Official Provo Labs Announcement
Provo Labs is now funded.
Our small incubator team intends to launch between 12-20 internet startup companies in the next 2-3 years. We have an office at Canyon Park now (in Orem) but as per our name, we’ll be moving to Provo early next year.
Our m/o is to generate great ideas, build working prototypes (or live web sites) quickly and by using the best internet marketing techniques, bring enough visitors to each web site that we can prove each concept.
If a business idea passes the initial market test, then we will provide enough seed capital to build a team and fund a go-to-market strategy. Our goal is to reach positive cash flow from Provo Labs initial investment.
But some startups will need more than just seed capital. If necessary, we’ll use FundingUniverse.com to help us find angel capital, or in some cases we might seek venture capital.
We love Provo and believe this is the right place to do internet business incubation. The talent pool is excellent. The language pool may be the best in the U.S. (because of BYU and the Mormon missionary system which sends thousands of young men and young women to live in more than 160 countries for two years.)
Some of my Silicon Valley friends who are struggling to find developers (since Google is hiring all the best people) have congratulated me for launching in Provo. They believe it will be a real advantage.
In the coming months we’ll be looking for part and full time developers, internet marketers, content experts, sales people and interns and lots and lots of contractors.
Our current investments include Infobase Media, which markets audio products, and FundingUniverse.com, which matches angel investors with entrepreneurs.
Our newly funded projects incude Worldhistory.com, where we intend to build the largest database of historical events, Blastyx, a Web 2.0-ish online promotion/marketing company, and a new mobile e-commerce technology company that we are doing with Alan Hall.
We are also exploring various other ideas including genealogy and family, online education, mapping, vertical search engines, social networking and blogging, politics, and international opportunities.
We also have a budget to acquire a number of web properties that have unrealized potential, where our team can significantly increase the traffic and revenue.
Our core competencies include content and search, online community building, and metrics-driven internet marketing.
If you want to experience the pace and intensity of Silicon Valley (yes, we are as passionate as Google about changing the world) while enjoying the Utah lifestyle, then please drop me an email or send a resume to Amy Rhoads at amyrhoadsATgmail.com.
We’ll invite you to some Geek Dinners or some entrepreneur Brainstorm Lunches, where we can get to know you better and see if there’s a place for your on our team.
Get data from massive web crawling system
Amazon owns Alexa, and today Alexa is announcing a web service that allows developers to make special requests for content during Alexa’s web crawls. The Wall Street Journal article gives the example of asking the crawler to help you identify new music files or images that have recently been posted to the web.
I’m interested in using the Alexa service to identify and track the number of links coming in to sites I am promoting (or competing with). The service is free for 10,000 requests a month and then there is a charge of $0.15 for each additional 1,000 requests, according to Paidcontent.org.
Last month I met the evangelist from Amazon’s six other web services at a BYU event, including the amazing Mechanical Turk.
It’s becoming more difficult to keep track of all the web services and APIs coming out from the major internet companies.
Who knows the best blog or web site that tracks all of these?
Yahoo buys del.icio.us
First Flickr, now del.icio.us. In April Del.icio.us got “somewhere around $2 million” in funding for a minority stake. Don’t know yet what Yahoo paid for it. Company has only 9 employees but has really had an impact in tagging and bookmarking.
Free Online Stock Photos
From Seth Godin:
StockxChange just launched version 6, and it’s better than ever. 175,000 free photos, most of them amazing. They also launched a for-fee site, but this is a great place to start.
Low Cost Mobile Internet-Enabled Computers
AMD and DOL (the largest ISP in Turkey) are rolling out an internet-enabled 3 pound computing and communicating devices for $19.95 per month. Radio Shack sells a US version. AMD wants 50% of the world population to have computing devices by 2015. (See article)
November Connect Magazine Column
Check out my latest article in Connect Magazine that gives my impressions of the Shop.org event in Las Vegas earlier this year. Let me know what you think of the article.
