The latest from TechCrunch
- RunKeeper Adds New Integration To Its Health Graph In Hopes Of Building 'The Facebook Of Fitness'
- The Math of TechCrunch, Part 2: Does It Play Favorites?
- Why Google Health Really Failed—It's About The Money
- Skype's Worthless Employee Stock Option Plan: Here's Why They Did It
- Fly Or Die: How Color Became The Ishtar Of iPhone Apps
| RunKeeper Adds New Integration To Its Health Graph In Hopes Of Building 'The Facebook Of Fitness' | Top |
| You may have heard about the social graph and the interest graph, but what about the health graph? Thanks to RunKeeper , this term may soon become an oft-used part of your vocabulary. RunKeeper, for those unfamiliar, was founded three years ago as a simple iPhone app and a small online fitness community designed to help runners and other fitness enthusiasts employ smartphone technology to better track, measure, and improve their fitness. Since then, RunKeeper has expanded across mobile platforms, growing into a community of 6 million strong. Over the years, the startup has integrated with various gadgets and accessories, like a WiFi body scale tracker, sleep monitoring devices, and heart rate transmitters — all as part of an effort to give people a unified resource to aggregate the various health and fitness services, devices, and apps they use on a daily basis — before blasting this information out to friends, family, and competitors over various social channels. All the while, the startup has quietly been building a “correlation engine”, because simply aggregating fitness and health data from a few devices wasn’t enough — RunKeeper users had been clamoring for a way to make sense of all this data. And so, the “Health Graph” was born to do just that. But what is this “Health Graph”, exactly? RunKeeper CEO Jason Jacobs Imagine wants you to “imagine a system that can identify correlations between a user's eating habits, workout schedule, social interactions and more”, that has the sole purpose of delivering an “ecosystem of health and fitness apps, websites, and sensor devices that really work, based on a user's own historical health and fitness data”. But what’s a good health graph without an open API, am I right? Two weeks ago, RunKeeper announced that it was opening up its health graph to third party developers, so that these outside parties can tap into the users’ FitnessFeeds, which are basically akin to Facebook wall feeds, to build cool clients and apps, a la Facebook and Twitter clients. FourSquare, Zeo, Withings, Polar, Wahoo, and BodyMedia were among RunKeeper’s early launch partners, and this week RunKeeper announced three additional partners: Swimsense , an advanced monitor that allows swimmers to track performance information, distance data, etc., Earndit , which lets users earn points and collect trophies during workouts that can be redeemed for rewards, and Runstar , an Android app that enables users to track their running progress and share results with friends. While it may seem counterintuitive for RunKeeper to be partnering with sites like Runstar, which ostensibly offers a competitive service, Jacobs said that the ultimate goal of building a robust and open framework for the fitness community is more important than nominal competition. Though RunKeeper has raised $1.5 million to date, Jacobs recently told Wired that the company hasn’t touched any of that money, focusing squarely on scaling. And scaling they have, as RunKeeper has more than doubled its user base since November. And though the app was originally selling for $10 on the app store, and selling quite well, Jacobs and team have declared that the RunKeeper app will be permanently free. Now, I may not be the fittest guy on the block — I prefer to get my heart rate up by thinking about when the next big IPO is coming and by consuming large quantities of coffee — but that doesn’t mean I can’t appreciate a good fitness idea when I see one. The ambitiousness of RunKeeper’s open Health graph and API, along with a free app, fitness feeds, and the ability to compare metrics in FitnessReports, share achievements with friends — and the fact that any time one uses an integrated device or app, the corresponding data posts both on the third party’s site and RunKeeper’s feeds — all makes for one terrific service. And with Google Health recently closing its doors , RunKeeper has one less Goliath to worry about during its quest to aggregate the world’s health information. Developers that would like to learn more about the Health Graph API should check out the landing page here . CrunchBase Information Runkeeper Information provided by CrunchBase | |
| The Math of TechCrunch, Part 2: Does It Play Favorites? | Top |
