Tag Archives: Startups

Turntable.fm Co-Founder Billy Chasen Explains the Art of Pivoting

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“Pivot” is sometimes viewed as a dirty word in the tech world, but for Billy Chasen, the willingness to switch from one project to the next has proven to be key to his success.

Chasen, the co-founder and CEO of Turntable.fm, learned to shift gears and abandon projects when necessary. In 2008, he unveiled an app called Firefly that let users live chat with one another and see the cursors of those looking at the same webpage. The app got some buzz, but didn’t gain the kind of traction Chasen wanted, so he decided to take the web data he gathered with the tool and turn it into an analytics company called Chartbeat, which is still used by many organizations today.

Then, in 2010, Chasen launched Stickybits, an app that let users scan the barcodes of physical objects and attach digital messages to them. It was a novel idea at the time, and one that also received a seven-figure funding deal and a good amount of attention in the media, but according to Chasen, the technology just wasn’t there to support it. So, he and his co-founder Seth Goldstein made the decision to pivot to a new company, Turntable.fm, a music discovery service where users can stream songs and hang out in virtual chat rooms.

He even pivoted back in college, originally planning to major in astronomy at the University of Michigan before choosing computer science instead.

Finding new ideas to work on has never been Chasen’s problem. He has a broad range of interests — just consider that he paints and does glass blowing on the side while running his music startup — and keeps a list of hundreds of ideas for things he wants to build. Still, he admits that “it’s incredibly stressful” to pivot from one project or company to another. The trick, he says, is being scientific about the decision.

“What I’ve always tried to do at every point along the way is be as objective as possible and look at the pros and cons and see where I am,” Chasen said in an interview with Mashable. “I try not to make decisions based on the amount of work I’ve put into something or the amount of love I’ve put into something, and instead pull myself back and look at the usage and make the best decision going forward on how to evolve.”

We chatted with Chasen about his thoughts on pivoting, some of his earliest business ideas, whether we’ll ever see Stickybits 2.0 and what he’d like to work on after Turntable.fm.

Q&A With Billy Chasen, Co-Founder of Turntable.fm

Did you always dream of starting your own company one day, or had you not planned on doing it?

It’s never been that I’ve been interested in startups as much as I’ve always been interested in building and creating things, and it just so happened that that’s one of the main aspects of startups. I’ve always just enjoyed building things, whether it be artistic things or websites. It’s always been this need or desire. I’ve been building things ever since I was a kid.

You first made a splash in the tech world in 2006 with Swarmthe.com, a site that let users see which websites others were browsing in real time. Were there any projects you tried to get off the ground before this?

After graduating college [in 2003], I was working with a group of friends trying to create a photo hosting service before there were any mature hosting services, but it didn’t really go anywhere. During college, there were all types of ideas for websites. It was just as social networks were starting. I had a few ideas with some friends about how we could potentially leverage the people you know to do some utility-based things. One of the things we were talking about at one point in college was trying to have a network of people connected to each other who could really post anything, like a work of art or writing, and have people critique it.

One of the more cutting edge projects you’ve been involved with is Stickybits, which gave users a way to overlay digital information on the physical world. Why did you decide to abandon Stickybits for Turntable, and will we ever see a Stickybits 2.0?

It just felt like [Stickybits] got to a place where usage wasn’t there, but people loved the idea, and that wasn’t enough. The decision was, do we bunker down, do we love it so much that we will hold until the technology is there to support the idea, or do we work on something else because we are talented and there are other ideas?

I don’t know if I’ll necessarily be in the position to start it up again, but it will be in some form or fashion started. If Apple decides to put Near Field Communication on all of their phones, and all of the sudden all these brands decide to become NFC-aware, and you are just able to get information from them, there will be startups built entirely in that space. Or maybe there is some successor to NFC that is even more interesting and better to differentiate objects. It’s my belief that it is going to come. I don’t know if I will be leading the charge on that — probably not, because I tried it a little earlier and I have another company to run.

You’ve clearly pivoted multiple times in your career. What is your thought process when weighing whether to pivot from one project to another?

