Startups

Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil. Apple has a good deal of cash. And, in the Valley, the startup ecosystem — for many reasons — wants to see Apple spend that cash. As their cash pile continued to grow as their stock price and market cap soared, Apple’s inability to provide robust software services combined with opportunities to expand their reach through acquisitions has become a fancy parlor game which includes every stripe of public and private investor imaginable. On top of this, pumping even a small percentage of cash pile into acquisitions could provide another pool of much-needed liquidity for founders and investors alike. While it all makes sense on paper, part of what makes Apple “Apple” is that they operate how they want to — not how the market wants them to. Recently, in response to a variety of pressures to do something, to do anything, Apple announced a two-part share buyback. There are many explanations for this financial strategy, and while the Valley may have their own armchair financial analysts with a Twitter account, I reached out to some friends who actually work in technology banking or at techonology-focused hedge funds and asked them to send me a paragraph on their perception of the move. Because of the world these folks work in, I’ve reproduced their answers below anonymously, as they are not permitted to publicly share their opinions on such matters: Technology Investment Banker: With the amount of cash stock piled by Apple, and mainly overseas, it was only a matter of time until the water would break, especially with activist investor David Einhorn ruffling feathers. Apple did something very standard and not uncommon, but on a large scale the way Apple likes to do things. At the end of the day I feel Apple’s actions represent the following four points: (1) Increased Shareholder Value: There are many ways to value a profitable company but the most common measurement is Earnings Per Share (EPS). If earnings are flat but the number of outstanding shares decreases. . Voila! . . A magical increase in period-to-period EPS will result; (2) Higher Stock Prices: An increase in EPS will often alert investors that a stock is undervalued or has the potential for increasing in value. The most common result is an increase in demand and an upward movement in the price of a stock; (3) Increased Float – As the number of outstanding shares decreases, the shares remaining represent a larger percentage of the float. If demand increases and there is less supply, then fuel is added to a potential upward movement in the price of a stock; and (4) Excess Cash: Companies usually buy back their stock with excess cash. If a company has excess cash, then at a minimum you can bank that it doesn’t have a cash flow problem. More importantly, it signals that executives feel that cash re-invested in the corporation will get a better return than alternative investments. This is definitely a positive sign for the company going forward. Customers and investors should feel confident with these events transpiring that Apple will continue to deliver value to both parties respectively. Technology Hedge Fund Principal: Since Apple has around $150B cash on the books (70% of which is foreign), it’s clear they need to do something with this cash because it’s just wasted sitting on the balance sheet earning low interest rates. People have assumed the market would respond well to Apple making acquisitions, especially in software and services, particularly in cloud and mobile software. While they have reaped the benefits of profits in mobile hardware, the value going forward is at the application and services layer. Other hardware manufacturers are catching up, if they haven’t caught up already. Unfortunately, Apple doesn’t seem to have an appetite for these types of acquisitions. Another option is to buy back shares, a proven

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All the usual writing crew have abandoned me (what, it’s the weekend?). So instead of yelling at the staff and helping with the odd headline, I’ve actually got to do something useful around here. In other words, I’m going to write a few posts. But it’s also the weekend that Maker Faire happens in San Mateo, where I live. Now, I’m not much of a maker, but I do like to get my hands dirty. I’ve got a bunch of half-finished projects all over my house, including two half-finished cigar box guitars, an unfinished Drawdio kit, and an old Nintendo DS that I disassembled in an effort to replace its broken case and could never get to work right again. You might say I’m more of a breaker than a maker. But I love going to Maker Faire to see what other, more talented makers have come up with. So I’m going to make lemonade out of this pile of lemons known as the “weekend shift.” We’re going to make VentureBeat into a temporary makers-only zone just for today. Don’t worry, you’ll feel right at home here. Along with SaaS startups, iPhone apps, and photo-sharing sites, one thing that the technology world is discovering is that making hardware is a pretty good business after all. It’s easier than ever to make things. There’s a ton of information  online about how to make everything from sauerkraut to sensors. Hundreds of hackerspaces, as well as for-profit workshops like TechShop, make tools and knowhow available to anyone who wants to learn. And once you have a solid idea, electronics manufacturers (in China or even in Oregon) make it easier than ever to go into mass production. Somewhere between the self-driving couches, the flaming sculptures, and the Arduino-powered blinky light projects, I think we’ll catch a glimpse of the future of tech. Stay tuned. And if you don’t like maker day on VentureBeat, please send me smoke signal or drum signal stating, “I don’t like learning about people who make things, so I have disassembled my laptop, smartphone, and tablet and am living on a diet of nuts and berries.”   Filed under: Entrepreneur

