Tuesday, September 28, 2010

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Green Dot: The $2 Billion IPO You've Never Heard Of Top
There’s a good chance you’ve seen prepaid credit cards on the shelves at 7-11, Walmart, CVS, Rite Aid, Radio Shack or a variety of other retail outlets. Those cards are usually issued by Green Dot , a Los Angeles based startup that went public earlier this year and is worth over $2 billion. They allow people who normally can’t get credit cards – like teens and those with poor credit – a way to pay for things like the rest of us do, with a Visa or Mastercard. And people love them. The company made $64 million in profit in 2009 on sales of nearly $235 million. The company boasts over ten million customers. That isn’t what makes Green Dot special though. You have to hear the story of the ten year old company from founder and CEO Steve Streit and early investor/board member Michael Moritz from Sequoia Capital. There were ups and downs, many of them, over the years. And we’ll have both Streit and Moritz on stage this morning at TechCrunch Disrupt to talk about the good times, the bad times and, more recently, the exceptional times. A few notes about the company taken from an investor presentation during the IPO process: Green Dot began its life ten years ago at a small table in the bedroom of my home in Pasadena, California. The idea was to provide MasterCard and Visa debit cards to people who otherwise couldn't get a card from a traditional bank. Our first big innovation was creating a way for consumers to buy and fund a bank debit card right off the rack at a neighborhood store. The first card we ever sold was a so called "prepaid" MasterCard at a Rite Aid store in Loudoun County, Virginia. Now ten years later, Green Dot products are sold at roughly 50,000 retail stores coast to coast with a Green Dot location within a short walk of just about everyone. These locations along with our Green Dot website enabled us to acquire over 5 million new accounts and process over $7 billion in deposits to those accounts over the past 12 months. Our second big innovation was in 2004 when we created the first "cash reload network" where any prepaid card issuer- including our competitors- could have their customers go to a Green Dot retailer to load money onto their prepaid debit card. Today, over 100 prepaid card programs rely on our "Green Dot Network" for reloading cash- with over 25 million reload transactions sold over the last 12 months. Our third innovation, developed along the way to serve our expanding business, is our Green Planet technology platform that today serves as the "operating system" for how regulated bank issued debit cards are purchased, activated and reloaded at retail stores. This is one of the companies that Mortiz is most proud of. He’s been with them since the early days and put $10 million or so into the company. Total investments from others accounted for another $8.5 million, and Sequoia invested additional cash to buy out some of those early investors. By the time Green Dot began the IPO process Sequoia Capital owned over 30% of the company. It netted up to 35.2% at the closing of the IPO. Sequoia has never sold a single share in Green Dot, before or after the IPO. So what’s that investment worth now? Roughly 35% of $2.1 billion in highly liquid public company common stock. By my count that’s about $700,000,000 in gain from a $10 million investment (plus another $10 or so put in to buy out other shareholders over time. That’s a 35x on $20 million investment. That is what the big boys in Silicon Valley call a big fucking home run deal. You may be familiar with other Moritz/Sequoia deals recently – Flip selling to Cisco for $590 million or so. And Zappos being acquired by Amazon for nearly $1 billion. Those deals, which most VCs would kill for, don’t get Moritz out of bed in the morning. He expects every single company he works with to go for the big score – an IPO and a life an an independent public company. Zappos and Flip didn’t make it over the hump. Green Dot, by God, did. Laws of awesomeness ensure that founders with the right level of intelligence, risk tolerance and patience can stay the course and get over the IPO hump. These are the companies that will forge the future of Silicon Valley and help spawn countless new startups down the road. We celebrate Green Dot and we celebrate Sequoia Capital for taking an idea and running with it, patiently, until they became a $2 billion company. We, too, were too busy breaking news about Google’s most recent $15 million acquisition of meto.com, or whatever, to even notice what Green Dot was doing down there in the glitzier part of our state. Shame on us – this company is providing a low cost solution for people unable to get credit cards to be able to participate more easily in our economy. It’s a good thing. Tune in around 9:30 am later today (Tuesday) to watch me interview Mike and Steve at TechCrunch Disrupt. You can watch the live stream here . It will be a rare treat to hear Moritz himself, a Silicon Valley legend, talk about how he helps companies through good times and bad, not selling a single share until well past the IPO. To put it another way, getting the chance to listen to Moritz talk about how he does what he does is like being able to watch Michael Jordan play baskedball with you, one on one. You’ll want to be there as he dunks the ball hard a few feet over your head. CrunchBase Information Green Dot Corporation Information provided by CrunchBase
 