It’s incredibly stressful. It’s easy to look in hindsight and see they were the right decisions at the time. If we did the pivot from Firefly to Chartbeat and Chartbeat failed in six months, it would be a different hindsight. You make the best decision you can. What I’ve always tried to do at every point along the way is be as objective as possible and look at the pros and cons and see where I am. I try not to make decisions based on the amount of work I’ve put into something or the amount of love I’ve put into something and instead pull myself back and look at the usage and make the best decision going forward on how to evolve.

No startup that I’ve ever started or been a part of has ever been a perfectly direct path. It’s always pulled in certain directions, and the better you are at reading those directions, the more successful you will be.

So when you originally brainstormed the idea for Turntable.fm, what was the problem you were hoping to solve?

The problem was that music used to be social. Music is social in an offline context: when you go to concerts, when you hang out with people. Music is a very social thing. We have drum circles. We hang out together. We trade music with each other. That’s been music history for a long time. And nothing online feels like a digital representation of what we do in the real world. I wanted to create this digital space where you can listen to music real-time with people.

Your company recently launched a new app called Piki, which essentially transforms the Turntable experience into more of a traditional radio app. What is the goal with this app compared to Turntable?

Piki is continuing to fill the void of how I discover new music. There is a big void right now. [Music] services — whether it’s Spotify playlists or Rdio — are not designed to pick up the tastemakers that I enjoy and let the music come to me. Piki is trying to angle towards that.

What project do you see yourself working on next?

Even though it’s such a dense space, I still feel there’s lots of issues with the way photo-sharing is done, and I think it could be done better. I have some thoughts on that and also, social interactions between people and what’s the best way to do that. I like the idea of App.net, where they basically say, “You pay us a subscription, our commitment is to you and not our advertisers.” It’s another area that can be worked on quite a bit.

Clearly, you have plenty of ideas that you’d still like to work on. Any chance you’ll go the route of Jack Dorsey or Elon Musk and try running multiple companies at once?

I would love to be the type that could juggle multiple companies at the same time, but it’s hard for me to do because I dive so deeply into the product that I am on at the time. If I was more a laid-back CEO who made sure I had all the right people at the company and then basically delegate most of the daily operations, I could do something like that, but it hasn’t been the way that I’ve generally been operating. The only thing that takes me from a full-time project to another full-time project is something happens, for better or worse.

Images courtesy of Billy Chasen and Turntable.fm

Read more: http://mashable.com/2012/12/20/turntable-billy-chasen/

Watch This Magazine Cover Transform Into an Interactive Game

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The cover of ShortList, a weekly men’s magazine in the UK, took on a uniquely interactive quality this week thanks to Blippar.

Using Blippar’s augmented reality app for iPhone or Android devices, readers can scan the arcade game-style art on the cover to bring a fully playable version to life on their phones, as shown in the video above. Elsewhere in the issue, readers can use the app to pull up extra slideshows, vote in polls, take quizzes and more.

Blippar, a UK-based startup that set up its first U.S. office in Manhattan earlier this year, has been making increasingly frequent appearances in ads and even the cover of Justin Bieber’s last big album release, Believe. Meanwhile, augmented reality and other 2D-code-activated applications are being integrated into a broader array of magazine titles, including Allure, The Atlantic, Elle and Esquire.

Read more: http://mashable.com/2012/11/09/magazine-interactive-game-cover/

40+ Events in 3D Printing, Entertainment Tech and More

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Mashable‘s Events Board is a great place to find the leading conferences in your industry — whether that’s advertising, technology, media or public relations. This week, we’re highlighting five events that we think can help move your career forward. Our picks below include events in New York, Chicago and London. If you don’t find something that’s a fit for you, you can check out more than 40 events in our complete listings.

On the Events Board, you can sort listings by date added, get discount codes for Mashable readers and, in some cases, watch a video of a past event so you can know what to expect. You can also follow our events account on Twitter so you’ll catch the best events before they sell out.


Inside Bitcoins
Date: July 30
Location: New Yorker, New York City

Virtual currencies are taking off, as platform and processing systems become more reliable and traditional merchants begin to adopt new forms of payment. The Inside Bitcoins conference and expo on July 30 will explore key issues including the future of currency, FinTech business trends, investment strategies and opportunities, and more. The program is designed to provide an overview of where the virtual currency industry is today and what business opportunities are on the horizon.