Editor’s note: Glenn Solomon  is a partner with GGV Capital. Some of his recent investments include Pandora, Successfactors, Isilon, Domo, Square, Zendesk, Quinstreet, and Nimble Storage. He blogs regularly at www.goinglongblog.com, where the focus is on growth stage entrepreneurs who are thinking big. Follow him on Twitter @glennsolomon. Stanford-born and Seattle-based Tableau Software (DATA) enjoyed a tremendous debut on the public markets on Friday, closing on its first day of trading at over $50/share, up over 60 percent from its $31/share IPO price. The company raised over $250 million through the sale of approximately 14 percent of the company, and its enterprise value now sits at approximately $2.5 billion. For the pundits who’ve been arguing that the tech IPO landscape is in crisis, deals like Tableau serve as a powerful reminder that the public market is eager for certain tech companies. In fact, over the past year or so, there have been several other high-profile tech IPO winners, such as Workday, Splunk, Palo Alto Networks and ServiceNow. What lessons can aspiring tech entrepreneurs learn from Tableau and these other Wall Street success stories? Here are few. Stand Out In The Crowd Tableau has built a highly attractive business. Growth has been very strong – March quarter revenue growth was over 60 percent, to $40 million. The company is operating in a huge and proven market: The data analytics and visualization space has produced big winners across several software generations and remains interesting, as big data pushes the limits of existing solutions. Finally, Tableau has been able to show profits, albeit modest, as the company has grown rapidly. For all these reasons, public investors flocked to Tableau. If you’re considering an IPO for your company in the future, recognize that public fund managers have many companies from which to choose. More specifically, small-cap growth managers have between 500-1,000 companies in their universe. Given the enormity of this number, a typical manager will only follow 50-100 companies closely and, depending on strategy, will likely only invest in 25-50 of these in any one year. Tableau stands out in this sea of stock tickers. Does your company stand out? If not, what investments do you need to make to help you rise above the noise? Price Your Company Right Cynics will suggest that Tableau left money on the table. Since the stock popped over 60 percent on the first day of trading, the company clearly could have set its IPO price higher and raised more money. This misses the point. Tableau recognized that its IPO is a chance to establish a new shareholder base. By pricing the IPO at $31, the company surely had its pick of new investors since most everyone, seeing the obvious good deal, wanted to get in. I’m sure Tableau’s management team spent time evaluating who was most likely to hold their IPO stock and add to their ownership over time. If the company has done its job well, Tableau has stacked its shareholder list with the best, long-term oriented fund managers. This will serve the company well for years to come. You should spend time getting to know potential VC investors before you take money into your company. Consider prioritizing things like alignment of outlook and ability to help add value ahead of price. Taking the highest price limits dilution in the short-term, but if you add a VC who either can’t help or has a different vision than you for your company, you’ll likely regret the decision down the road. Patience Is An IPO Virtue Tableau deferred its IPO for several quarters. In fact, had it used a $100 million in revenue run rate as a threshold for IPO timing, as many others do, the company would have now been public for over a year. Because Tableau waited longer, the company was able to continue to invest in its business. With more time and investment likely came increased visibility and predictability, which is critical to performing as a public compan

