TechCrunch
Customized Tablet For Restaurants E La Carte Raises $13.5M From Intel Capital And Others
E la Carte, a company that develops a tableside tablet for the restaurant and related hospitality industries, has raised $13.5 million in Series B funding led by Intel Capital with participation from Romulus Capital. The startup had previously raised over $5 million from Lightbank, SV Angel, Dave McClure, Joshua Schachter, and others.
E la Carte’s hardware for restaurants, called Presto, debuted last year to bring user-friendly tablets to restaurants. The 7-inch tablet includes a digital menu that lets you sift through the restaurant’s food and drink selection via photos and detailed descriptions using a touch-screen interface. There’s also a section for payments and games, including trivia and a drawing app.
Last year, the startup updated its hardware and software for a longer battery life, resilience to heavy restaurant use and spills and more.
For example, E la Carte redesigned the credit card reader for a more seamless swipe experience, and the LED light changes color based on table status (similar to the way you’d press the call button for a flight attendant on an airplane).
The company says that Presto helps restaurants achieve 10% sales boosts, 7-minute faster table turns, and 9X increases in loyalty program sign ups. The company currently has thousands of tablets deployed, and is creating $1 million annually in value for installed restaurants. The tablets are processing over $6 million in orders and payments. Chain partners include Genghis Grill, global restaurateur HMSHost, and Evergreen Restaurant Group, a franchisee of Outback Steakhouse.
Founder Rajat Suri says that E la Carte will use the new investment to add additional product and sales staff. The company also plans to double down on adding personalization technologies to its consumer-facing ordering system.
As we’ve said in the past, Suri is betting that Presto represents the future of restaurants. It’s not just in the actual tablet hardware, but it’s also about using data to control what’s offered on the menu and being able to dynamically change menu options based on demand, inventory and more. Clearly, personalization of the ordering experience could be a game changer for any restaurant.
Today Is The Last Day To Apply To The Disrupt SF Battlefield
As Disrupt SF gets ever closer we’d love to have you present on our Battlefield stage. But if you haven’t applied, how can you appear? Your goal today is to head over here and submit ASAP. Registration closes tonight. We want to see your startup in SF.
In addition to the end of Battlefield applications we’re encouraging folks to buy extra-super-earlybird tickets before they go up a few hundred dollars every few weeks. Remember you can also get one free ticket to the event if you take part in the Hackathon and tickets to that event will be available shortly.
In all, we’re coming down to the wire here and we’d love to see you at the event. Get your applications in and we’ll do the rest!
Good luck and happy Disrupting.
Like Google Voice But Live Outside The US? Then Try VoxSci's New iO6/Andoid App
Google Voice remains a pretty useful service if you want your voice mails turned into text messages. However, it’s ability to do so accurately is a little hit and miss. Indeed, there are numerous websites that contain hilarious Google Voice transcriptions, often on Tumblr blogs. Plus, Google Voice is only available in the US. VoxSci is a service which has been operating for a while in the UK, but has now launched an iPhone and Android app to do what Google Voice does, but for the rest of us outside the US.
VoxSci converts the first 50 characters of your voicemail for free, however the user can listen to the entire voicemail within the App. if the user wants the voicemail fully transcribed they will need to subscribe. To get the whole voicemail converted to text costs £5, £10 or £25 per month with payment charged to an iTunes Account on the iPhone.
VoxSci has a number of useful features including voicemail search and you can respond; by text, email or call. There are numerous other features.
Alternatives like Hullomail charge for the first 10 seconds of a voicemail to be transcribed and don’t have the ability to fully transcribe a voicemail. Also Hullomail charge to copy voicemails to emails whereas VoxSci doesn’t.
The main difference between the service and Google Voice can be summed up in one word: quality. It’s by far the most accurate voice to text service I’ve come across and is worth checking out.
The Daily Muse Expands From A Community For Professional Women To "The Muse," A Career Destination For Everyone
The Daily Muse is rebranding today to serve a wider audience. The company has expanded and is going under the name The Muse now, which includes job listings, company profiles, and a career advice publication under the old name, The Daily Muse. The Daily Muse originally targeted women in their twenties and thirties, but The Muse will now offer content for all professionals.