And please, tell me topics you would like me to cover next time? Remember, at Connect you are the “editor-in-chief” so let me know what you want to see.
In case I haven’t mentioned it before, I got this Connect writing gig because of my blog. I’ve written before about the myriad benefits of blogging.
UVEF Award winners
Here are the winners of awards from UVEF this year.
1. Mike Proper won the Ron Community Service Award. He was orphaned at age 10 and didn’t finish high school, but he has created more than one multi-million business, and his current company DirectPointe is growing by 200% per year. Mike speaks often to high school and college students. He has helped create a public private partnership to help single moms escape the dead end of low paying jobs.
Mike Proper: I find meaning from our forefathers who gave us freedom and opportunity. I want to acknowledge them. He plans to be more involve at UVEF. I wants to help others believe in themselves. I want everyone to feel worth and to know that each one can know they can do whatever they set their mind to.
2. Greatest Contribution to Entrepreneurs: Kyle Love. He cofounded UVEF in 1989. He serves on boards for Omniture and ShopSite. He is a founding member of Utah Angels. He has helped at BYU with mentoring students. He recently helped turn around Cogito and raise $10 million for it.
Kyle: when he graduated from college he and his wife wanted to stay here, but there wasn’t much high tech opportunity, so we moved to Oregon. In 1981 they wanted to move back. He worked for Wicat then started his own. Back then there was no venture capital. So we’ve tried to help make
3. Best Kept Secret. Certiport. In the last 7 years the company has emerged as a leader in training and certification. There are more than 9,000 Certiport centers in 130 countries. In Cleveland, Certiport is working to certify 30,000 underserved citiizens so they aren’t shut out from the digital world.
David, CEO. I relocated from NYC Manhattan to come here because of the beauty of this place and the pool of talent. We work in 20 different languages because of the talent pool here. We have 130 employees in American Fork. 4 men and 3 women executives.
4. Most Innovative Product. Network Composer by Cymphonix. This product let’s network administrators see what is happening on the internet in real time. It is a robust threat-management and performance optimizing firewall available today. It is not a subscription solution, but is the most affordable solution available.
Kevin Santiago, CEO. I’m glad I didn’t have to describe our product. I’ve been carrying around a book called “Your Marketing Sucks.” Two of our angel investors are here today, including John Richards and David Ruff. John helped us get to vSpring, our lead investor.
5. Entrepreneur of the Year: Morgan Lynch, LogoWorks. This company solves a simple problem, helping businesses get a great logo at a low price. More than 30,000 businesses have used this service, which uses multiple designers to give businesses a choice in logos.
Morgan Lynch: I have Lance Archibald here with me of Date Lance fame and he just won some jazz tickets. This year we’ve had a great year, getting to VC funds to make their first investments here in Utah. We have attracted a lot of talent. The Date Lance thing has turned into something bigger. People love working at our company. There were times as a bootstrap company where we had low compensation and no compensation plans. Now I go to work and I love it and I think, wow, how did this happen? Every time I come back to Utah Valley I think we are so lucky to be here, we have great access to talent and a lower cost structure.
Sent wirelessly via BlackBerry from T-Mobile.
UVEF luncheon today
I should have blogged about this a few days ago. UVEF is holding it’s annual December awards banquet at noon today at the Provo Marriott. Keith McCord will be the master of ceremonies. Pay $20 at the door and learn about the top entrepreneurial businesses in Utah this year (as judged by our UVEF board of trustees.) This is always a great networking opportunity for Utah entrepreneurs.
Concept to Contender Overnight
Business 2.0 had a great article back in June about how entrepreneurs are creating instant companies by coming up with great ideas and outsourcing just about everything.
Here’s an excerpt:
In sum, four guys with a great idea, some good contacts, and a loan to cover initial inventory figured they could go head-to-head with Nike (NKE) in just 60 days.
