Big congrats to our Harvard undergrad team Side on their launch today!

Read more about them below, and better yet, head to the App Store to download their app for yourself!

sideapp:

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Perhaps my computer’s greatest attribute is its lack of opinion. This intrinsically unhuman objectivity is what allows me to have so much trust in my technology. I don’t have to worry if my alarm’s bad mood would cause it not to ring because it didn’t particularly like me today. My returned…

The seed is the new Series A, and the A the new B …

- Manu Kumar, Chief Firestarter, K9 Ventures

*Update: Manu Kumar point outs out that the Series Seed (http://seriesseed.com) documents are a good set of standard/open documents for doing an easy and inexpensive “fill-in-the-blanks” equity round. 

This week we were very fortunate to have four speakers come and talk to us about early stage startup fundraising:

As first-time founders, fundraising is something we hear about a lot but don’t really get the chance to “practice” until you decide to actually fundraise. And even then, this is your first time doing it compared to VCs and Angels who have done tens if not hundreds of deals by the time you talk to them. So this was the perfect opportunity to get a lot of practical advice from people who have been on both sides of the table:

"Do your homework" - Even if you just have an idea or a mockup, investors want to see that you’ve done your homework and can answer questions about the market and its potential. Also research what kind of deals the investor is looking for; most have it stated right on their website (K9 Ventures for example: http://www.k9ventures.com/about/).

Use standard term sheets - For seed stage fundraising, the only numbers you should really negotiate are the discount and the cap on a convertible note. Make it simple for yourself and just use YC’s vetted term sheets; they’re free and if you try to negotiate on other variables, you’ll likely end up doing yourself a disservice.

Try to fundraise as quickly as possible - When you’re fundraising, your mind is on fundraising and not growing the business (directly), so try to fundraise as quickly as possible and then get back to growing your business.

Use AngelList to fill out a round - AngelList is great when you have over half your round subscribed, but not so great when starting your round. Investors want to feel like they’re special and when the round is open to almost anyone, they don’t feel so special any more.

Be careful of party rounds - While it’s nice to get every big name investor you can in your round, it can come back to bite you because none of them are as dedicated to you or the company since they think ‘oh, one of the other 50 investors will take care of them’.

Fundraising is an art-form - In the end, there is no right or wrong way to fundraise and there’s often conflicting advice. Fundraising in itself is an art-form and can take many tries to get right, but in the process you are building a relationship with these investors and as long as you’re honest and thoughtful, that can always help you in your career.

- Kevin Xu, cofounder, FanHero

A few weeks ago we went on a San Francisco tour, where we visited Leap Motion as well as several other startup headquarters.

Our company, Splat, and Leap Motion both create devices that allow you to interact with computers in a physical way. Splat is like the Wii, but for your smartphone. It plugs into your phone’s audio jack and sends and receives infrared, allowing you to play interactive, real-life mobile games. Leap hooks up to your computer and enables you to control it through hand gestures. If Leap lets you control and visualize data like Tony Stark, then Splat lets you blast your friends like Iron Man.

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Splat has been ramping up to launch a Kickstarter in the future, and become a platform for a new type of social and interactive mobile gaming experience. We are often reminded, however, that it is difficult to attract both customers and developers concurrently as a platform: developers must want to create on it and consumers must understand what to do with it. Some investors and entrepreneurs advise to create one great product and to later develop it into a platform. We decided to learn from other hardware platforms and to test the assumptions ourselves.

Product or Platform?

Leap Motion launched their platform with confidence. With no Kickstarter, little customer testing and two years of technical development, they were able to release a video demo. Many were impressed by Leap’s demo, which displayed Leap’s hand gesture hardware platform and API.  

Leap’s strategy seems fruitful in hindsight, but it can be difficult to decide to create a wide platform vs. one killer application when creating a new technology. How does a company decide whether to embrace the platform or focus on one more narrow product? Here are a few questions to ask before deciding if you should go product or platform:

Are there abundant applications? Are they all convincing?

Does the technology have a variety of applications? How obvious are these applications to people and developers outside of your company? Can you spark people’s imaginations to create new experiences, and is it convincing enough that they want to actually go out and create those applications, especially if you do not yet have customers on the platform?