“As we grew, we began to notice something we didn’t expect: People we didn’t intend to find us, who we didn’t think would need or use our resources, came in droves,” the company wrote in a blog post today. “They were seeking the same thing we were: An answer to the question, “What do you want to do with your life?”
The site, founded by ex-McKinsey analysts Kathryn Minshew, Alexandra Cavoulacos and Melissa McCreery, launched in September 2011. The company was a member of the Winter 2012 Y Combinator class, and launched the visual job search product Company Muse in February 2012.
Minshew tells me that the company heard from men, professionals in their fifties and sixties who were looking to re-enter the workforce or switch careers, military service men and women looking to enter civilian careers, and others who identified with their content and asked them to open things up to a broader group.
Minshew says one reader said he used the site every day for a month or so before realizing that it was targeted at women; he likened the experience to going to the bathroom and realizing there aren’t any urinals there. The team chuckled over the metaphor, but realized that they could reach a broader audience while still sticking to their core mission.
“We still want to empower women to kick ass at their jobs,” the post said. “And we want to empower men, too. We don’t want to—and we won’t—ignore the issues that women still face in the workplace, but we want this to be a broader conversation, and as we continue it, we want to bring everyone to the table.”
“We don’t want to say we’re not for women anymore, because that’s still our core demographic,” Minshew explains. “But we also want to acknowledge that the conversation about women in the workplace is more effective when it’s not in a vacuum.”
The company redid the site’s navigation, focusing more on careers and job search, and condensing the peripheral content, on topics like food and travel, into a smaller space on the front page. The editorial staff will be introducing more male voices and more perspectives from professionals over 40.
Minshew tells me the site now has over one million monthly visitors and the staff plans to expand it internationally by the end of the year. She also says the team is growing, and will be at 14 full-time staffers and two interns next month.
Thanks To iOS 7′s Game Pad Support, Flipside Controller Case Gets A Second Shot
The Flipside was a Kickstarter project I covered last December, which aimed to create a Bluetooth video game controller case that charged via solar power and used low-power Bluetooth 4.0. At the time, it had a very ambitious funding goal, and was hurt by the lack of official support for game pads in iOS. Now, it’s back on Indiegogo, with wind under its sails thanks to Apple’s inclusion of a universal game controller SDK in the upcoming iOS 7.
Flipside creator Justice Frangipane says that the Flipside was subject to Apple’s review last fall, and that the team there was very excited about the project and even offered support, but that Frangipane wasn’t allowed to discuss any details ahead of the announcement of iOS 7. The Flipside offers the ability to work as both case and controller for an iPhone, but can also work as a Bluetooth controller for Mac or PC, iPad, or Android tablet.
The Flipside has one pretty significant advantage over other designs, in that it is solar-powered, and Frangipane says it can charge faster than the battery depletes through use, meaning it should theoretically never be completely drained, unless you seal it in a light-tight environment. That built-in battery is also supposed to last 10 years, Frangipane claims.
This time around, Flipside is setting its sights on a more realistic funding goal of $40,000, after failing to come close to its $135,000 goal and cancelling the Kickstarter project early last time. The Indiegogo campaign is also the flexible variety, which means Frangipane and his collaborators (which include iDevices, the creators of iGrill) will retain any funds raised by the end of the campaign, even if it doesn’t meet its target.
Frangipane says that the iOS 7 controller support changes the game for accessories like the Flipside, especially when those devices offer the kind of integrated controls that you’d get from a gaming handheld like the PS Vita.
“I think that if a controller like the ‘Flipside’ can gain momentum it will change handheld consoles globally,” he said. “Currently Vita and the DS hold the serious gaming market because they have controls that support serious gaming needs. The iPhone doesn’t, but if you take a $40 game that currently sells to a market of a million and then you open that market to another 200 million consumers, you’ve just changed high end gaming.”
As to whether one device will win out over others in this new space opened up by iOS 7, Frangipane says he thinks there’s plenty of opportunity early on for variety and healthy competition, and believes we probably won’t see anyone dominate right away come iOS 7′s consumer release.