Two months later a factory in China was churning out the clogs, the slip-ons, and, yes, the Mary Janes — 16 styles in all. The rest is footwear history. According to Van Dine, in 2004 Keen sold $30 million worth of shoes — around 700,000 pairs — with Mary Janes and other nonsandals accounting for 45 percent of the total. To put that in perspective, it took Teva three years to reach just $1 million in annual sales. Within months of Keen’s launch, some of the most highly trafficked hipster websites and outdoor-gear blogs were singing the brand’s praises, generating free buzz worth hundreds of thousands of dollars. “You could say we were birthed full size,” Van Dine says.
Keen’s overnight rise reflects many elements of traditional brand building: a product customers love, a talented management team, even old-fashioned tactics like telling retailers the shoes are sold out just to stoke demand. But the company’s swift transformation from industry nobody to brand somebody also makes Keen something else: an example of a new breed of product-oriented startups that’s going from concept to contender at warp speed.
In apparel, toys, sports equipment, electronics, motor vehicles — you name it — small but savvy new companies are wedging themselves into established industries, unburdened by the fixed costs of infrastructure past. They’re doing it with the help of resources never before available so cheaply to startups, like outsourced manufacturing, Internet-powered publicity, and robust design tools. To get to market fast, they farm out everything they can, from logistics and billing to sales and support. “This,” says Timothy Faley, managing director of the University of Michigan’s Institute for Entrepreneurial Studies, “is how the manufacturing moguls of the future are getting started.”
The keys to success in fast company building seem to be:
1. “some good contacts”
2. powerful design tools
3. outsourced manufacturing
4. internet-based publicity
The author quotes a business professor who says these fast moving companies seem to “farm out everything they can, from logistics and billing to sales and support.”
I’m trying to figure out how Provo Labs, my newly christened internet business incubator, will be able to start and fund at least a dozen successful internet companies in the next three years.
I think this Business 2.0 article contains several keys and definitely reflects the kind of mind-set that our small internal team needs to have.
Some good contacts. I have about 3,000 contacts in my Blackberry and Yahoo Mail database. My assistant and I are going through all of them to categorize them, list their talents and skills, and to identify contractors and potential employees that could meet current and future needs.
Phil801, our COO, has relationships with scores of developers. By using Monster.com, elance, local recruiters and our own blogs and email lists, we should be able to identify skilled people who can meet any need, quickly and cost-effectively.
So our Provo Labs weekly meetings might look something like this:
Paul. Worldhistory.com needs a multi-user blog functionality and we need to recruit 100 history teachers to blog on different topics.
Amy. We’ve got 12 open source developers in our talent database that can do that.
Phil. Trent is available and he can do this in a few hours.
Amy. Done.
Phil. Why don’t we ask Dave to do a fax campaign to 10,000 public and private schools and offer a bonus to history teachers who run the most popular blogs during the next three months.
Paul. Okay. Have him run the creative past Bruce before he goes live.
Amy. I’ll take care of that.
Phil. Blastyx needs 100 gb of storage space for the new video streams we’re going to be hosting once our contract filming teams visit client X and client Y.
Paul. Call Erich, ask him to add a new harddrive to our server. Dan just bought a bunch of hardware on eBay, so have Erich check with him first and bill us for this.
Phil. I just emailed him.
Amy. We need 4 more contract writers for ConstantPR because our press release demand is really picking up.
Phil. Danny can hire 4 more people for us within a week in the Phillipines office.
Paul. Do it.
Paul. We’ve got to get our traffic up on directory.net. I think we should bid on another 10,000 or so keywords.
Phil. I’ll ask John to send us a list of the next best 10,000 keywords using his keyword analysis tool, and I’ll send them over to Jim to upload them to Google and Yahoo Search.
Paul. We also need to test new landing pages on the sponsor sign up page.
Amy. I’ll email 3 landing page designers and ask each one to submit a new design by tomorrow evening.
Phil. Jimmy can roll them live so in two days we’ll have some data.
Outsourcing almost everything. If our small team can get to know the customer needs (based on customer feedback and management input) for all of our companies as well as the skills sets and availability of hundreds of outside web designers, back end developers, hardware engineers, web analysts, search engine marketers, copy writers, email marketers, recruiters, and business development people in dozens of large and small companies, then our planning meetings will be rapid-fire.