| Editor’s note : Previously, in “The Math of TechCrunch, Part I: Is TechCrunch Still About Startups?” guest author Mark Goldenson analyzed more than 20,000 TechCrunch stories to find out how much we actually cover startups versus big companies. In this post, he drills down by investors, authors, and market segments. Goldenson is CEO of Breakthrough.com , a startup that helps people find a therapist and get online counseling. His email is mark@breakthrough.com . In my last post, we learned that TechCrunch now covers ten times more startups than in its first year, but over half its coverage is now on large companies. In this post, I look at how the coverage breaks down by investors, authors, and markets. These findings are based on the CrunchBase API and TechCrunch's 23,547 stories on 6,308 companies from June 11 th , 2005 to May 11 th , 2011. Here is what I found. 1. Companies funded by a prominent investors get covered twice as much Investors often pitch that their value is more than money. Among the 2,596 covered companies with investor data in CrunchBase, there is support for this: Rank Investor Startups Covered 1 Y Combinator 121 2 Sequoia Capital 103 3 Accel Partners 102 4 First Round Capital 93 5 Draper Fisher Jurvetson 87 6 Ron Conway 80 7 Benchmark Capital 70 8 Intel capital 70 9 Kleiner Perkins 70 10 Index Ventures 70 11 New Enterprise Associates 62 12 Charles River Ventures 57 13 Bessemer Venture Partners 55 14 DAG Ventures 54 15 Founders Fund 52 16 Greylock 51 17 Redpoint Ventures 51 18 True Ventures 50 19 500 startups 50 20 SV Angel 49 Companies backed by these top 20 investors get an average of 2.3 more stories than companies backed by other investors. Though Y Combinator benefits from making more investments than most firms, its halo effect is especially strong: YC has 20% more companies covered than Sequoia. Yet, the amount of money raised does not increase coverage: Top 10 Most Covered Top 10 Most Funded Company Total raised Stories Company Total raised Stories Google $25,100,000 3069 Clearwire $5,620,000,000 5 Facebook $2,335,700,000 1961 Facebook $2,335,700,000 1961 Twitter $360,166,000 1675 DeNA $2,208,000,000 15 Apple 1656 Solyndra $1,643,200,000 1 Microsoft 1007 Terra-Gen Power $1,200,000,000 1 Yahoo 912 Groupon $1,137,000,000 172 Android 563 Sirius $1,055,750,000 4 MySpace 494 Fisker $1,018,000,000 1 YouTube $11,500,000 448 AOL $1,003,000,000 327 Only one of the most covered companies – Facebook – is also one of the most funded. When all covered companies are graphed against their funding, the R-squared value that measures the correlation between coverage and funding is only 0.04 out of 1, indicating that the amount of funding does not strongly affect coverage. (Funding of Apple , Microsoft , and several other top companies was not readily available but reportedly less than a billion dollars. This does not include public financing from IPOs; because CrunchBase has hundreds of public companies that are rarely covered, the results would probably not be significantly different.) 2. TechCrunch writers do play favorites Over its six years, TechCrunch has quintupled its number of writers. These are the most prolific writers over time (some no longer work at TechCrunch): Writer Stories Michael Arrington 4079 Erick Schonfeld 3076 Leena Rao 2705 MG Siegler 2649 Robin Wauters 2502 Jason Kincaid 2261 Duncan Riley 838 Alexia Tsotsis 827 Mark Hendrickson 479 Nick Gonzalez 344 TechCrunch readers sometimes complain that writers favor certain companies. Does the data support this? Somewhat. All TechCrunch writers publish the most stories about the same ten or so large companies, with one story often covering multiple companies. Within these top companies, some writers do have favorites, and one data point stands out: two-thirds of MG Siegler's posts are about Google, Apple, and Twitter. MG covers Twitter twice as much and Apple three | |
| Why Google Health Really Failed—It's About The Money | Top |
| Editor's note : This guest post was written by Dave Chase, the CEO of Avado.com , a health technology company that was a TechCrunch Disrupt finalist . Previously he was a management consultant for Accenture's healthcare practice and was the founder of Microsoft's Health business. You can follow him on Twitter @chasedave. As reported on TechCrunch, Google shut down its medical records and health data platform . Since then, there’s been a lot of bits spilled offering explanations, but they all missed the most critical item. Money. Or in the language of healthcare—Reimbursement. I explain more below regarding why Google Health was doomed to fail in light of the legacy reimbursement model. First, let’s recap some of the explanations offered up so far. These are all valid but miss the biggest point. Adam Bosworth, who originally ran Google Health gave one reason: It’s Not Social . That’s true if one wants to create a weight management program or is simply interested in fitness-minded folks. Clearly