“The reality is we are in a hundreds of millions of consumers market that is really just opening up for the very first time this fall,” he said. “It’s going to be bigger than huge and I am really glad to be part of the pioneering few. There is a need out there so large that without question we can all be very successful at the same time. Then, I’m sure the market will decide within a few years what type of mobile controllers will and won’t be successful long-term.”
The Flipside is available to Indiegogo backers for a starting pre-order pledge of $60, and the anticipated ship date is March 2014, so we’ll likely already have seen a host of iOS 7 game pad competitors emerge by then. Still, this hardware startup is determined to be part of that first wave, and hasn’t been discouraged by setbacks so far, so the Flipside is definitely one to keep an eye on.
Rocket Internet Revs Up Easy Taxi, Its Latin American Hailo, With $15M In Funding
Rocket Internet, the Samwer Brothers’ Berlin-based e-commerce startup incubator, is taking its Latin American ambitions up to the next gear. Easy Taxi, a Hailo-like app for calling up taxicabs, is today announcing a $15 million round of investment from Latin America Internet Holding (LIH). LIH is Rocket Internet’s holding company in the region, and it is part-owned by Millicom, an emerging markets service provider that also invests in Rocket startups in Africa. Easy Taxi will be using the funding both to continue to build out its operations in Latin Amercia, but also to gear up for “global” expansion.
That could pit it closer to competing against Hailo, the taxi app that seems to have inspired both the Easy Taxi service as well as perhaps an element of its logo (seen here to the right). Both apps (like Uber and others as well) use a mobile app-based system to link up drivers with passengers. Passengers can track where the nearest cars are on in-app maps, and similarly drivers can use the app to track passengers. (And following with logo similarity, the apps have lookalike icons for doing this.) The difference between Uber and Hailo/Easy Taxi is that the latter apps rely more on the wider cab service, while others like Uber have cultivated their own fleets of non-yellow-cab drivers.
For now, Easy Taxi operates in Rio de Janeiro, Sao Paulo and other Brazilian cities (where it first started, in 2011), as well as Botoa, Salvador, Lima and Venezuela. Further afield it looks like Asia is coming next, with outposts already in Seoul and Kuala Lumpur, but also plans to add Manila, Hong Kong and Bangkok to the mix.
Hailo, meanwhile, is active in London, Cork, Dublin, Barcelona and Madrid in Europe; Boston, Chicago, New York, Toronto and Washington in North America; and Tokyo in Asia and also has its eye on international growth, fuelled by some $50 million in VC funding, including a $30 million round announced in December 2012.
A spokesperson for Rocket Internet would not say how much Easy Taxi has raised to date, although a $4.9 million round, also from Rocket itself, was disclosed in October 2012. This round in Easy Taxi, relatively speaking, is early-stage and small in the wider scheme of Rocket Internet companies, which go on to pick up funding in the hundreds of millions of dollars as they ramp up to compete against local and potential international rivals. Recent rounds have included $100 million for Lazada in Asia; $120 million for Lamoda in Russia; and $100 million for Zalora, another Asian fashion e-commerce effort.
“When we started the company in 2011, we had only one goal: To connect taxi drivers and passengers the smoothest, easiest and safest way possible,” notes Dennis Wang, Head of International Expansion of Easy Taxi. He says the company now has more than 30,000 taxi drivers in its network with almost 1,000,000 downloads of the app itself. “With the recent round of funding, we want to reinforce our position as market leader and continue our global expansion.”
The company does not disclose how many active users or turnover to date.
Like many e-commerce companies, and those like Uber and Hailo working in the livery service specifically, the key to success in these businesses is to nail the logistics part of the equation. This not only makes the running of the service itself more efficient, but it also lays the groundwork for growing it out, and potentially adding further services around it — these could include courier work or other kinds of delivery. For a company like Rocket Internet, with holdings spanning food delivery and the sale of goods online, you can see how something like Easy Taxi could easily plug into that infrastructure to help bolster those other businesses. That can be used both during downtime on the taxi service itself, or just to help diversify revenue streams. Easy Taxi already names Payleven, the Rocket Internet-backed mobile payment service (“Square clone” if want the quick description), as a partner, to help some drivers take payments more easily on the fly.