Google is under fire in the UK for its tax practices in the country, and a new key witness (who spoke to The Sunday Times) might put them in deeper hot water when he hands over a reported 100,000 emails and documents to the British Revenue & Customs (HRMC) services. Barney Jones, a former Googler who was at the company between 2004 and 2006, says he has material proof that Google’s London sales staff which would negotiate and close sales for the UK market, despite claiming its Dublin HQ handled finalizing all deals. Jones was prompted to speak out by testimony given to the Commons Public Accounts Committee (PAC) last week by Google VP Matt Brittin, who said that London-based Google staff were never closing any ad sales deals, though some selling efforts were made there. Brittin had previously gone on record in November 2012 with statements asserting that no one in the London office was doing any kind of ad selling. The matter of where the deals were finalized is especially important because if a sale closes in London, it’s likely they’d be taxable in Britain, rather than in the extremely low tax-rated Ireland. Jones told the Sunday Times that Google is fully aware of this, yet there are still records of Google staff closing major deals from companies like eBay and Lloyds TSB, but Google doesn’t seem at all certain that any of the documentation will absolutely prove that it has done anything strictly against UK tax law, according to a statement provided by Google Direct of External Relations Peter Barron to the Sunday Times. “As we said in front of the public accounts committee, it is difficult to respond fully to documents we have not seen,” the statement reads. “These questions relate to Google’s business in the UK going back a decade or more. None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.” Google reiterated this statement to TechCrunch when we contacted them for comment. Ireland uses its lower corporate taxation rate, which is 12.5 percent, or a little over half of Britain’s 23 percent, to attract big names who base their European corporate headquarters there, including Apple and Facebook in addition to Google. The search giant is currently under fire from UK parliament members for its tax practices, thanks to a Reuters investigation that revealed statements it made last November to the PAC about its London operations may not have been entirely accurate. Amazon is next in the PAC’s sights for its UK tax practices, as Reuters has also recently uncovered evidence to suggest that it, too, is doing a lot of selling through an autonomous London-based unit, despite routing its sales on paper through a tax-exempt affiliate based in Luxembourg. In fact, for most on Google’s footing, avoiding taxes seems to be the exception, not the rule, and a recent piece by V3′s Madeline Bennett explains that even if this fresh round of hearings reveals that these schemes do run afoul of UK tax regulations, it’s unlikely we’ll see situations change all that dramatically. Governments are too dependent on the general economic benefits of hosting big corporations, and get too much out of awarding them contracts, she says, to risk doing long-term harm to those arrangements. Still, what Jones claims to have would be incredibly embarrassing for Google, especially if it spells out in no uncertain terms that closing deals was regularly handled by Google’s London staff, in direct contradiction to what Brittin has told the committee, but until we see the goods, there’s no telling how deep down the rabbit hole his information actually goes.

Editor’s note: Ross Rubin is principal analyst at Reticle Research and blogs at Techspressive. Each column looks at crowdfunded products that have either met or missed their funding goals. Follow him on Twitter @rossrubin. An ancient and once-sacred bond between author and audience, reading and writing have become but two more tasks along with a multitude of other things that we do on a host of digital devices — watcing videos, listening to music, playing games, and really anything except using Facebook Home. Still, there are some for whom the intimate act of interface between pen and paper retains more magic than all the electrons powering all the devices in the world have not been able to recreate. For them, a trio of European crowdfunding projects have trotted out a range of products to improve both endpoints of analog document creation. Whacked: LazyPete. Arrgh! Listen up, ye scurvy dogs, as I tell ye the legend of Lazy Pete, a pirate so wrapped up in his romance novels that he didn’t see a great white shark leap from the ocean to leave him with just one hand. ‘Tis in Lazy Pete’s honor that Philip Musche surely named his one-handed book reading contraption, which essentially puts one of those book stands that keep pages open on a beefy handle. Despite showing off the reading aid in nearly enough colors to cover the Seven Seas, Musche failed to capture enough crowdfunding booty, and the campaign ended with only £533 of the desired £30,000 treasure. Backed: Idae. What the GoPro is to most digital cameras, Idae is to most pocket journals, even the durable Field Notes. The waterproof, tear-resistant notebook is just the thing for when you need to make that critical addition to your grocery shopping list in the middle of your next scuba dive, and a perfect match for your Fisher Space Pen. And if you needed any more proof of just how extreme it is, it has a hole for a carabiner. That said, fire will consume it along with the haiku you were inspired to write on the slopes. And if you’re not planning to keep your notes around indefinitely, the notebook can be recycled. Developed in Milan and shipped to backers last month for between $20 and $30 depending on cover color, the 32-page thought preserver cleared its $7,200 funding goal with a couple of hundred dollars to spare, but you’d expect that kind of nail-biting excitement from such a tough guy. Backed: Meteor Grip. The pencil has been thin enough to serve as a benchmark against which to compare high-tech electronics. While it’s comfortable for many, at least for short periods, it can be difficult to grasp for some. Receiving inspiration when his partner Zoë, a tattoo artist, began suffering hand pain in December 2011, Pontefract, UK-based Jai Dickerson Pierce developed the Meteor Grip. Few details are provided about what material is used to create the grip. Rather, the key to its uniqueness is being available in both right and left-handed versions. As the campaign page employs double negatives to claim, “No other manufacturer produces an ergonomic hand grip that is not ambidextrous.” That said, the campaign is not above covering a spectrum of uses, claiming that the product is useful as a novelty gift while also proclaiming that it is “changing the writing experience forever.” Not yet changed for kiddies, though, as a potential meteorite grip is for now on the drawing board. With a bit over three weeks left to go, the Meteor Grip has collected about a quarter of its humble £875 goal. Seven pounds will marry your love of astronomy with hatred of thin writing tools, and ten pounds can get one for you as well as the cramping tattoo artist in your life as soon as this month.