that is important given the obesity epidemic, however there’s vast swaths of healthcare where being “social” isn’t appropriate or applicable in a doctor-patient relationship. In other words, being social is necessary but not sufficient to transform healthcare. In the comments of TechCrunch’s original article reporting the shutdown, I gave my immediate take… It's tough, even for big companies, to focus on a bunch of different things. I'm sure they could have figured out how to be successful if it was as strategically important as Search or Chrome or Android or Social…but they have bigger fish to fry. The Health space is a very difficult one. In many ways, it's counter-intuitive for those who haven't been in the arena from both the healthcare provider and consumer perspective. As much as there's a massive consumer-empowerment movement, in order to get ongoing and broad adoption of something in healthcare, one needs to lead with the clinicians. If you are interested in more, I’ve written about this here . One of the better analyses was done by John Moore of Chilmark Research . Few consumers are interested in a digital filing cabinet for their records. What they are interested in is what that data can do for them. Can it help them better manage their health and/or the health of a loved one? Will it help them make appointments? Will it save them money on their health insurance bill, their next doctor visit? Can it help them automatically get a prescription refill? These are the basics that the vast majority of consumers want addressed first and Google Health was unable to deliver on any of these. As much as we’d like to think it isn’t the case, the fundamental driver of most (not all) behavior in healthcare is the reimbursement scheme. As I described in an earlier piece on the “ Do it Yourself Health Reform ” movement, I spent much of my time as a consultant in the Patient Accounting departments of heatlhcare providers. The legacy reimbursement scheme can only be described as a Gordian Knot designed by Rube Goldberg. I expanded on the insidious effects of the reimbursement model in the U.S. in my overview of The Most Important Important Organization in Silicon Valley No One Has Heard About . For those who would like to be optimistic about the reimbursement model changing, read about Health Insurance’s Bunker Buster . In the meantime, it’s critical to understand the current reimbursement model to understand why Google Health failed to transform the landscape. To understand the impact, I’ll exaggerate to make a point— your healthcare provider doesn’t care about you unless they can see the whites of your eyes . Why is that? Today’s flawed reimbursement scheme only compensates the healthcare provider for a face to face visit. It’s hard to fault the primary care physician who has been put on a hamster wheel of 30-40 appointments per day and can’t even give their practice away upon retirement (that was once their retirement plan) for not wanting to deal with their patients sending email or sharing information from their personal health record. Interestingly, in the transformative models I describe below, doctors consistently tell me that half to two-thirds of their patient interaction time doesn’t need to be face-to-face. They can deliver high quality medicine without being in the same room as them. Yet, the fee-for-service model causes this country to waste mountains of time waiting to get appointments and then in the waiting room in order to facilitate the face-to-face appointment. The problem for a company like Google or Microsoft is their success is measured in the tens of millions. Those kinds of numbers are only present in the legacy reimbursement model. Frankly, Google could have done all the right things, but if the reimbursement model doesn’t change Personal Health Records will remain irrelevant for most healthcare providers. At best, we’re seeing Electronic Health Record vendors release so-called Patient Portals that are often driven more by a marketing objective than a clinical objective. Further, they are flawed in that they are a one-way broadcast of the silo’ed information from only one healthcare provider. Is there any hope for individuals to be more involved in the healthcare system as Personal Health Records promised? After all, it’s clear that healthcare works best and costs least when the patient/individual is a partner in their care with their healthcare provider. Fortunately, I believe that we’re seeing the first waves of a tsunami lapping the shore. It’s what I call the P.A.C. Tsunami. Patient-centered, Accountability and Coordinated. Today’s flawed fee-for-service reimbursement system is essentially the opposite of those three elements creating all the wrong incentives. In its place, we’re seeing the first waves. Both the Do-it-Yourself Health Reform