London ‘Tech City' Cluster Gets Double-Speed 4G Networks Courtesy of EE
Back in April we were told that London’s highest concentration of tech companies in the East – dubbed Tech City by the UK government – would be getting high speed mobile connectivity. Well, it turns out Carrier EE (the only with with a 4G network right now) is delivering, partnering with the Tech City Investment Organisation, and is switching on a network of “double-speed” 4G hotspots. However, there is more. EE opening up its network APIs to application developers in the area and will be providing business and mentoring support for Tech City start-ups.
Olaf Swantee, CEO at EE, says its 4G network has now surpassed New York City for mobile data speeds. Joanna Shields, CEO Tech City and UK Business Ambassador for Digital Industries, noted that this switch on will help startups “build, test, and develop the digital products and services of the future.”
The double-speed 4G will have headline speeds up to 80Mbps, and “average” speeds of 24-30Mbps. Previously 4G speeds in there area was were 19.4Mbps. In other words, if you want to test out apps build specifically for 4G networks, this is going to be the place to head. EE will also install 4G mobile W-Fi hotspots in parts of Tech City, giving free 4G access to Wi-Fi enabled devices.
But this won’t just be limited to London. Tech City and EE are also investgating rolling out similar programmes in Bath, Belfast, Brighton, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, Liverpool, London, Manchester, Newcastle, Newry, Sheffield and Sunderland as part of its “national technology cluster alliance.”
Imgur's Android App Officially Debuts, Content Creation Tools Coming Soon
Imgur, the simple but popular photo-sharing site that’s a favorite among Reddit’s user base, is today “officially” launching its first mobile application. And Imgur, due to its unconventional ways, has gone Android-first. (Many of its users’ images fail to pass through Apple’s strict guidelines on content and copyright.) Of course, the most devoted Imgurians have already installed the new mobile app in its earlier beta format, which was tested in the wild. This is also why the Google Play Store sports a fair number of poor reviews – users had been reporting bugs and other issues with beta builds, and marking the app accordingly.
Today, the official app already has dozens of competitors whose third-party creations have been built on top of the Imgur API. In fact, when searching for “imgur” from your Android, you’ll now find the top result is the 4-star rated “Imgur for Android,” which had established its position as a preferred way to browse and upload to Imgur’s public gallery or any subreddit (Reddit’s sub-sites devoted to specific topics.)
Many users will be happy with these alternative apps, and will see no reason to change just because this new app is the “official” version. But that may change in time, as the company adds more functionality to its flagship mobile product.
Like many of the unofficial client apps, Imgur’s new app allows users to view and upload photos, and it also supports sharing, commenting and engaging with the broader Imgur community. The company is also teasing upcoming features due to arrive in “coming months,” which will help with content creation, as well as personalization. That earlier part could be intriguing – if Imgur moved from being only an image-hosting site to one which involved itself a bit more in the process of image (and meme) creation, it could further define its niche in the crowded photo-sharing market as something more than an online archive.
The company has long since wanted to become a destination site for viral images and image-based memes, similar to how YouTube become the go-to destination for videos. We’ve previously speculated that this means Imgur will have to at some point develop its own meme or animated GIF generators, in order to help feed more content onto its servers.
In advance of the mobile app’s release, Imgur overhauled its API at the end of last year, to add support for functionality introduced in a site upgrade, including image uploads to accounts and the user submitted Gallery, account management, album management, voting commenting and replies. At the time, the company said it has issued over 10,000 API keys, for both desktop and mobile applications. By allowing its own developer fan base to compete with its official products, the company is on the one hand making its service more accessible to its user base, but it has also, to some extent, lost control of the experience it wants to offer its users.
According to Imgur CEO Alan Schaaf, the company decided to build for mobile after seeing a dramatic increase in mobile visits – up from 7 percent in January 2011 to around 30 percent at the beginning of 2013.