The “SFC” factor comes into play here as well. Is the product So Fu*king Cool that developers are drooling to make a variety of apps for it and customers are dying to get their hands on it? If not, then ask the next question.

Are there one or two killer applications?

If you tested each application on the product as the sole function of the device, would one of them seem like a stronger or easier product to sell?

If your product becomes more understandable to consumers or if your potential customers become more targeted, then focusing on that one application might be what it takes to get your first customers.

If you are isolating a large part of your potential audience by creating a sole product, like Leap would be if it marketed strictly as a gaming console, then a platform may be the correct path for you.

Do you feel compelled to make the platform?

Some technologies seem wrong to tame. A team is driven by a vision and they build their product around it. It can be disheartening to compromise on one’s vision because the market says to do it.

The hard realization is that while there may be several applications for a technology, the company might be better served by delaying their vision and focusing on one. The question really comes down to the goals of the company. Are you willing to create a narrower experience if it means a more obvious and affordable product, or does your technology have to be unleashed for the world to tinker with?

Splat’s Choice

The questions do not have obvious answers, and Splat is currently working to figure out some of them. We think our technology can enable a more fun gaming experience, and know lots of games and apps that could be developed with the device. To figure out if people feel the same way, we are currently beta testing our products. We created minigames to test which Splat activities people find the most fun. If they like many, then a platform may be our best approach. If one or two games stand out as clear favorites, fleshing out those games and creating Splat as a device specifically to play them may be a better option. 

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So far, people have responded very positively. Kids have a great time playing (as do adults), and parents have expressed pleasure in seeing their kids actually moving around instead of tethered to their living room couch.

If you’d like to help out, we are always looking for beta testers and to get people’s opinions. Give us feedback through our website at playsplat.com or drop us a line at chat@playsplat.com. If you are a developer, let us know if the idea intrigues you, if you have ideas for games, and if you want to work with us to create great games for a new type of mobile gaming!

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Recently we were lucky enough to have met with Imprivata’s CEO, Omar Hussain. Imprivata is a leading company in secure access and collaboration in the healthcare sector. Omar has had an interesting and varied career. He has never worked in the same industry twice and has successfully navigated Imprivata through two major changes of direction. Omar epitomized the classic image of a serial entrepreneur with a singular passion for building great companies. Offering plenty of good advice for young entrepreneurs, Omar’s charismatic delivery was that of a natural salesman. He was even kind enough to follow up afterwards over the phone.

Sales doesn’t always = traction

Omar was emphatic that as an early stage company you have to find the holy grail of product-market fit. The best way to do that is by using sales as a measuring stick. But he cautions to not mistake being a good sales person with product traction. Avoid questions that lead the witness and instead ask, “Why wouldn’t you use this product?” The more often a client’s ideal product sounds like what you are offering that’s when you are closing in on Petra.

Our experience at Skillbridge has been exactly that. We are building a platform where companies can cut their costs by accessing premier talent on an as-needed and fluid basis. We have shifted our sales calls from aggressively pushing our platform to giving clients the space to tell us about their pain points: too many short-term projects and a lack of time to screen piles of under-qualified resumes. By meticulously interviewing our customers we are learning to completely understand their needs. These conversations have even provided us tips such as which budget pool to target with their CFO and what conferences their competitors go to find related vendors.

Here are some of Omar’s suggestions for the questions you should be asking on your initial sales calls:    

What are the products/services [in your space] you most need?              

How often do you need them?

Why do you need them?

How do you try and get them today?

Why have you not been able to get what you want?

If you were able to find the product/service you want…

How would you like to access it? (e.g. hourly, per use etc.)

How would you like to purchase it? (e.g. directly over the web, through your IT department etc.)

If XYZ product existed what would prevent you from using it?

If you found a service/product that fulfilled your need where would you get the money to pay for it?

Develop a strong gut instinct and then have the courage to follow it

Omar also touched on something we’ve heard consistently from startup founders – follow your gut. Some see it as the brain’s ultimate self-adjusting pattern recognition system. Omar believes that following your gut is a skill that you develop and hone over time providing you a strong compass to guide decision making. Omar’s extensive career and ability to bring people with him on Imprivata’s winding and often unexpected journey is a testament to his ability to stand up and act on his convictions.