Editor’s note: Richard Bennett is a Senior Fellow with the Information Technology and Innovation Foundation and co-author of ITIF’s 2013 report, “The Whole Picture: Where America’s Broadband Networks Really Stand.” Follow him on Twitter @iPolicy. We’ve all heard the story: America’s broadband networks are second-rate. We pay exorbitant prices for shoddy service because broadband providers print money and hold innovation in a death grip. While America languishes, our competitors in Europe and Asia are racing ahead to a user-generated content utopia. The only way forward is a government takeover, or, failing that, a massive dose of regulation. So go a number of recent treatises such as Susan Crawford’s “Captive Audience”; works by like-minded Internet aficionados Tim Wu, Lawrence Lessig, and Yochai Benkler; reports by public interest advocacy groups Free Press, Public Knowledge, and the Open Technology Institute; as well as numerous tech bloggers. The only problem with this story is that it’s almost completely untrue. Granted, as recently as the late aughts, the story was plausible: In those dark days, our rankings in terms of both broadband subscription growth and speeds were falling. Increased demand for data capacity and a technology lull combined to push our average Internet connection speed down to 22nd in the world at the end of 2009, according to Akamai’s measurement of “Average Connection Speed.” Since then, the speeds of such shared connections have nearly doubled from 3.9Mbps to 7.2 Mbps, raising the U.S. to eighth place. U.S. Average Connection Speed per Akamai Akamai’s Average Connection Speed measures individual TCP streams over IP addresses that are often shared — and doesn’t sum simultaneous streams — so it’s more a measure of usage than of network capacity, however. To see the capacity of the underlying broadband network, it’s best to look at Akamai’s “Average Peak Connection Speed” metric. The distinction between these two metrics flummoxed Ars Technica’s Cyrus Farivar, who maintains that the shared-connection measurement is the more meaningful indication of “user experience.” Farivar is clearly wrong about that, and Akamai’s “Average Peak Connection Speed” is the better indicator of network improvement. The Average Peak measurement shows performance in the U.S. tripling over the past five years, up to 31.5Mbps in Q4 2012. We don’t know where the U.S. ranked on this scale before mid-2010, but it’s currently 13th. The tripling of network capacity combined with a doubling of “shared speed” says that networks are getting faster, as the U.S. is simultaneously using them more heavily Average Peak Connection Speed per Akamai America’s broadband speeds are improving for two reasons: first, broadband providers have installed newer technologies, such as Verizon FiOS, DOCSIS 3 cable modems, and AT&T U-verse that are four or more times faster than the technologies they replaced; and second, users have begun to demonstrate a preference for higher-speed broadband by opting into higher-speed upgrades. Some upgrades are costly and others are not; Comcast recently doubled the speeds of most of their Bay Area broadband plans for free. While our networks are improving, we’re retaining low prices for entry-level broadband plans first noticed by the Berkman Center’s “Next Generation Connectivity” report: the U.S. is currently second in the price of broadband for entry-level users. The nation is also third in network-based competition, second in the fiber-optic installation rate, first in the adoption of next-generation LTE, ahead of Europe in broadband adoption, and doing quite well in Internet-based services. While U.S. cable TV companies still lead telcos in new broadband subscriptions, fiber-based telco broadband is gaining subscribers at a faster rate than cable. U.S. broadb

Mark Suster of Los Angeles’ GRP Partners is known for his unique insights on the tech and digital media worlds, having famously had success on “both sides of the table” as a repeat entrepreneur turned investor over more than a decade in the industry. And he hit headlines several times this past week, with his viewpoints on acqui-hires (he says they’re often very bad) and founders stepping down from the CEO role such as what happened with GRP portfolio startup Awe.sm (he says sometimes, it’s the best thing that can happen.) So when we heard that Suster was in San Francisco for a couple of days, we asked him to come by TechCrunch TV to talk a bit more at length about these concepts and much more. And while he warned us that he was a bit tired due to a late night visiting with industry folks here in the Bay Area the evening before we met, he was just as engaging as ever, talking about the topics mentioned above as well as the latest hot stuff coming out of the Southern California tech scene. Check it all out in the video embedded above.