Apple Has Already Approved The Official Google Voice App For iPhone, Expect It Soon Top
The App Store review office at 1 Infinite Loop has officially frozen over: we’ve gotten word that the official Google Voice application is on its way to the iPhone in the next few weeks. In fact, we’ve heard from a source close to Google that it’s already been approved — Google just needs to revamp the application to work with the iPhone 4 and iOS’s multitasking capabilities. If you’re a Google Voice user and you’re on an iPhone, this is great news. It’s been a long, long road to get here. Last July, we broke the news that Apple had blocked the official Google Voice application, which eventually sparked an FCC inquiry into the matter. Apple claimed that the application “duplicated existing functionality”, which didn’t do much to convince anyone as it subsequently accepted similar apps. Nothing happened for well over a year , and the odds of Google Voice ever making its way to the iPhone, at least as a native application, seemed bleak. Everything changed on September 9 , when Apple published a set of guidelines telling developers which applications would not be allowed into the App Store — and none of the rules seemed to apply to Google Voice. Rumors started swirling that third-party Google Voice apps might soon make their way to the App Store, and sure enough, a handful of applications have since been approved . But the existing applications, nice as they may be, are all provided by third parties. We haven’t gotten the chance to use the official Google application, but it’s possible that it will include functionality that the others don’t. Namely, push notifications for inbound SMS and voicemail messages (Google doesn’t provide an API for these, so third parties would have to route these messages through their own servers to offer push notifications). Reached for comment about the upcoming iPhone application, Google offered this non-answer of a statement: “We currently offer Google Voice mobile apps for Blackberry and Android, and we offer an HTML5 web app for the iPhone. We have nothing further to announce at this time.” CrunchBase Information Google Voice App Store Information provided by CrunchBase
 
Opzi: A Quora For The Enterprise Top
Within businesses, employees can share information over email, and through collaboration platforms like Yammer, Salesforce’s Chatter and others. But Q&A platforms like Quora have recently taken off as a centralized knowledge repository for a vast number of topics that is easily searchable. Today at TechCrunch Disrupt, Opzi is launching a Q&A platform designed specially for businesses. Opzi, which was incubated at Y Combinator , is essentially a white-label Q&A site that any organization can use internally to store questions and answers about their business processes. The site was founded by 25-year old Euwyn Poon , who graduated from Cornell University at the age of 18 and then received a J.D. from Cornell Law School in 2007. Poon worked as an associate in a law firm after school and found that it was difficult to sort through knowledge and instructions from his fellow associates online. Poon says that a Q&A-like site for business information within a company could help fill this gap and increase efficiency within an organization. Similar to Yammer, users sign in with their corporate email address and can then search for information by keyword. You can also ask questions, and answer directly from the platform. There are a variety of uses cases for the platform. For example, an engineering firm could use the platform as a way to sort through commands. And because most companies are tied to email as a main communication platforms, questions and answers can be distributed and answered by email as well. You can also post questions anonymously, and follow questions to receive updates to certain queries. Unlike a wiki, all the content on the platform is organized around the questions. Opzi is also working on ways to route questions to certain users if they could be experts in answering the question. Opzi charges for the platform via a per seat licensing model. Even in stealth, Poon has already raised $1 million in funding from an impressive roster of angels, including SV Angel, First Round Capital, Naval Ravikant, Jeff Clavier's SoftTech VC, Hadi Partovi, Ali Partovi, Paul Buchheit, Fritz Lanman and Raymond Tonsing. Q&A: Chi-Hua Chien, Keith Rabois, Sandya Venkatachalam and Lior Zorea weigh in on Opzi: KR: WHat’s the value proposition for the first user at the company? EP: It can work for only two users as a communication platform or a reference point. We want to build something that feels like a consumer software but is for the enterprise. CC: One of the things that impresses me about Quora is the density of the network. Here it will be smaller groups-need a lot of participation? EP: We’re not trying to compete with Quora; were just trying to add a centralized knowledge base within businesses. We are looking at organic growth but open to whatever makes sense. SV: Our approach is to build a layer on top of a company. This a light and easy way to add that layer. And it can integrate with other silos of information. KR: What about Yammer? EP: Yammer seems to be trying to build a social network for the enterprise. This is more of a knowledge base. SV: This would compete for time spent on email, Yammer and other communication platforms. LZ: How do you get the word out? EP: Here, today. CC: I think the biggest issue is that some companies want to have their classified information on servers. CrunchBase Information Opzi Information provided by CrunchBase
 
SeqCentral Puts DNA Sequence Crunching In The Cloud Top
The act of DNA sequencing results in massive amounts of data around the human genome. Currently, this data is housed in standalone super computers, which doesn’t allow for collaboration between scientists. SeqCentral is launching at TechCrunch Disrupt today as a way for human genome scientists to match their data with publicly available data sets. SeqCentral offers highly-scalable genetic sequence alignment in the cloud. The service allows you to upload your sequencing data in the clouds, and then compare your data with other scientists genome sequencing on the platform. SeqCentral will allow scientists to compare their data to others to see if their sequencing is new or if it is “known.” The startup will bring in public data from universities, research organizations, and companies and allow you compare your sequencing to this existing data. And SeqCentral, which costs $99 per year for scientists, wants to help you do more than just be able to find additional data, but also aims to connect members of the genomics community, encouraging collaboration around sequencing. Q&A: Chi-Hua Chien, Keith Rabois, Sandya Venkatachalam and Lior Zorea weigh in on SeqCentral: LZ: What’s the market for this? SC: There’s a big market of individual scientists who will use this. Market is around 1 million individual scientists. SV: What’s the value proposition for the scientists? SC: Scientists will be able to do analysis more easily. The amount of time it will take to produce results will be significantly less. CC: I think the company with the most data will win. There are a bunch of players in this space. SC: There are few other players, but we believe we’ve simplified it. CrunchBase Information SeqCentral Information provided by CrunchBase
 