First we’ll brainstorm for each of our companies. “Of all the things we could be doing to increase revenue, grow traffic, or cut costs (improve efficiencies), which should we try?”
Second, we’ll ask ourselves, who can do this quickly and well?
Third, we’ll make decisions and communicate them.
Fourth, we’ll use Tadalist.com (or maybe we’ll upgrade to BaseCamp after reading this Business 2.0 article again) to keep track of who is doing what and when.
Our core competencies need to be:
1) creativity and vision. We get that by attending all the best conferences, networking like crazy, brainstorming often and sharing freely with everyone we meet (not holding our cards to our vest), and reading all the best books and blogs.
2) talent scouts. Every one we meet is a potential contributor to one or more of our companies. We must always capture contact information and categorize the individual so they show up in our talent database. We’ll flag contractors differently than potential full-time employees.
3) clear communication. We need to be crisp about communicating expectations, deadlines, and compensation.
Internet-based marketing. Three years ago we started 10x Marketing with a vision that every internet based company that we ever start in the future will likely be successful if we can have world class internet marketing available to us instantly.
So Provo Labs can outsource internet marketing to the team at 10x Marketing, or we can find independent contractors or other agencies that we can mobilize instantly around any new idea or web site that we launch.
One of our companies, Blastyx, will focus on internet-based publicity generation that will reach out into the blogosphere as well as capture the attention of traditional media. This is going to be hot.
So we’ll utilize Blastyx to help launch each new company.
Conclusion. We live in an exciting era where great knowledge and empowering tools are available from sources worldwide.
But most workers today, even though they use email and the Web, are not really knowledge workers.
The mindset discussed in Business 2.0 is radically different from what people are accustomed to.
Most businesses have tons of unproductive employees.
The Entrepreneur’s Manual published in 1977 by Richard White Jr. discusses this problem:
“Scientists and engineers have a way of measuring a machine’s actual output against what that machine would do if there were no frictions, inefficiencies, or lost potentials. They call it effective output. If a machine’s effective output is too low, the engineers redesign it to lower its frictions, improve its inefficiences, and realize more of its lost potentials.
There is no “machine” with greater capabilities or more flexibilities than the people who will work with and for you. What percentage of output would you guess that most companies realize from their people with respect to what they could realize if everyone gave his fullest to the company? Would you believe that the average large company realizes between 1% and 3% effective output efficiencies? According to the Institute of American Business Consultants, the average bureaucracy realizes between 0.25%-0.50% employee effective efficiency, the average industrial firm with greater than 10,000 employees between 0.5% and 1.5%; the average firm with greater than 500 employees, 1.0%-3.0%.
We’ll discuss ways of rigging your company so that you’ll incorporate the incentives and the systems to increase your team’s output efficiences to between 10% and 15% later, but for right now it is important that you realize that your start-up can work extremely well with from 1/4th to 1/10th the number of warm bodies that your competitors must carry.”
I think the Business 2.0 article and the hypothetical meeting I described above (where we rapidly match ideas with people and make assignments quickly) could describe companies that may achieve output efficiences approaching 50% or higher, if that is even humanly possible.
I believe we at Provo Labs have the proper mindset; let’s hope we also have the network and the skill set to pull this off — to become the Idealab! of Utah.
Mark Cuban post on preloaded iPods
Mark Cuban has a great post on how nice it would be to be able to fill up mp3 players with 30-100 GB of great content and listen to our hearts content.
Not only is there a problem with the “statutory mechanical royalty rate” per song that makes this prohibitively expensive, but one of my companies tried to pre-load other content (audio books for which it has rights) onto iPods last year only to find that when customers configured the iPod for their computer system they lost everything that had been pre-installed.
So there are licensing limitations and technical limitations.
Does anyone know if any mp3 player manufacturer has overcome the technical problems with pre-loading content?
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