Inside 3D Printing Conference & Expo
Date: July 10 – July 11
Location: McCormick Place Convention Center, Chicago

Inside 3D Printing Conference & Expo has rapidly become the B2B tradeshow for the 3D printing industry. The recent New York City conference attracted more than 3,000 attendees and had significant 3D printing organizations as exhibitors, including 3D Systems, MakerBot, and Stratasys. The summer edition, programmed by Hod Lipson, takes place in Chicago. The program is geared to provide attendees with a strong foundation and understanding of where the 3D printing industry is today and what business opportunities are on the horizon.


Augmented Reality Summit (AR Summit)
Date: June 20
Location: Altitude London, London

Now in its 3rd year, the AR Summit, a one day conference & expo is set to return in 2013, providing a unique insight into the capabilities, innovations, successes and future direction of AR. This platform is designed to bring together the industry advocates, leading technology providers and innovative companies/brands looking to discover, explore and embrace the concepts AR brings.


Content Summit for PR, Social Media and Marketing Professionals
Date: June 24 – June 26
Location: Gleacher Center, Chicago

Master the most critical element in PR and marketing today: Content. 17 speakers will discuss the ROI of developing irresistible content, and how to get your staff excited about writing narratives that help employees and customers solve problems and share knowledge.

Mashable readers save $200 by using the code MASH12.


Entertainment Technology in the Internet Age
Date: June 18 – June 19
Location: Stanford Graduate School of Business, Knight Management Center, Stanford

Through a series of panel discussions and presentations, with ample opportunity for audience participation, the ETIA conference will examine topics within the areas of Internet-focused content creation, distribution, and monetization, as well as technical tools and solutions for shaping the user experience.



Visit our full list of upcoming conferences and events here.

Want to promote your event on Mashable‘s Events Board? Submit it here.

Image via Mario Tama/Getty Images

Read more: http://mashable.com/2013/05/30/events-3d-printing-entertainment/

How to Double the Power of Solar Panels

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In an attempt to further drop the cost of solar power, Bandgap Engineering, a startup in Woburn, Mass., is developing a nanowire-based solar cell that could eventually generate twice as much power as conventional solar cells.

That’s a long-term project, but meanwhile the company is about to start selling a simpler version of the technology, using silicon nanowires that can improve the performance and lower the cost of conventional silicon solar cells. Bandgap says its nanowires, which can be built using existing manufacturing tools, boost the power output of solar cells by increasing the amount of light the cells can absorb.

Right now most solar-panel manufacturers aren’t building new factories because the market for their product is glutted. But if market conditions improve and manufacturers do start building, they’ll be able to introduce larger changes to production lines. In that case the Bandgap technology could make it possible to change solar cells more significantly.

For example, by increasing light absorption, it could allow manufacturers to use far thinner wafers of silicon, reducing the largest part of a solar cell’s cost. It could also enable manufacturers to use copper wires instead of more expensive silver wires to collect charge from the solar panels.

These changes could lead to solar panels that convert more than 20% of the energy in sunlight into electricity (compared with about 15% for most solar cells now) yet cost only $1 per watt to produce and install, says Richard Chleboski, Bandgap’s CEO. (Solar installations cost a few dollars per watt now, depending on their size and type.) Over the operating lifetime of the system, costs would come to $0.06-0.10 per kilowatt-hour.

That’s still higher than the current cost of natural-gas power in the United States, which is about $0.04 per kilowatt-hour. But it’s low enough to secure solar power a substantial market in many parts of the world where energy costs can be higher, or in certain niche markets in the United States.

Meanwhile, Bandgap is pursuing technology that could someday improve efficiency enough to allow solar power to compete widely with fossil fuels. Double the efficiency of solar cells without greatly increasing manufacturing costs, and you substantially lower the cost per watt of solar panels and halve the cost of installation — currently the biggest expense in solar power — by making it possible to get the same amount of power out of half as many cells.