Blocking out the noise and focusing on the underlying truth was our biggest takeaway from the time spent with Omar: “You may be able to BS investors and BS customers but don’t ever BS yourself.” We at Skillbridge are taking Omar’s advice to heart.

Recently, we had the privilege of visiting not one but two different sites on the Google Campus. Our first stop was the Wildfire Headquarters to meet with the CEO and Co-founder (and a Summer@Highland alum!) Victoria Ransom.

Victoria’s story was, in a word, fascinating. Her business started with a desire for more “adult-like” traveling programs abroad that she herself would benefit from. Wildfire itself spun out of a tool that they built to help publicize the travel business. Perhaps what impressed us most about Victoria was how open-minded and spontaneous she was able to be in her career while still following a carefully planned path to success. She was innovative and spontaneous enough to, for example, hire her lead sales guy off of craigslist and outsource part of her software development while still moving around the world and building a company that was so lean and impressive that it was profitable within the first few months. Victoria truly embodied how quick on your feet an entrepreneur must be. At Wildfire, we learned that while there really is no standard secret formula to success, building a product that solves your own problems and finding people you love to work with (in Victoria’s case, even marry!) are definitely two important steps in the right direction.

As we begin to launch our own company (called Side – check it out in the app store here), we will definitely keep Victoria’s flexibility in mind. While marrying each other may not be in the cards, we know that we will receive plenty of user feedback to which we will have to quickly adapt. Our early signs of adapting can be seen in the multiple name changes we’ve undergone – you’ll be happy to know that ‘Side’ is here to stay. Moreover, as a small company of just a few 19-year-olds, we understand now more than ever how important a service like Wildfire really is. We truly believe that we have built a great (albeit first version) product in Side that we know users will love, but spreading the word beyond our personal networks is incredibly difficult. Victoria understood this fundamental problem of reaching customers when she was trying to grow her travel company and did something amazing to fix it. Unfortunately, as college students our budget is, for lack of a better word, low. So, at least for now we will have to use our networks wisely and hope people reach out to us with feedback and spread the word themselves (we’d love your help!).

Our second stop at Google was to speak with Jeremy Sugerman, Co-founder at Talaria and first employee at VMware. Needless to say, Jeremy is definitely one of the smartest people we’ve ever met. What was best about the discussion we had with him, however, was how open and down-to-earth he was. With VMware and Talaria, Jeremy faced a situation most startups could only dream of: Not only were all of the co-founders technical, but they also worked well together. As a team, they followed perhaps the most important message that Jeremy shared with us: We should not build a company for the sake of building a company, but rather we should hack away on a product that we love and truly care about. Only with such a product will a successful company emerge. With this mentality, we have built Side as a tool and experience that we, above all else, wholeheartedly enjoy. With our upcoming app release, it seems only fair that we share something with you all that we love so you can try it out for yourselves.

We hope that, in following Jeremy’s advice of building something we care about, we’ve created something you too like to use. Try it out for yourself here and let us know what you think.

Happy Siding!

Quora is a company that gives cynics enough fodder to chew upon, but it is not the cynics who change the world.

- Ishaan Chugh, CEO, EagerPanda

Last week, we visited the headquarters of Quora in Mountain View. Quora is one of the most interesting companies in the world today, and is especially interesting to EagerPanda because we share the exact same mission: To grow the world’s knowledge.

Meeting each of the internal teams pretty much drove home the point that Quora is a company built for the long term. They have invested significantly in their infrastructure – something that would hold them in good stead once Quora reaches scale. Adam D’Angelo, the company’s technically-brilliant co-founder, echoed the exact same sentiment in the Q&A that followed.

It was heartening to hear Adam speak candidly about Quora’s mission. There used to be a time when technologists worked on problems whose culmination would mark a paradigm shift in how we live. Unfortunately, a wave of incrementalism has blinded us recently. Our best computer scientists are working on closing well-defined market arbitrages and are, in my opinion, overly praised for it. There are thousands of ‘startups’ that believe having a web presence gives them license to masquerade as a technology company. And thus, Quora stands out. The problem they are tackling isn’t well-defined. There is no clear path to revenue, but the heart of what they’re building has implications very core to the human condition. It is a company that has sprung not as a reaction to a market opportunity, but from a very sound underlying philosophy.