movement and the government-driven health reform are creating incentives for what are called a Patient Centered Medical Home (PCMH) and Accountable Care Organizations (ACO). We are already seeing dramatic success with the first editions of PCMHs in the models such as MedLion that were highlighted in The Most Important Important Organization in Silicon Valley No One Has Heard About article. ACOs have the right goals in mind but remain like Unicorns—fantastical beings no one has seen yet and have been described as stupefyingly complex in their design. In contrast, one can’t help but be optimistic when studying the results of PCMHs such as 40-80% reductions in the most expensive facets of healthcare (surgical, specialist & ER visits) or a pilot program in Ohio with Medicaid diabetics that scaled could save Ohio $500 million annually. Or consider the case of Denmark that was the first country to broadly adopt the PCMH model. It’s been so successful, they have reduced the number of hospitals in that country by over 50% as they simply don’t need that many hospitals anymore. What does this mean for the tech community? I’d posit that as mobile technologies have fundamentally reshaped voice and data, there’ll be an equally radical transformation of healthcare. Just as legacy telcos had to fundamentally transform themselves or they’d be an artifact of history, so too will healthcare organizations transform (or die). With the transformed healthcare ecosystem, there are requirements for entirely new categories of software that a new generation of startups will develop. Exciting times indeed. Image credit: Colin Dunn | |
| Skype's Worthless Employee Stock Option Plan: Here's Why They Did It | Top |
| Skype is being criticized for terminating employees immediately prior to the closing of the Microsoft acquisition, and people are assuming they’re doing this to keep the value of those employees stock options. Skype’s response boils down to saying that the employees were fired because they weren’t good employees, and that the value of the stock is negligible and didn’t affect the decision making process. Ok. But it gets worse. Employees aren’t even able to keep the vested portion of their stock options. The vast majority of stock options granted to startups have a vesting period, typically four years, with chunks of those options becoming vested during that four year (or whatever) period. If options are vested you can exercise them, pay for the stock and own that stock. At least that’s the way things have been done over the decades. Skype did things differently. With Skype stock options the company has the right to not only terminate unvested options, but also vested ones. And any vested options that you’ve exercised (meaning you paid cash for them) that were turned into actual shares could simply be bought back by the company at the price you paid, regardless of their current value. Here’s the relevant language in the stock option grant agreement. It refers to a Management Partnership agreement which isn’t public and it’s unclear if employees ever get to see it (my guess is not): If, in connection with the termination of a Participant’s Employment, the Ordinary Shares issued to such Participant pursuant to the exercise of the Option or issuable to such Participant pursuant to any portion of the Option that is then vested are to be repurchased, the Participant shall be required to exercise his or her vested Option and any Ordinary Shares issued in connection with such exercise shall be subject to the repurchase and other provisions in the Management Partnership agreement. And here’s the letter the employee received when he was terminated: CNN calls the language “intentionally incomprehensible.” Reuters agrees, adding that Skype is “evil.” Here’s What’s Going On This isn’t the first time I’ve seen a stock option plan like this. I actually worked for a company once that used the same mechanism. I dug up the clause from that agreement, which I kept because it was so audacious. Here’s the relevant clause – it says much the same as the Skype documents but in slightly more understandable language: Where, in the case of an Employee Participant, Executive Participant or a Consultant Participant, an Optionee's employment, term of office or consultant agreement is terminated for any reason, such Optionee shall immediately offer to sell to the Company all of the Common Shares owned by the Optionee which have been or may be issued to the Optionee upon the exercise of Options at a price equal to the Exercise Price of such Common Shares. Such offer will be irrevocable until the day that is 120 days from the Termination Date. The Company shall have the option (but not the obligation) to purchase such Common Shares. If the offer to sell Common Shares is accepted by the Company, the Company shall