, as well as what other people of similar gender, age, and interest like.

A retailer using the Snapline plug-in can segment and market specific products. "A jeweler shows engagement rings to people who are single, and anniversary presents to people who are already married," says McNeal, who is now beta testing Snapline with one of the largest online flower and gift retailers. McNeal does not want to publicly divulge the company name just yet.

"I was with IBM out of college, working as a consultant with an e-commerce platform that was used by a lot of top retailers." It was there that McNeal developed a deep understanding of what was lacking in the retail interface.

McNeal plans on releasing several more plug-ins for e-commerce data management over the next month. "My goal is to get enough information to prove that we are a viable business, and then go look for funding in the early part of next year." McNeal's current marketing strategy is personalized face to face demos, making a go as a bootstrapped one-man startup with an enterprise solution.

Source: Todd McNeal, Snapline
Writer: Sue Spolan

If you've got an idea for a frictionless startup, then you have a shot at winning $5,000, no strings attached.

Philadev Ventures, the startup accelerator, has just launched Musemaka.com. A maximum of 200 entrants vie for one slot, paying a $100 entry fee. The winner gets a $5,000 budget to create a company. "We hold a challenge open until it has 200 entrants or for a period of three months, whichever comes first," says Philadev co-founder Chris Myers. "During a three-month period, we could fill one challenge or five. Whatever the number, winners are announced 30 days after a particular challenge closes."

Phil Ives, who co-founded Philadev with Myers, defines a frictionless startup as any business idea that costs little or nothing to start. Take the example of a blog. "If you are the writer, and you act as editor, it costs no money to start," says Ives. "Another example is a startup that begins with the design of a physical widget which can be outsourced to China, and requires a three to four thousand dollar initial investment to start selling products."

Philadev has been in business for one year, and Ives says of the six initial companies under its wings, two are about to launch publicly, although he cannot divulge details just yet.

"We have a couple of startups in our accelerator that would be better for this," says Ives of the inspiration for Musemaka. "For us as Philadev, if they don't raise venture or sell their idea, we can never see revenue."

Philadev will not take equity from Musemaka companies, but Ives is open to a future equity relationship. "It's a way for us to discover new startups," he says.

Ives is greatly influenced by the work of Tim Ferriss, whose bestselling book outlines the concept of the Four Hour Work Week. Ferriss defines a muse as an idea that can be tested for under $500, automated within 4 weeks and maintained within a maximum of one hour per week.

"The rolling nature of the application process is important because it helps to address the startup discovery problem I identify on the site regarding Y Combinator.," says Myers. "That's the most extreme example, but it is really difficult to imagine  how any venture group that employs business judgment to evaluate submissions is capable of handling 520,000 submissions a year, as Y Combinator does.

"The result is probably lots of good startups left out of the running. Their application numbers to class size gives startups something along the order of a 1 in 5,000 chance," adds Myers, who also indicates that an applicant has a better chance of getting into Harvard than Y Combinator. 

Says Ives: "This contest addresses a big piece missing from existing small business development organizations. Those places seem really good at helping people open up a physical retail space, but they haven't really cracked the nut on software as a service."

Money, he adds, is never the reason a business doesn't get built. And a big part of the Musemaka package is sage advice from Philadev, including when to call in the high priced lawyers, and when to start small and build.

Ives and Myers have just begun the process of getting the word out about Musemaka, and expect applications to start rolling in within the next month or so.

Source: Phil Ives, Chris Myers, Musemaka
Writer: Sue Spolan

On a brisk fall night in Langhorne, Occupy Novotorium was going down. A publicity stunt that drew local police, three tents were set up at the entrance to Bucks County's newest tech incubator, compete with drum circle.

Novotorium, a concierge-level tech incubator, opened its doors last week to show off a full service facility aimed at mid-level startups that want to grow bigger. At no cost to participants, and with no contract up front, Novotorium offers a three month residency that includes brand new skylit offices, a fully outfitted fitness room, a data center and spacious kitchen. Currently, the space, located above Voice Systems Engineering (VSE) Inc., has room for 10 people, with lots of room for expansion.

"Novotorium seeks entrepreneurs who are at least beyond proof of concept and have some sort of product launched, and  looking to grow and become profitable," says Mike Krupit, Novotorium's General Manager. "Most incubators focus on seed stage startups, making entrepreneurs venture-fundable, and plan for an exit. Our structure is not fixed like that of many incubators. We develop a program specific to the strengths and challenges, needs, and goals of the company."

The incubator is funded by Baron Innovation Group, the venture arm of Gary Baron, Founder/CEO of VSE and Vector180, also housed in the same building. That means Novotorium gets its funding in part from the profits of VSE's many websites, which include 1-800-gaylive.com, astrosource.com, and psychicsource.com. Vector180's website describes itself as "hospitality solutions for WiFi and surveillance."

"Our goal is to have two companies start in December. If we find our assumptions to be correct, the plan for 2012 would be an additional 12 companies," says Krupit, who is the former CIO of VSE.

Following the three month period, startups are free to go, and if they stay on, negotiate a contract that includes an equity share by Novotorium that will be determined on a per company basis, according to Maria Collins, Novotorium's Creative Director.

"Since we have only started taking applications this past week, it may be difficult to generalize the types of businesses that are applying," adds Krupit. "We have seen interest from information technologies, online services, offline services that are enabled by technologies, including one in the education space, and even an online radio company."

Source: Mike Krupit, Maria Collins, Novotorium
Writer: Sue Spolan

VCopious is expanding rapidly. The nine month-old, Conshohocken-based software company just announced it has received funding of an undisclosed amount from a consortium of four funders, including Ben Franklin Technology Partners of Southeastern PA, Emerald Stage2 Ventures, MAG and Silicon Valley Bank.