History provides us ample evidence that as a race, our progress has been a function of the accessibility of knowledge and the ability to communicate around that knowledge. Until a couple of decades ago, pockets of society where these two criteria were well met flourished and became the source of innovation during their time period. This was true of Nalanda in India around the 6th century AD. This was true of Western Europe during the Renaissance. Now, finally, we have through the web all the infrastructure we need to replicate this phenomenon at a global level. Thus, a system that allows people to effectively share and retrieve knowledge without any barriers of age, culture, nationality and (in the near future) language, will have implications as profound as the web itself.

Critics of Quora could argue that perhaps Q&A and blogs don’t offer the best medium to do that. They could argue that as it scales it will run into the same problems of finding relevant knowledge as Google. They could further argue if discovering “What the cutest thing a five-year-old has said” construes as knowledge at all. Quora is a company that gives cynics enough fodder to chew upon, but it is not the cynics who change the world. 

To make a knowledge-sharing platform that is ubiquitous will be akin to navigating Daedelus’ Labyrinth. To successfully emerge from it would involve copious amounts of back tracking and slaying Minotaurs. Whether EagerPanda or Quora wins this race is irrelevant. The reward will be shared by both and that reward is accelerated human progress.

We hosted Scott Weller, CTO and co-founder of SessionM, for lunch last week in Cambridge. Scott has a number of startups under his belt throughout his 20 year career as an engineer and software architect, so we talked a lot about early decisions founders make and how those decisions affect their businesses down the road.

Scott made the point that startup ideas usually end up far from where they start; yet, there exist some key observations that do not change, even as the idea evolves. SessionM, in particular, started out as a consumer application wherein users would traverse a world strewn with branded rewards and discover them as they moved about. The company has since evolved into a platform that connects users to brands through rewards in mobile ad units, not its own first-party app. What SessionM has kept at its core is the notion that game dynamics, implemented through rewards, can create meaningful interactions with brands. What has changed is simply the distribution channel for those interactions.

Scott also discussed the early team-building decisions that he and his co-founders made at SessionM. In fact, Scott and his co-founder Mark initially started working on SessionM before their third co-founder Lars joined. Scott and Mark identified that, if they wanted to go to market through a mobile ad unit, they needed to bring on someone who understood the market. Fortunately, Lars had previously helped build the mobile ad network that is today known as iAd at a startup called Quattro Wireless. Lars had the right complementary skill set to both Scott and Mark for this new distribution channel.

In addition, when Scott thinks about bringing on additional team members, he encourages his employees to go out and “find their replacement;” that is, to hire someone that could do your job better than you. A key part of the SessionM culture is that employees are not insecure about their own abilities and are not threatened by A-players who raise the average bar of the company.

Scott also likes to create a bit of a competitive dynamic with his managers when it comes to new hires. It can be easy for 5 managers to sit around a table and say, “We should hire this guy/gal.” But it’s harder for them to say, “We should hire this guy/gal, and I want him/her working for me.” Unless Scott hears the latter from multiple managers, and in fact hears them argue about who gets that particular candidate, he questions whether that person should be hired at all.

Scott closed the meeting with one final thought: don’t look at your business as you would look at the top of a mountain from the bottom up. Look at it like you’re on the top, looking down. Right now, when you’re just starting out, your vantage point is the best. As you add employees, product features and other obligations, it will only get cloudier.

Team Pave (f.k.a. Butucu) wrote the below post after our kickoff bootcamp last week. Check out what they learned from our friends at IDEO about design and the methodologies of ideation:

As part of our day at the Summer@Highland kick-off bootcamp, Joe Gerber from IDEO shared some amazing insights into the design process. The principles of design, according to Joe, encompass far more than just aesthetics. We loved hearing how we could extend the same thought we at Pave have put into the dimensions and arrangements of our game and feed into our workflow, business plan and user testing.

One concept that Joe shared for proper design idea generation was a strategy known to most entrepreneurs: storyboarding. Despite how questionably useful writing down a bunch of thoughts on Post-its and throwing them on a whiteboard may seem to those who have never tried it, IDEO shared some integral additions and changes to the process that proved to be so incredibly useful just hours after Joe had left as we struggled to decide how to implement a very key figure of Pave.