Both the cells Bandgap is about to introduce and the cells it hopes to produce in the long term are based on the idea of minimizing the energy loss that typically occurs when light passes through a solar cell unabsorbed or when certain wavelengths of light are absorbed but don’t have enough energy to dislodge electrons to create electricity. (That energy is wasted as heat.) In a conventional solar cell, at least two-thirds of the energy in sunlight is wasted — usually much more.

The company’s existing technology makes use of the fact that when light encounters the nanowires, it’s refracted in a way that causes it to bounce around in the solar cell rather than simply moving through it or bouncing off it. That increases its chances of being absorbed.

But what Bandgap ultimately wants to do is to change the way light is converted to electricity inside the cell. If the nanowires can be made uniformly enough, and if they can be formed in such a way that their atoms line up along certain planes, the tiny structures could change the electronic properties of silicon.

These changes could allow solar cells to generate electricity from low-energy light that normally produces only heat, says Marcie Black, the company’s founder and chief technology officer. It does this in part by providing a way to combine energy from more than one photon of low-energy light.

The technology could take many years to develop. For one thing, it requires very precise control over the properties of each of millions of nanowires. Also, the techniques needed to make the solar cells might not be cheap or reliable enough to produce them on a large scale. But such solar cells could theoretically convert 60% of the energy in sunlight into electricity. That will be hard to achieve in practice, so the company is aiming at a more modest 38% efficiency, which is still more than twice that of typical silicon solar cells made now.

Researchers are taking several other approaches to producing very high-efficiency solar cells, such as using quantum dots or combining several kinds of materials.

The nanowire technology could be simpler, however. “In theory, the approach has many potential advantages, but you’ve got to get it to work,” says Andrew Norman, a senior researcher at the National Renewable Energy Laboratory in Golden, Colo.

Bandgap hasn’t yet built solar cells using the approach it hopes to pursue in the long term, but it’s made indirect measurements showing that its nanowires can change the electronic properties of silicon. “This is still in the research phase,” Black says. “We’re being very honest with investors — there’s still a lot of work to do.”

This article originally published at MIT Technology Review
here

Read more: http://mashable.com/2012/10/17/double-power-solar-panels/

Explore HBO’s ‘Silicon Valley’ at Mashable House SXSWi

Mashable and HBO are teaming up to create an immersive experience based on HBO’s new show Silicon Valley.

Located in the Mashable House, the Silicon Valley Lounge draws inspiration from Hooli, a fictional Internet giant featured in the show. The lounge will feature a juice bar with fresh juice from Daily Greens, charging stations to juice your phone, nap pods and show paraphernalia.

Silicon Valley is a satire of startup culture, by Mike Judge, creator of Beavis & Butt-Head and Office Space. The show follows a hacker named Richard who’s trying make it big in the tech world with a program he created. During his humorous journey he lives in incubators, deals with fanatical venture capitalists and navigates the Silicon Valley lifestyle.

The Mashable House will also feature a wrecking ball for selfies, Grumpy Cat, a mobile art gallery and a secret Easter egg. From one-of-a-kind photo opps to immersive experiences, the Mashable House is sure to be a hot spot at SXSWi.

Silicon Valley will air on April 6 on HBO.

Follow @MashableEvents for Mashable SXSWi updates.

Event Details:

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Mashable House
Dates: March 7-9
Time: 11 a.m.-5 p.m. daily
Location: 305 E 5th St, Austin, TX 78701
Eventbrite: RSVP
Hashtag: #MashSXSW

Read more: http://mashable.com/2014/03/04/mashable-house-silicon-valley-hbo/

Bitcoin Millionaires Become Investing Angels

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Early investors in Bitcoin got rich. Now they are the cryptocurrency’s most powerful gatekeepers.

Every time you spend bitcoins to buy a drink at Evr, a swanky bar in midtown Manhattan that accepts the digital currency, you make its co-owner, Charlie Shrem, a little bit richer.

And that’s not only because a chamomile sour costs $17 (or 0.16 bitcoins). It’s because whenever someone new uses bitcoins, the electronic currency’s value tends to increase. Shrem has bought thousands of bitcoins for about $20 each, starting in 2011. Since then, the digital coins have soared in value to $109.

That’s turned the 23-year-old into a millionaire and into one of a handful of early bitcoin investors who’ve decided to sink their windfalls back into the bitcoin economy — starting their own companies and investing in others.