The Imgur Android app is available here. The company is still working to get an iOS version approved.
You're Funny, Huawei
And you thought holding a Galaxy Note II to your ear made you look like a tool. Meet the Huawei MediaPad 7 Vogue, a tablet from a company that is clearly in touch with the needs of the common man.
No word on pricing or availability, but the tablet’s recent spotting in the FCC’s database suggests that Huawei’s is expecting to sell this to douche nozzles abroad.
SlashGear has the rest of the details if you must know the screen resolution or clock speed of the SoC.
All jokes aside, Huawei shouldn’t be dismissed as an also-ran out of China. Despite leaving the U.S. market over government scrutiny, company is quickly becoming a global force in telecommunication. The company is a leader in its home of China, and was the third best selling smartphone vendor worldwide at the end of 2012. Still, there isn’t anybody on earth that’s going to want to hold a tablet to their ear.
Europeans Will Now Know When And What Data Gets Compromised In A Breach - Unless It Was Encrypted
In the wake of the latest notice from a major internet company revealing that user data has been compromised — Facebook’s admission of a security bug compromising data from 6 million users — the European Commission today is publishing new, Europe-wide rules that will require ISPs, carriers, broadband providers and others to report to both national regulators and to subscribers more specific detail about what has been compromised within 24 hours of the breach.
But it’s also throwing them a couple of bones. First, to get companies to invest a bit more in security, if they implement approved encryption techniques, then providers do not have to notify the subscriber if they have implemented the appropriate protection measures (although they still have to notify the national authority). Second, the EC is not requiring ISPs and others to report all breach details to subscribers; it merely gives them more specific criteria to help assess when they should.
There is another question mark here: how these rules affect companies who are not ISPs but are still retaining vital customer information. We are reaching out to the EC to ask how, for example, sites like Facebook, Twitter or Evernote — all of whom have released statements on breaches and leaked information in the last several months — would be impacted by the rules.
(Update: Still waiting to hear back on the impact to internet companies but in the meantime, the EC has sent me some other details. It turns out that governments will be exempt in these rules. “The measures apply only to telecoms providers and ISPS,” a spokesperson told me. “The ePrivacy Directive itself has a general exemption for justified national security reasons, and government requests for access to personal information must be court-approved.”
Update 2: Facebook, Google and others are not covered by the ePrivacy Directive, and therefore not by today’s news, according to the spokesperson. They are, however, covered by the Data Protection Directive, which affects all controllers of data, and may end up getting rolled into the same requirements as a result of that. “The Commission also proposes to update that wider data protection directive,” he says. “But we don’t know what the outcome of those reform negotiations yet. If the Commission proposal stayed in its original form, then yes Facebook, Google, etc. would then have the same obligations as outlined today to telecoms companies.” Obviously any further substantive questions on this particular issue, the spokesperson adds, should be directed to Viviane Reding’s office; she is the VP of the EC in charge of justice.)
The background to this: the EC points out that they have had specific data reporting rules in place since 2011 — you can read them here. These cover such details as name, address and bank account details and information about phone calls and websites visited. The issue is that these rules fall under a “general obligation” that have not been clear on timescales and specific requirements.
The new rules released today cover four main areas:
- National authorities will now need to be informed within 24 hours of a breach getting detected. “If full disclosure is not possible within that period,” the EC writes, “they should provide an initial set of information within 24 hours, with the rest to follow within three days.
- Companies will now need to specify which pieces of information are affected and what measures have been or will be applied by the company.
- Companies are also getting provided more specific criteria to use to decide whether to inform users. “In assessing whether to notify subscribers (i.e. by applying the test of whether the breach is likely to adversely affect personal data or privacy), companies should pay attention to the type of data compromised, particularly, in the context of the telecoms sector, financial information, location data, internet log files, web browsing histories, e-mail data, and itemised call lists.” Annoyingly, this means that the EC is stopping short of requiring companies to always inform users.
- And, because this is a bureaucracy we’re talking about the EC will now create a standardised format (“for example an online form that is the same in all EU Member States”) that companies will use to notify authorities.