CEO Ken Hayward says VCopious is now "into a stage of development geared toward market facing activity," and capital raised in this round of funding will go toward global expansion. VCopious also announced that Siemens Corporation has signed a multi-year agreement to use the VC2 platform, billed as the "world's first virtual spaces application server appliance." The firewalled networking, socializing and tracking tool allows people to meet in cyberspace, regardless of physical location.

VCopious already has a strong relationship with SAP, which it counted as one of its first customers. "It's a proven model," says Hayward of the technology that was built with no original outside financing. "Unlike other tech startups that are trying to raise money to build the technology, we've been out raising money to expand market activities."

The next step for VCopious is to build out a sales organization that's focused on high level direct sales to enterprise, and then find distribution partners that will move the product beyond the reach of its own direct sales force, according to Hayward. "One of the most sought-after destinations is around collaboration, ecommerce and social media. Between those, the VCopious platform is an aggregation tool for all those capabilities."

While Hayward will not talk about revenue or company growth in concrete terms, he projects that the company's staff will double by the end of 2012, from 25 to 50 employees, which is impressive for a company that only launched in early 2010.

Source: Ken Hayward, VCopious
Writer: Sue Spolan
 

If you want to get ahead in the startup world, it helps to be audacious. Startup Weekend Philadelphia took place this past weekend, and the winner was Eff the PPA, a mobile app for finding parking, preventing tickets, and fighting parking tickets for a mere $5 fee. Second place went to HangPlan, a mobile app and website that helps people make plans with friends. Third place was awarded to Intro'd, a simple mobile app for connecting your colleagues.

Philly Startup Weekend (Twitter hashtag #phlsw) took place at the Earle Mack School of Law at Drexel University, thanks to law professor Karl Okamoto, who was also a participant in the 54-hour event. Okamoto's initiative, ApprenNet, with the Law Meets project, grew out of the first Philly Startup Weekend in February and is already in use in 60 law schools as a way to leverage peer learning, with potential vertical applications in other kinds of businesses. In fact, Okamoto and team will be meeting with a national restaurant chain this week to see if the Meets model can translate to hospitality management.

But back to the winners. Eff the PPA draws its rebel energy from the team of Drexel Law student Hans Smith and entrepreneurs Ted Mann and Ashwin Dhir. In short order, the team built a powerful app that even includes a geolocation function and timer so you don't lose track of your vehicle or the time left on your meter. The team exhorts, "It's time to beat the parking authority at their own game. This app gives you the inside scoop on how to score a legal spot. And if you are still socked with a ticket, it gives you a quick and easy way to get it thrown out." While judge Tracy Welson-Rossman voiced her concerns about the name, saying she didn't want to sign up for the startup's twitter feed, the group got the most audible and hearty audience response of all presenters.

HangPlan, which came from the mind of Melissa Morris-Ivone, who recently made an impression at Ignite Philly with her presentation about the Operation Nice blog, is a way to streamline social gatherings. Rather than find out after the fact about a great party, HangPlan, endorsed by Philly Party Ambassador, lets users get the scoop before the first toast. "We not only created a web app, mobile app, and an API, but we developed a brand, gathered research, and put together a social media presence," says Morris-Ivone.

You can see a full list of all 20 startups that presented this weekend. Brad Oyler, one of the organizers of the weekend, thinks the more full-time presence of mentors made a big difference and he's looking forward to the next startup weekend in April.

"Also, a lot of the teams focused on customer feedback to help shape their business," says Oyler. "A few teams, like SME Brain and ApprenNet, even had meetings with some serious clients."

Source: Karl Okamoto, Brad Oyler, Melissa Morris-Ivone, Philadelphia Startup Weekend
Writer: Sue Spolan

My mom called. "What's this LevelUp? I got an email on my BlackBerry that I have two dollars off at Miel." When a brand new tech company already has the attention of the 70-somethings, it's got to be good.

LevelUp, which has a rapidly growing presence in the Philadelphia area, is a new kind of customer loyalty program for local business. Rather than carry around a walletful of punch cards, says launcher John Valentine, who has just been promoted to VP of LevelUp for the east coast. The company is hiring here in Philly, with two positions open in implementation and sales. Each city is slated to have a total of six employees.

Currently, says Valentine, there are 129 businesses in the LevelUp community, with 10 new merchants signing up each week. Here's how it works: Customers sign up online with a credit card. Participating businesses have a device, which is really a smartphone on a lucite platform, which reads a QR code on your phone screen (Valentine says the next generation of readers will be smaller and more streamlined). LevelUp then charges your card, bypassing the shop's cash register, and every 24 to 48 hours, says Valentine, LevelUp sends payment to merchants. As the customer, you receive several dollars off each purchase, and LevelUp tracks your activity, rewarding you for repeat business.

LevelUp evolved out of SCVNGR, a DreamIt Ventures funded startup. The location based scavenger hunt game led to a desire to solve the loyalty piece of the puzzle. "How do we get someone to frequent a place?" asks Valentine.

LevelUp is growing concurrently in Philadelphia and Boston, with plans to take over the world. New York is next, then Atlanta, Washington DC and Miami. "There's been enough validation for what we're doing in Boston and Philadelphia that we need to scale up fast." Valentine, who calls it sticky, says those who start using the program come back for more. "Within the next two weeks, 49% use LevelUp again."

Aside from the novelty factor, says Valentine, LevelUp gives businesses several advantages: the loyalty program brings people back more, brings in new customers, and has the added effect of incentivizing people to spend more money. Because shoppers are getting 5 to 15% back, they're actually spending more, according to Valentine. If you'd like to try LevelUp, Valentine is offering $10 in global credit to Flying Kite readers. Just use the code TECH when you sign up.

Source: John Valentine, LevelUp
Writer: Sue Spolan