“Infrastructure is what we need,” says Shrem. “We’ve gotta build, build, build — financial software, exchanges and different payment products.” In addition to his investment in the bar, Shrem founded Bitinstant, a company that makes it possible to buy bitcoins at Kmart and 7-Eleven, and is a member of BitAngels, an investment group created this year to help Bitcoin startups evolve from garage operations into real companies.

Bitcoin angels like Shrem don’t have pockets nearly as deep as entrepreneur-turned-investors who’ve made it big in Silicon Valley — some of whom, like Steve Case and Vinod Khosla, have net worth in excess of $1 billion. But their influence is substantial. As conventional investors begin to show interest in Bitcoin startups, it is small-time tycoons like Shrem who are acting as gatekeepers and ambassadors.

“The early guys are the ones that run everything,” says Shrem. “In this space, how long you’ve been around matters.”

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Bitcoin originated in 2009, when its source code was posted online by persons unknown. Despite its mysterious origins, the way it works is transparent: The currency is produced when people carry out difficult cryptographic operations on computers, and then it’s exchanged over an open-source peer-to-peer network. Bitcoins are immune to counterfeiting and don’t rely on any central authority. Image courtesy of Bitcoin Charts

Initially, Bitcoin was mostly a curiosity. Among the first businesses to accept it were gambling sites, narcotics delivery services and a farm selling alpaca socks. Yet Shrem and others have been thinking strategically, creating companies that comply with the law and intend to make Bitcoin a widely used form of money.

One reason to do so is that the number of bitcoins is limited; there’s a theoretical maximum of 21 million, and 11.3 million have been “mined” so far. That means the more people buy and use bitcoins, the greater their value becomes. Anthony Gallippi, CEO of Bitpay, an Atlanta company that helps online stores accept payment in bitcoins, says one reason early buyers are reinvesting in the technology is to “ensure future returns” on the currency’s value.

“You didn’t get that dynamic in the dot-com days,” says Gallippi, who claims that he and business partner Stephen Pair are sitting on “thousands” of bitcoins they purchased for $1 or $2. He reasons that anyone who now buys even one bitcoin is in effect betting “on the whole space.”

The easy windfalls earned by Bitcoin’s early promoters are attracting interest from mainstream venture capitalists. In May, Shrem’s company received $1.5 million from the investment firm of the Winklevoss twins (who famously sued Mark Zuckerberg over the idea behind Facebook). Also last month, the venture fund operated by Peter Thiel, Facebook’s first major investor, invested $3 million in Gallippi’s company.

Those deals have been important endorsements for the online currency (see “Big-Name Investors Back Effort to Build a Better Bitcoin”). Yet what they mean for the philosophy at the heart of Bitcoin isn’t as clear, says Roger Ver, an important early investor.The 34-year-old electronics entrepreneur says he sank his life savings into the currency and has used the gains to invest more than $1 million in more than a dozen Bitcoin startups, including Shrem’s. “The typical investment size has been around $100K USD,” Ver wrote in an e-mail from Tokyo, where he lives. “I’m motivated by the positive ways in which Bitcoin use being widespread will make the world a better place.”

Like many early enthusiasts, Ver, who once ran for the California senate and later spent 10 months in prison for selling fireworks on eBay, was attracted to Bitcoin because of his libertarian, antigovernment views. He believes such currencies, if they replaced national ones, could make it impossible for governments to “finance their wars” by printing money.

With mainstream investors arriving, Ver says, the Bitcoin economy could become a lot less idealistic. Yet these new investors may be unwittingly boosting the political and economic implications of the decentralized currency, not just its face value. “I don’t think they fully understand how revolutionary Bitcoin will be,” he says.

Composite by Mashable, images courtesy of Bitcoin and Vyacheslav Argenberg/Flickr

This article originally published at MIT Technology Review
here

Read more: http://mashable.com/2013/06/13/bitcoin-angel-investors/

Randi Zuckerberg: Stop Being the Crazy Cat Lady and Other Facebook Don’ts

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Randi Zuckerberg — Internet entrepreneur and sister of Mark — discussed during a conference in Australia things not to do on Facebook, from bragging about your accomplishments and taking pictures of food to posting about your cats.