Along with not requiring companies to disclose all data breach information to users, the EC is giving them one more exit from reporting: if they invest in appropriate encryption, they would be “exempt from the burden of having to notify the subscriber.” This is because encryption techniques “would render the data unintelligible to any person not authorised to see it.” The EC says it will be working with ENISA, the European information technology security agency, to publish a list of approved encryption techniques.
These rules are set to come into force in the next two months, and whether or not you think they will add more confidence in companies, the EC sees them as getting closer to a fully disclosed and fair system:
“Consumers need to know when their personal data has been compromised, so that they can take remedial action if needed, and businesses need simplicity. These new practical measures provide that level playing field,” European Commission Vice-President Neelie Kroes said in a statement.
These rules will be separate from two other major developments on how companies can use IT data and implement security: a proposed revision of EU legal framework for data protection and a new proposal for a Directive on network and information security.
Samsung Galaxy Tab 3 10.1, 8.0 and 7.0 Coming To The U.S. July 7 For $399, $299 And $199
Samsung’s new Galaxy Tab 3 line has been official for a little while now, but U.S. availability and pricing was up in the air until today. The relatively cheap tablets are going to be $199, $299 and $399 for the Galaxy Tab 7.0, 8.0 and 10.1, respectively, and will be available from retailers including Best Buy, Fry’s and Amazon beginning on July 7, with pre-orders starting tomorrow, June 25.
For those who aren’t familiar with these devices yet, the Tab 3 line comes in three size options, the 7.0 with a 7-inch 1024×600 display, the 8.0 with an 8-inch 12800×800 screen, and the 10.1 with a 10-inch 1280×800 display. Both the Tab 8.0 and the 10.1 get Android 4.2 and beefier processors, while the 7.0 runs Android 4.1 and has half the onboard storage with 8GB (though all are expandable via microSD).
The full stats of each device are available at Samsung.com, but maybe the most interesting thing about them is that they exist at all. Samsung’s Galaxy line of tablets have never been iPad-level successes, and Samsung has since introduced the Note line of tablets, which seems to be where it’s focusing most of its innovation energy and R&D resources. So why bother continuing with the Tab line at all? Isn’t that just fracturing its potential buyer audience for any one tablet device?
Samsung offers its own answer in the announcement for these devices, citing Forrester research to justify its wide-ranging multi-model lineup. Samsung says that since Forrester has found that around half of those who own both a smartphone and a tablet opt to use the tablet to get online, and since people use tablets for a wide range of different activities, it follows that Samsung should offer a tablet perfectly tailored to each different use case. That’s not the same conclusion I’d draw, however; given the same information, I’d argue that building one or two tablets that cover the range of consumer needs would be a better play, but I’m not Samsung, and I’m not an undisputed leader in mobile electronics.
Samsung’s massively diverse product line was recently visualized by U.K. consumer electronics buying guide “Which?”, revealing not less than 26 sizes for Galaxy devices released over the past few years. But to me it looks less like an attempt to cover the gamut of buyer needs, and more like a way to block out the competition by occupying every available niche. Individually, Samsung’s products, especially in the tablet category, aren’t runaway successes; but taken together, they represent a wall of minor wins and customers won over; nearly every consumer want is addressed, even the contradictory ones.
And it’s working: Samsung’s tablet share has ground 283 percent over the last year and make up 17.9 percent of all shipments worldwide, according to IDC’s most recent numbers. Once, all mobile players were looking at simplifying their product lines to be more like Apple, but now Samsung is surging on a scattershot approach, and it has the resources and the momentum to keep at it for a while to come.
Michigan's Huron River Ventures Partners Announces $11M Fund For Energy Efficient Startups
“Ann Arbor is the natural startup hotbed,” said Tim. “We intentionally opened our first office in Ann Arbor. That’s the center of talent in the Midwest.”
Huron River Ventures Partners, an Ann Arbor, Mich.-based early stage venture capital firm, just announced that it recently closed the final round of its first fund, Huron River Ventures I at $11 million.