Believe it or not, our first day of working on Pave was the day we arrived at Summer@Highland. Some say we underwent a large pivot; we much prefer the word refresh. Essentially, Pave helps you discover what your friends think about your preferences and personality and provides recommendations on anything (*from brands to behavioral tweaks*) based on your friends’ responses. On Pave, you also weigh in on questions about your friends’ tastes and characters to help them learn about themselves.

Because self-discovery is what we think will bring users back to Pave, we incentivize giving your opinions of your friends by having you appear more often in their game the more rapidly you answer questions about them. Our current problem, however, was to make this incentive as clear as possible while you answered, say, whether Jim from college would rather honeymoon in Maui or Switzerland, or that Ignition by R. Kelly was a better first date song for Karen from work than Beethoven’s 5th. Unfortunately, perhaps because we were approaching hour 17 of the work day, most ideas we were spitting out were leading nowhere. After we remembered that Highland Capital Partners stocked our office with free Post-its, we knew what had to happen.

IDEO’s storyboarding process – or at least how we interpreted it – started off with a five-minute brainstorming session that emphasized a few simple rules:

1. Quantity over quality.

2. The word “but” was explicitly banned. Every idea must build upon a previous thought or move in another direction without shutting down anything that had been said. This strictly positive atmosphere proved to be amazingly beneficial because we got more confident with each thought we blurted out.

3. Wild and crazy ideas were encouraged. Often, as Joe described, some of the greatest design decisions come out of insane concepts that people would not be so willing to share if there was a chance that people were able to provide negative feedback (thanks to the purpose of rule #2). One of our own ridiculous and perhaps even creepy ideas was to have a realistically aging face in the top bar of Pave to portray the number of insights we were in the process of uncovering for a user. While admittedly bizarre, the underlying concept of giving visual feedback that we were getting closer to being able to share more information and recommendations for you (increasing age representing greater wisdom for those that are maybe not as crazy as we are) was an incredibly important cue to uncover and implement.

4. Only one person could speak at a time. If you had anything to say while someone is talking you wrote down two to five words on a Post-it and slapped it in front of you. (We also used Post-its to write down buzzwords/concepts we liked that someone had said.) Not being able to interject proved to be quite the team-building exercise. It forced you to listen, and most importantly, it forced you to truly think rather than simply react.

Once we had gone through more Post-its then most do in a week, we were ready to start the next step: organizing our notes. This stage was much more time consuming but equally as insightful. We ended up categorizing our ideas by the specific goal the item would try to accomplish. This approach was great because it allowed us to pick the component we liked best from each group and then build them together into one feature.

We’d love for you to check out and play with the design we chose by signing up to be a beta tester at www.getpave.com. Although we will admit to spending closer to 15 minutes on this brainstorming rather than Joe’s suggested five, the design you will find on Pave would not have been created without the rapid open-minded idea generation. The process truly forced us to push beyond just our first thoughts and build upon each other rather than instinctively poking holes in each others arguments and egos. Moving forward, we would also love to invite potential users to participate in more “formal” iterations of these sessions. Their imaginations and insights complement our own and, perhaps best of all, the mandatory exclusion of negative feedback would allow us to hone in on what they really want rather than the much larger set of what they dislike.

Our first two weeks at Summer@Highland are coming to a close, and Pave is rapidly approaching its beta launch. With a few more exciting features in store besides the game feed, we are really looking for general user feedback and beta testers! Please visit www.getpave.com to get started.

Oh, and as roommates we have now seriously considered using IDEO type brainstorming to finally give us a good way to decide what to eat for dinner. Turducken anyone?

Introducing the Summer@Highland Class of 2013!

When we opened our call for Summer@Highland applications a few months ago, the entire Highland investment team pitched in to get the word out. We came bearing pizza to almost 30 university campuses in a little over a month. We held a couple Google+ Hangouts to connect with those we couldn’t meet with in person. Nearly 900 students applied from 85 universities around the globe, and we subsequently pored over each individual application looking for the top student teams to bring into our offices this summer.

Selecting the small number of teams we can host for the summer was an enormous challenge. We were blown away by not only the amount of applications we received, but also by their caliber. The majority of teams not only have a working product, but many of them have users, partners and have achieved some insanely impressive milestones – all while being full-time students.