According to the Melbourne-based Herald Sun, Zuckerberg offered tips on what people should avoid doing on social media sites that could prevent them from growing their networks. Also on her list: posting cheesy motivational posters, humble bragging and depressing messages about being tired, sick or stuck in traffic.

Zuckerberg is the former chief marketing officer at Facebook, but left the company last August to pursue other projects. She is an executive producer for Silicon Valley, a Bravo reality TV show that follows inspiring entrepreneurs in the tech industry.

Hinting at sibling rivalry, Randi told conference attendees that she was reluctant to join Facebook in its early start up days. Her brother even sought help from their mother to help convince her to join.

“I graduated from Harvard University in 2003 and the only reason that I mention that is that I have a sibling who did not graduate. So I always have to take that one,” she said.

Randi and Mark aren’t the only Zuckerbergs in tech. Their youngest sibling Arielle is now a Google employee, following a recent acquisition the search engine giant made of Wildfire Interactive, a social media management company.

As for what not to do on Facebook, Mashable also recently compiled a list of things that annoy us the most on the site. Check out the gallery below and let us know what you think your Facebook friends should stop posting.

Image via Facebook

BONUS: 20 Things Your Most Annoying Friends Do on Facebook

Can Crowdsourcing Resurrect Unused Patents?

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Some crowdsourcing competitions, like the X-Prize, ask people to come up with technological solutions to a problem. Marblar, a startup launching this month, is doing it backward—asking people to come up with problems that a given technology could solve.

Cofounded by three PhD students in the U.K., Marblar is a platform that aims to help universities commercialize new inventions and resurrect dusty old patents. The company is working with about half a dozen U.K. research institutions, such as the Medical Research Council and Imperial College London, to seed its website with discoveries. These range from a novel form of foam to a new kind of oxygen sensor to a probe that can drill into hard surfaces in new ways.

The crowd is assigned the task of finding market applications for such inventions. Marblar is cultivating a base of knowledgeable users who would just love to submit ideas in exchange for a cash prize (from hundreds to thousands of dollars), points on the site (marbles), and of course, bragging rights.

“There’s a massive pile of unused innovation that just isn’t going anywhere,” says CEO Daniel Perez, who estimates that 95 percent of patents filed by universities never make it to the marketplace. University technology transfer officers and, often, researchers themselves can’t know all of the potential applications for a discovery, he says. “There are too few voices in that conversation.”

Marblar has already had one success story, during a beta testing period this spring with a 4,500 person listserv. University of Southampton chemical biologist Tom Brown had found a way, called DNA click ligation, to glue together strands of DNA without using an enzyme. It was a neat trick but had no straightforward use, says Perez.

IP Group, a British venture capital firm that invests in university innovation, sponsored a prize as part of a Marblar competition. The winning entry was from a Cambridge University PhD student studying nucleotide drug delivery who believed the invention could advance his field. The idea is now being turned into a proof-of-concept prototype (Brown’s lab is advertising a job opening to help), and IP Group is evaluating the possibility of creating a spin-out company. The venture firm also has made a roughly $600,000 investment in Marblar itself.

The startup’s efforts fall in line with broader long-term efforts to speed the commercialization of innovation from universities, which is effectively the return on investments of taxpayer dollars. In the U.S., in fiscal year 2011, universities and research institutes received $40 billion in federal R&D funds, according to the Association of University Technology Managers. The organization’s survey results show that 670 startups and 591 new commercial products came out of U.S. universities and research institutes during this time.

Lita Nelsen, director of MIT’s Technology Licensing Office, says that Marblar looks like it would be a useful tool in a few cases she sees each year, but that it would be unlikely to dramatically increase the number of ideas that get commercialized. Most research discoveries, such as a treatment for a disease, do have a straightforward use, and a lack of ideas is far from the only reason why a university patent might never get licensed or make it to the market, she says. Marblar “is not going to revolutionize university technology licensing, but it may make a useful contribution,” she says.   