Tim Streit and Ryan Waddington, managing directors of Huron River Ventures, are ready to invest in more companies looking to change the way we consume energy. The pair moved to Ann Arbor and started investing in young startups in 2010. Since then, they have made seven seed-stage investments in energy-efficient companies including Side.Cr, FarmLogs, and Ambiq Micro.
But this isn’t about just solar or wind energy. This is about companies with a novel approach to consumption and use. For example, as Sterit told me, they invested in Side.Cr because of how it changes transportation, Michigan-based FarmLogs for its potential to disrupt agriculture, and Ambiq Micro, a company that claims to build the most energy-efficient microchips.
This isn’t a fund looking for companies built around buzzwords like “cleantech” or “green energy”. This is venture capitalists investing in technology that’s clean.
Both are from the great state of Michigan, attended the University of Michigan, and returned to the Great Lakes State after stints elsewhere.
“The caliber of talent here, young tech talent, and on a relative basis, is a greater access to talent and the cost of doing business.” Tim said. “You have access to human capital and financial capital that’s growing very quick. I think you need to overlay the Midwest work ethic. We are very bullish on the work ethic.”
As someone who has spent a good deal of time in Detroit and Ann Arbor, I can tell you this is a very common sales pitch. I was born in Michigan and never left. We’re very proud of our talent and work ethic. But the state is struggling to retain the talent it trains.
As Tim explained, Ann Arbor naturally attracts talent. “That being said, it’s a bit harder to stand out in Ann Arbor than Detroit.”
“Why fight for money in Ann Arbor when there’s low hanging fruit in Detroit,” he said flatly, pointing out the free office space and access to technical resources provided by Dan Gilbert’s companies. “But this isn’t Silicon Valley.” he added. “Fellow VCs discovered we don’t have to fight over deals. There’s a lot of collaboration between Ann Arbor and Detroit.”
Predictably, upon moving back to the area, Tim and Ryan quickly rediscovered the depth of the technical talent in the area.
“We’re finding a lot of rock star technical founders here,” Tim explained, pointing to FarmLogs, one of HRV’s early investments as a perfect example. The Y Combinator alum just closed a $1 million seed round, which HRV participated in, and aims build a cloud-based analytics platform for farming.
FarmLog’s founders didn’t attend Stanford or MIT, although Tim promised me that they could have if they wanted to, but rather went to Saginaw Valley State University, a small college close to the family’s farm.
With this $11 million fund, HRV will continue its goal of providing seed and early-stage capital, support and guidance to startups in and out of Michigan. The pair travels a lot, and they’re finding that VCs in the Valley are increasingly interested in the overlooked sectors startups are exploring in the Midwest.
“VCs are dying to see what we’re working on. There are so many me-too businesses in Silicon Valley – everyone is doing the same thing. Look at FarmLogs: Agriculture is the second largest economic sector in Michigan.”
This fund is just the latest from the many firms in Ann Arbor. With the University of Michigan in the city and several other colleges in the area, it’s long been a popular spot for VCs to set up shop. Per the Michigan Venture Capital Association’s annual report (PDF), out of the 106 venture-backed companies in the state, 43 are based in Ann Arbor alone. CrunchBase lists ten VC firms within Ann Arbor’s city limits.
Venture investment is quickly gaining steam in Michigan. 2011 saw a record year for fundraising and likewise, in 2012, firms invested $232 million over 47 deals. It was a dramatic increase over 2011 levels where less than $100 million was invested. This spike caused the state’s national ranking to jump ten spots, landing it as the 15th most prolific state in terms of capital investments.
Huron River Venture Partners was selected by the State of Michigan, which awarded the fund’s first $6 million. The remaining $5 million-plus came from a combination of family offices, high net worth investors, and corporate partners, including DTE Energy Ventures. The VC firm has LPs all over the country, all of whom have a tie to the State or the University of Michigan and share their commitment to building great early-stage technology companies in Michigan.
Advice From The Game Maker That Made GungHo Worth $14B: “Listen To Your Wife.”
One of the most absurd stories this year has been the rapid rise of Gung-Ho, the Japanese gaming company that saw its stock surge by more than 6,000% because of a single hit mobile game called Puzzle & Dragons.