We ended up selecting the following nine exceptional teams from across the country (PandoDaily also wrote a nice write-up here). Please meet and congratulate the Summer@Highland Class of 2013!

Alpha (Stanford University) – Alpha is a digital university for hackers that teaches experienced developers how to build actual applications for the “real world” through project-based learning in the browser. The team is also a finalist in the BASES (Business Association of Stanford Entrepreneurial Students) 150K Challenge

Butucu (Harvard College) – Butucu, an all-freshman team, aims to help retail stores improve the customer experience by allowing them to push custom, relevant content to in-store shoppers while providing high-level analytics

Connect.com (Harvard Business School) – What if all your connections from Facebook, LinkedIn and Gmail were shown on a map? Connect.com puts all your friends on a map so you can find people when traveling, plan events and visually explore your network. The company is co-founded by Ryan Allis, previously the co-founder and CEO of iContact (acquired by Vocus (NASDAQ: VOCS) for $169 million in 2012)

EagerPanda (MIT) – EagerPanda allows educators to easily build their own custom online courses, and enables learners to connect and communicate around this content

Phyre (Boston College) – Winner of the Boston College Venture Competition, Phyre is building a portable device that makes it easy to wirelessly connect and interact with large displays from any phone, tablet or laptop

Sension (Stanford University) – A computer vision platform that makes online content engaging for the user, Sension works with a simple webcam to let anyone make videos that respond to the viewer

Skillbridge (Wharton School of the University of Pennsylvania) – Skillbridge is an online talent marketplace for businesses to find top-quality yet affordable business freelancers for short-term projects

Splat (Cornell University) – Splat is a small device that transforms a smartphone into the ultimate social-gaming console, letting users play physical, in-person, interactive video games

Technical Machine (Olin College) – Technical Machine is an embeddable platform for developers to make internet-connected physical devices

Congratulations and best of luck to each and every student who applied this year – we couldn’t be happier to now have you as an extension of the Highland family and look forward to working together in some fashion over the course of your career.

And stay tuned to this blog throughout the summer to follow the progress of the Summer@Highland Class of 2013!

- Alex Taussig, Principal, Highland Capital Partners

Last week, we held a Google+ Hangout with students from Columbia, Dartmouth, Harvard, University of Maryland and Stanford in order to let them ask some questions about the Summer@Highland application and the program itself. It was a ton of fun, so we decided to host another one, and also detailed a few of the topics we discussed below.

If you’d like the chance to join the next Hangout tomorrow at 1:00pm PT, RSVP here: http://highlandsummerqanda.eventbrite.com/

And don’t forget, the final deadline to get your application in is ONE WEEK from today! Don’t wait until the last minute; apply now at http://summer.hcp.com/

—-

Other programs require a detailed business plan, while the Summer@Highland application only needs a two-minute video. Why is that?

We think it’s a relative waste of time to write a long, detailed business plan if you’ve barely launched. We structured the application so we could get the “minimally viable information” we need to decide if we should advance you to the next round for an interview. So, we’re basically looking for two things:

  1. Whether the team you’ve compiled has the wherewithal to execute on your vision
  2. How well you know the market and problem set you’re tackling

What else are you looking for in the video?

The main purpose of the video is to get a feel for the team, so please do NOT just submit a screencast. Other things we look for:

  • How well you communicate what your product is/does
  • How well you communicate your long-term vision
  • What you hope to accomplish during your 10 weeks with us over the summer

What is the difference between being located in the Boston vs. the Silicon Valley office?

Boston weather is surprisingly good in the summer time, believe it or not, so you’ll all set in either case. Besides that, we suggest you choose the place where you want to base the business going forward for the purposes of hiring early employees, or finding your first customers.

Do you favor startups in certain markets over others?

Since Summer@Highland is only 10 weeks long, the program is really about speed and acceleration. We’re looking for teams that can make a big impact in a short amount of time and achieve meaningful milestones over the summer. So while we don’t necessarily favor certain markets over others, there are a few, like physical sciences and expensive hardware, that aren’t a great fit. But, we don’t rule anything out because you never know. We love to be surprised!