This article originally published at MIT Technology Review
here

Read more: http://mashable.com/2012/09/13/can-crowdsourcing-resurrect-unused-patents/

Micro-Lending Is an Alternative to Payday Small Business Loans

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Image: Mashable Composite, Getty Creative, Kathy Konkle

Every day, 10% of Claudia Diniz’s sales disappear. Opportunity Fund, a nonprofit lender, siphons off the money and treats it as payment on a $35,000 loan Diniz used to stock the shelves of her Los Gatos, Calif., clothing store. Diniz, 37, loves how easy the process is. “We have months that we sell and months that we struggle,” she says. “So I say, when I sell well I pay more — and when I’m struggling I pay less.”

Opportunity Fund developed the EasyPay loan in order to serve businesses who don’t qualify for regular term loans. The organization also hopes the loan will prevent entrepreneurs from turning to merchant cash advances, a similar but much more expensive form of credit. “It’s just ridiculous, how much money they pay,” Diniz says of friends who are paying off cash advances from private companies.

Although she’s never had to resort to high-interest loans or merchant cash advances, Diniz knows what it’s like to be desperate for credit. She decided to open a store after her son was born, figuring that owning her own business would allow her to control her hours. Envisioning a rival to Lululemon Athletica, an upscale chain, Diniz — who is originally from Brazil — called her store Viva O Sol Brazilian Fitness & Fashion.

“It was five years ago. The market crashed, people were losing stocks and houses, and everybody in my town was closing their doors,” Diniz says of other retailers. She needed a loan, but after the financial crisis, banks were much warier about lending, especially to brand-new businesses. A retired business adviser in town recommended she contact Opportunity Fund, one of the largest micro-lenders in the state.

Opportunity Fund has provided micro-loans (from $2,600 to $10,000) and small-business loans (from $10,000 to $100,000) to California entrepreneurs for the past 20 years. The average small-business owner who works with the organization has an annual household income of just $22,000. Clients own dry cleaners and restaurants, trucking companies, and daycare centers. Most are Latino or African-American, and many are recent immigrants who don’t speak fluent English.

Diniz’s financials were strong enough that she qualified for a small-business loan right away. But many entrepreneurs who were coming to Opportunity Fund were unable to qualify for loans, even if they had strong sales. An entrepreneur might have a poor personal credit score, for example, or run a highly seasonal business, like a flower shop.

So the organization decided to create a loan that could be repaid through automatically deducting a small share of credit- and debit-card sales. The technology wasn’t new — it had long been used by merchant cash-advance providers. “The intention of EasyPay was: How can we look at this business a little differently? How can we give more weight to the cash flow side of the business?” says Alex Dang, a business development officer.

The automatic daily payments decrease the risk of lending considerably, allowing Opportunity Fund to serve more businesses and to extend larger loans than it would have otherwise. Established business owners, like Diniz, like the product because it’s convenient. EasyPay loans have a fixed interest rate of between 8.5 and 15 percent, typically have longer repayment terms than cash advances, and take a smaller share of sales — usually about 6 percent. Like payments on any other loan, payments contribute to a borrower’s credit score.

Opportunity Fund has lent $5 million through 250 EasyPay loans so far. (In February, Opportunity Fund was awarded a $50,000 grant from Wells Fargo, a sponsor of National Journal‘s Next America project.) Meanwhile, merchant cash-advance providers lend about $2 billion to small businesses nationwide each year, says Janinne Dall’Orto, senior manager at First Annapolis Consulting, a consulting firm that studies the payments industry. Merchant cash advances aren’t regulated, so there aren’t legal limits on the fees companies can charge. A typical $10,000 advance, due in six months, might carry a $3,500 fee.

One reason Opportunity Fund can afford to charge low rates is because it’s a nonprofit and a community-development financial institution, or CDFI: it’s partly supported by philanthropists and the government. It’s a lender out to charge borrowers what they can afford, not to deliver big profits. “One question that we ask every borrower is: What is a comfortable payment for you? And then we work around that,” Dang says of EasyPay loans.

In its bid to provide an alternative to merchant cash advances, Opportunity Fund is something of a David competing against a Goliath. The merchant cash-advance industry is expanding rapidly, fueled by private investment and demand from business owners like Diniz’s neighbors in Los Gatos. Dang says some of his clients report fielding repeated calls from marketers within the merchant cash-advance industry, and some have taken out several cash advances — a second to pay off a first.