The company is now worth $14.4 billion on public markets. That’s more than twice as much as Electronic Arts is worth and about seven times Zynga’s market capitalization. For a brief moment, GungHo even surpassed Nintendo’s valuation earlier this month.
GungHo’s rise came through Puzzle & Dragons, a title that earned it an estimated $113 million in April — solely in Japan. It also recently hit 15 million users just a week ago, primarily in Japan.
The game itself is a puzzle matching title. The player has to line up several matching tiles in a row and they collect cute animal characters as they level up and battle other monsters and bosses.
The company’s success underscores a big shift in power between mobile gaming platform providers like DeNA and GREE, which ruled in a predominantly feature phone era, and first-party game developers, which don’t need to rely on an extra distributor on top of Apple’s iOS or Google’s Android platforms.
For the company itself, which is 300 employees strong, Puzzle & Dragons’ massive success has begged the question from rival developers — “What’s your secret? How’d you do it?”
But producer Daisuke Yamamoto could only say, actually half-seriously, “Listen to your wife.”
After being originally inspired by another Match-3 game called “Dungeon Raid,” he created a concept with more Dragonball-like art and a wizard-like theme.
Then he just listened to a lot of the improvements his wife wanted in the game.
Initially, it was just a team of four with him as the producer and other programmers and designers. It took a few days to develop the game, and then six and a half months until the company felt it was strong enough to go live.
Among the many changes his wife wanted: the ability to move a stone around the entire game board, instead of only one slot over at a time. She also wanted larger stones on the screen. He said that womens’ longer fingernails often get in the way of playing the game, so they need to be bigger to make the UI more player-friendly.
As the game grew into a cultural phenomenon, it kept taking GungHo’s servers down. The company started giving away virtual stones as an apology, giving rise to the word, ‘Wabishi,’ which is a combination of the Japanese words for ‘stone’ and ‘apology.’
He also said the company doesn’t internally focus on quantitative metrics that much, and instead relies on qualitative feedback from Twitter. That’s a pretty big difference from other freemium gaming companies, which focus on user funnels and retention rates over several days to a week to a month.
“Japanese people are really conservative. They don’t disclose their actual names,” said in an interview at Supercell’s Free Your Play event in Helsinki last week. “Because you can use a nickname on Twitter, it’s a much more effective way to listen than Facebook.”
As revenues ballooned, GungHo’s stock has gone on a rampage, growing from a valuation of just over $200 million a year ago to $14.4 billion today.
But Yamamoto says internally they try not to pay attention to the company’s soaring valuation. “We’re try not to focus on the stock prices. We just focus on creating games and that’s all we do,” he said.
He also said that even though GungHo is now worth more than longtime mobile gaming giants DeNA and GREE, they don’t intend to go for any kind of platform play.
“We’re pretty much not in favor of platforms like [DeNA's] Mobage and GREE. DeNA and GREE are IT companies. They are not gaming companies. All they focus on is how much revenue they will have,” he said. “But for us, we’re a gaming company. We emphasize game creatives. If all Japanese gaming companies started to focus on the creative side, it would be a really good move for the entire industry.”
He says to celebrate the game’s success so far, his team “just drank beer and ate pizza.”
He said his life hasn’t changed that much since the game became a massive hit. But he’s hoping that he can build out stronger branding for Puzzle & Dragons. “I’ve always wanted to do a game with good characters and IP [intellectual property],” he said.
So it wouldn’t be that surprising to see GungHo come out with merchandising and licensing deals akin to what we’ve seen with Angry Birds-maker Rovio or Cut The Rope-maker Zeptolab.
The company is also focused on improving localization for Western markets. Currently, the game seems to have done some basic translation work but the tutorials and art could probably be localized more. The company just announced a partnership with Finland’s Supercell to build in a bunch of exclusive in-game features that will appear in both Puzzle & Dragons and Clash of Clans.
“We’re not really satisfied,” Yamamoto said. “We’ve just been quiet so far, but we’ll be aggressive from now on.”
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