Namesake Is The Match.com For Professional Opportunities Top
We’ve written about Namesake, a stealthy startup founded by former MySpace execs Dan Gould and Brian Norgard, that aims to match opportunities with people in your network. Today, Namesake is launching its professional community at TechCrunch Disrupt. Namesake, which aims to create a better way to match and route opportunities that come across your desk everyday, is part LinkedIn, part Twitter, and part Facebook. You essentially create a network on the platform by importing your Twitter and Facebook contacts (the sites doesn’t allow integration with LinkedIn contacts yet). You can then post jobs, recommend people for opportunities, connect people with each other and more. Gould says that traditional search doesn’t work for professional match making opportunities, which is why Namesake can fill a gap in the market. You can get real-time opportunities routed to you from people you trust on the network, recommend others for jobs, endorse people as experts in certain subjects, post jobs and more. You can send messages to specific people in your network or route an opportunity outside your network. And you can simply post and update on what your working on professionally, similar to the way you would post this on Twitter, Facebook or LinkedIn. Gould and Norgard sold their company Newroo to MySpace in 2006 and also founded Ad.ly, an in-stream advertising network for Facebook, Twitter and MySpace. Q&A: Chi-Hua Chien, Keith Rabois, Sandya Venkatachalam and Lior Zorea weigh in on NameSake: CC: How do you compete with LinkedIn? DG: We are trying to blend the value that LinkedIn, Facebook and Twitter provides in one platform. SV: How do you make money? DG: Performance matching (people only pay if the match was consummated on NameSake); premium subscriptions and Premium advertising will be key. We can offer highly targeted advertising. SV: But I’m not sure I would want people to sell my private information for ad keywords. KR: Who is this optimized for? BN: This is built for someone who is building out their community. LZ: Why would I come to Namesake if LinkedIn solves this problem? BN: We are wrapping structure around your professional and social network, to route opportunities to Twitter, Facebook and more. DG: The Algorithm is a custom routing algorithm. CC: Job Search might be a hard place to start as opposed to perhaps expertise. LZ: Perhaps you could work with enterprise CRMs. KR: What’s your benchmark for a vibrant community? BN: I think it’s about engagement; whether it be on other networks. CrunchBase Information Namesake Information provided by CrunchBase
 
CloudFlare Wants To Be A CDN For The Masses (And Takes Five Minutes To Set Up) Top
It’s no secret that performance can play a significant factor in a website’s success — keep your users waiting, and they’ll get impatient and head somewhere else. There are solutions available to help keep things speedy, like CDNs, but most smaller websites don’t use them. TechCrunch Disrupt finalist CloudFlare wants to bring these speedy load times to the masses, and it’s offering some other benefits too, including robust security protection against online threats.  CEO Matthew Prince says that, in short, CloudFlare takes your average web admin and terms them into a full-fledged Ops team. Prince says that speed issues can have a big impact on your site — one study showed that for every 100 milliseconds of time spent loading, you lose up to 2% of your visitors. He says CloudFlare offers an average of a 30% increase in speed and can “stop virtually all web spam attacks”. And he says that you can integrate it into your site in around five minutes. Oh, and it’s free, at least for its basic service. Prince says that CloudFlare operates on the network level, so it supports any platform. Setup involves changing your DNS to route to CloudFlare’s servers. After setting up CloudFlare on your site, you can head to a control panel that shows how many data requests have been served to users, and how much bandwidth CloudFlare has saved for you. It also makes it easy to drop in Google Analytics CloudFlare will also be offering a ‘Pro’ plan, with added features like SSL, better page optimization, and object pre-fetching to further enhance speed gains. The company has set up five data centers across three continents. It’s been in private beta until now, and has been tested on 1,000 websites that have served 6 million unique visitors. Q&A: Chi-Hua Chien, Keith Rabois, Sandya Venkatachalam and Lior Zorea weigh in on CloudFlare: SV: It’s a great idea, and you articulated the value proposition well. How do you make money? MP: We have a pro plan where users are charged for usage. CC: Seems like a great value proposition. MP: We think we’re on to something really big. At South By Southwest, they used CloudFlare. We think individual sign ups will help drive traffic but the real opportunity could be with hosting companies. KR: How does the technology work? MP: We use a technology from Cisco called AnyCast. LZ: What’s the difference between the free and paid service? MP: The pro service has a more advanced security, with realtime lookups. CrunchBase Information CloudFlare Information provided by CrunchBase
 

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