How could we here at the FeedMyApp offices pass up the opportunity to review an app with a name as tasteful as this one. After all, is there anyone out there that can manage to refrain from offering a smile when someone even mentions the fart world. We are a strange race, that's for sure. Fart Guitar is actually a music application for iOS and Android that offers a new take on the grunge guitar sound. It lets you play your licks on your device with some of the wildest farting guitar sounds this side of the Black Keys. You can play all your favorite songs but with a particular down and dirty sound rather than the clean sounds of a normal guitar sound. Fart Guitar is a heap of free fun for those of us with a warped sense of humor. well, we've all heard of the phrase musical fruit,' i would guess. Fart Guitar is guaranteed to bring a laugh to you and your warped friends while you make music. This good looking app features flatulent notes as well as real guitar tones mixed in together and can be easily adjusted to make a true Hendrix like experience. Well, i might be exaggerating slightly there but it is certainly guaranteed to break the ice at parties. At the moment, the app offers chords in the key of G on an acoustic guitar but plenty of others are in the mix for future release. Electric guitar, with distortion, is the first of the updates and coming soon plus, there will also be other keys and effects. Dont think, by the way, that we are being served up shonky guitar sounds here either because all the guitar samples are provided by four-time Grammy nominated guitarist Andy Reiss and the fart samples are provided by renowned producer Karius Vega. There's absolutely nothing even vaguely highbrow about Fart Guitar, that's for sure. It's a simple guitar distortion effect that lets you play your notes on your Android or iPhone in exactly the same way you would play a normal smartphone guitar app. The big difference here, though,is the sound that comes out of it. It's big, it's fat, it's dirty but, thankfully, it isn't smelly. Personally I can see some enterprising new grunge band recording a whole album using it as a guitar effect. And, just in cae you are wondering, the grunge revival is literally just around the corner now that the '80's thing is finally about to end. fart Guitar is a fun music app to impress your friends with your new dirty guitar sound. Let's hope one of the upgrades that come isn't anything to like smellovision.

Do people still play real board games, I wonder. One thing's for sure, it's getting harder and harder to find a true toy store that sells these sort of games. The problem is, I guess, that with so many games now being transformed into games that can be played digitally there is a perception that if they ain't on your smartphone or tablet then they aren't worth playing. The introduction of the incredibly user-friendly iPad a few years back and the consequent rise of the tablet revolutionized the market even more and opened up all these games to a new technology geared audience. Choozwho is one of those such games. Do you remember playing a game called Guess Who when it introduced in the '80's. This fun and very entertaining free game is a two-player picture based guessing game where players take turns to identify the mystery celebrity orf rind that their opponent has picked by asking simple yes/no questions. ChoozWho is a modern take on the classic board game It is a two-player picture based guessing game, packed with the latest celebrities, where users pick a mystery face and have to take it in turns to try and work out who their opponent has picked. Users can play anonymously against other players or connect to their Facebook account and play against their friends. Earn virtual tokens from the games you win and collect and use then to unlock more features. To begin with, the user selects a card which their opponent will try to guess. If you play against a random player, you can choose a current celebrity or, if playing against a Facebook friend, you can pick from your mutual friends. Players then can ask each other yes/no questions in an attempt to eliminate some of the faces, until they feel confident enough to take a guess. You can select from the questions embedded in the game or make up their own specific questions. When you think you know your opponent's which card they can make a guess and the first player to correctly guess their opponent's card is the winner. The more games you win, the more tokens are earned and they can be exchanged for badges that can be used to give you advantages in winning the game. I remember playing Guess Who when I was younger and it was a whole heap of fun and, thankfully, ChoozWho loses nothing in entertainment value when translated into a digital format. While the celebrities format is a whole heap of fun though, the best use of this game is when playing against your Facebook friends where, instead of having Bradgelina or Posh and Beck to unravel, you can delve into the secrets of your family of mutual friends. You can even modify the appearance of your friends' faces with a hilarious range of props. ChoozWho is a great free time waster that reintroduces the classic board game to the digital world to give hours of entertainment for friends and family.