purchase such Common Shares for cash consideration. Until now that company I worked for long ago was the only example of this type of clawback provision that I’d ever heard of. The reason that company added that clause is that they didn’t want any outside shareholders, including ex-employees. If there was a liquidity event, fine, employees got the stock upside. But if they left or were fired before a liquidity event, they got nothing. There are only two real reasons for doing this. The first is that the company anticipates a long period of being privately held and doesn’t want to deal with outside shareholders. The second is that they don’t want to give away too much equity in stock options. Since they can take back the options of anyone who leaves, they can give equity more freely to employees coming on board. There’s a tradeoff, of course. If employees understand what they’re signing they will want a lot more compensation to work there – either a higher cash salary or a ton more options. Because they know the likelihood of payout is so small. If, for example, Facebook’s option plan was structured this way. all the early guys that left and founded companies like Quora and Asana would not have made any money at all (billions of dollars in value would have flowed back to Facebook). Multi-billionaire Sean Parker , who was president of Facebook for a time, wouldn’t be a multi-billionaire. Or any other kind of billionaire. The fact that Skype adopted this plan in the first place isn’t in itself “evil.” But they’ve done two things wrong from what I can tell. First it appears that employees had no idea what they were signing and they probably expected it would be a normal stock option type deal that everyone in Silicon Valley has done for decades. If Skype wasn’t crystal clear with them, and explained it in normal human language that they understood, then these employees were intentionally misled. Skype had an incentive to make things unclear, because employees would demand far more compensation if they had understood. The fact that employees are so surprised that this is happening suggests that they didn’t understand the agreement. This is what lawyers call fraud. The second thing Skype did wrong was not to waive this clause with the looming acquisition. The company can deny all day long that they fired these employees for cause, not to save a few dollars on stock options. But the appearance is the exact opposite. These employees should simply hire a lawyer to sue Skype. There’s a valid fraud claim based on what I’m seeing, and the “atmospherics” (how lawyers describe the legally irrelevant facts surrounding the story that can nonetheless influence a judge and jury) are terrible for Skype. Also, Skype has to wrap up this deal. My guess is they’d just settle immediately and pay out on the vested part of the stock options. Get Ready For More Of This I bet that dozens of lawyers, venture capitalists and CEOs, now that they’re aware of this, are thinking “Hmmm, not a bad idea. We should do that.” And as long as they are crystal clear in their communications with new employees that these stock options, which are already a long shot, are likely to be extra-worthless, they’re probably in the clear legally. Then it’s up to the employees to take a stand. Or not. CrunchBase Information Skype Information provided by CrunchBase | |
| Fly Or Die: How Color Became The Ishtar Of iPhone Apps | Top |
| Ever since Color launched its photo sharing app, the $41 million startup has been having a rough time. John Biggs and I reviewed it on Fly or Die back in March, when CEO Bill Nguyen joined us to defend the app ( you can watch that episode below, we both gave it a “die”). The company continues to struggle, so we decided to revisit our assessment in the new episode above. Things don’t seem to be getting much better for the company. Nobody is using the app . Co-founder Peter Pham left , or was fired, according to CEO Bill Nguyen, who also told the New York Times that the company is going back to the drawing board. It might scrap its photo app altogether in favor of, well, something big and vague. According to the NYT article: Mr. Nguyen outlined an ambitious plan to compete with Apple, Google and Facebook by tying together group messaging, recommendations and local search, all while making money through advertising. Okay. Good luck with that. Their first idea didn’t work. It happens. At least they still have a lot of money left to try something else. We’ve analyzed this from every angle by now. But how many do-overs do they get? Can they overcome such a spectacularly bad launch? Or is Color doomed to become the Ishtar of iPhone apps? Watch more episodes of Fly or Die here . CrunchBase Information Color Labs Information provided by CrunchBase | |
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