But Mark Pinsky, president and CEO of the Opportunity Finance Network, a network of CDFI’s, says that EasyPay loans still have the potential to scale — through Opportunity Fund, other CDFI’s, or other kinds of lenders — and make an impact. “I think it’s going to put a lot of downward pressure on merchant advances,” he says. Savvy business owners always look for the best deal. In California right now, the best deal might be with Opportunity Fund.

This article originally published at National Journal
here

Read more: http://mashable.com/2014/06/27/manageable-small-business-loans/

Is Thin-Film Solar Dead?

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When the Chinese energy giant Hanergy decided last week to buy Miasole, a Silicon Valley-based thin-film solar company, at less than a tenth the amount venture capitalists had invested in the firm, it could have been making a savvy move. Though it seems as if thin-film solar panels have no hope of competing with conventional silicon ones under today’s market conditions, the technology might still have a strong future.

In recent years, the price of conventional silicon solar panels has fallen far faster than expected, and once-promising thin-film startups are going bankrupt, delaying manufacturing plans or being bought by Asian companies for pennies on the dollar. (In addition to Hanergy, TFG Radiant, SK Innovation, Taiwan Semiconductor and a few others have bought or taken large stakes in such companies.)

Some analysts think the companies that have been snatching up these bargains know what they’re doing. The poor market conditions that have kept thin-film companies from competing may not last: When demand increases and it comes time to start building solar-panel factories again, the argument goes, the technology might have a significant advantage, because for comparably sized plants, it could cost far less to build a new thin-film factory than a conventional one.

A gigawatt-scale thin-film plant would cost $350 to 450 million, versus $1 billion for a conventional silicon plant, says Travis Bradford, a professor at Columbia University’s school of international and public affairs and president of the Prometheus Institute for Sustainable Development, a nonprofit research firm. (The cost estimates will vary depending on what’s included in the plant. For example, if you add the cost of producing polysilicon, the equivalent to the raw materials that thin-film solar plants use, the capital cost for a silicon plant goes up to $2 billion or more, he says. But most plants buy silicon from large suppliers.)

So far, the companies with the potentially cheapest thin-film technology have built only relatively small factories that cost far more per watt than large ones, and building larger plants doesn’t make sense in the current market. (Solyndra, the failed thin-film company, was building a large plant, but it had notoriously expensive technology, including unusual tube-shaped solar panels. First Solar, by far the most successful thin-film company, has built large plants, but newer types of thin-film technologies may prove cheaper and more efficient.)

Startups can’t afford to wait until market conditions get better. But large companies like Hanergy might be able to bide their time until the market improves and then build a large plant that could compete with conventional silicon. “Hanergy spent $30 million to get Miasole,” Bradford says. “It will take them a few hundred million dollars to eventually build a large factory and launch the technology. But if they’re right, they’ve got assets that will be worth billions of dollars later. That’s the bet they’ve made.”

Waiting for market conditions to turn, however, is a risky strategy. The market is currently flooded with solar panels — current manufacturing capacity is more than enough to satisfy demand, and that’s driven down prices to the point that many manufacturers are selling at a loss. It’s not clear how long it will take for this situation to change.

Timing the construction of new thin-film factories will be difficult. In the meantime, manufacturers of conventional silicon technology continue to lower the cost of their solar panels and improve their efficiency. And there’s no guarantee that new thin-film panels will perform as expected when produced at a large scale — or that cost targets will be met.

One option could be for large companies to develop and build their own solar power plants. That’s the model used by First Solar, and it seems to be the model Hanergy is adopting.

But many analysts remain skeptical that thin film can compete with silicon, given silicon’s overwhelmingly larger scale of production. Thin film may have had a chance once, but it’s taken it too long to reach large-scale production and lower costs, according to Jenny Chase, manager of the Solar Insight Team at Bloomberg New Energy Finance. “That ship has sailed,” she says. She expects that thin-film companies might succeed only in niche markets, such as applications where very lightweight or flexible solar panels are needed.

This article originally published at MIT Technology Review
here

Read more: http://mashable.com/2012/10/10/thin-film-solar-dead/