This is the sage advice of John Winning, CEO of AppliancesOnline. In 2005, JohnWinning decided that there was a better way to address a common problem - when a major appliance fails, it needs to be instantly replaced. Plus, the old one needs to be removed. With this in mind, Winning launched Appliances [...]
Rather than choosing the comfort and security of a well-paid position at a large company, some of these coveted technicians choose to forge something of their own. A number of the most successful data startups have data scientists at their helm.
VentureBeat talked with a series of data scientists who went on to become founders and CEOs to learn more about how their background influences their leadership, product, and business strategies — and what it takes to succeed in an increasingly competitive, data-driven world.
All these data scientists-turned-CEOs put a heavy emphasis on data in their own business. They make data a core part of their strategy, operations, and decision-making process. Ultimately, data is only as valuable as what you do with it, and as self-described “data nerds,” these CEOs have an edge.
Editor’s note: Our upcoming DataBeat/Data Science Summit, tomorrow and Thurdsay in Redwood City, will focus on the most compelling opportunities for businesses in the area of datascience and data analytics. There are only a few seats left, so be sure to register now!
Shashi Upadhyay has a Ph.D in physics from Cornell. He analyzed humongous datasets as part of his doctoral research. After graduation, many of his classmates and colleagues took jobs on Wall Street, where they were well compensated for their knowledge of math and statistics.
Upadhyay accepted a position with McKinsey Consulting (a global management consulting firm), where he spent six and a half years advising on sales and marketing problems before founding Lattice Engines.
“As the world has gone digital, data volume has exploded, and retailers tend to have humongous amounts of data,” Upadhyay said in an interview. “I realized there was an opportunity to connect the dots between my experiences. It is hard for most companies to put together a data-science team and compete in the war for talent, and I thought instead they would look for automated solutions.”
LatticeEngines bills itself as “big data for big sales.” Its platform analyzes data and delivers real-time reports with specific data to sales representatives, who can use the information to generate leads and close deals. The engine uses predictive analytics to help sales people anticipate their customers’ behavior.
Upadhyay said that founders and execs of datacompanies must be the “masters” of three domains: They must have unique subject matter expertise, an understanding of machine learning, and the capability to build systems that can scale. And it’s rare to find a leader with a grasp of all three.
“If you spend all your life analyzing data, like I have, certain things become muscle memory,” he said. “You know what is important to the end users, what the problems are, what is doable, and how long something will take. What makes us differentiates us is we have all three of those pieces.”
Upadhyay’s datascience background is also important for recruiting data scientists to the Lattice team and ensuring they are productive and happy employees.
“Other companies make the mistake of bringing in data scientists and treating them like developers, but they are not the same,” he said. “Data scientists care about having an impact on the business, but companies systematically underinvest in training them in the domain and forming a linkage with other parts of the business.”
Thomas Thurston is something of a renaissance man when it comes to datascience. He has an MBA and a law degree and is a member of Harvard Business School’s Forum for Growth and Innovation.
Thurston spent a stint working at Intel Capital, serves as the chief technology officer and fund manager of the Ironstone Group (a venture firm that uses datascience to make investments), and is the founder and CEO of Growth Science, which uses data to predict if businesses will survive or fail.
“I think of datascience as a way of thinking about the world in terms of hypotheses, testing, confidence, and error margins,” Thurston told VentureBeat. “A background in datascience tends to help CEOs ask better questions and get better feedback, because it brings conversations down to a level of reality and practicality. Facts, data, and probabilities can have a way of removing the ego, politics, and hand-waving from a conversation.”
Thurston said that he favors hard data over more intuitive considerations. Like Upadhyay, he is a proponent of challenging all ideas until they are backed up with data and not taking anything for granted.
“It’s not that I don’t value intuition or more ‘soft’ inputs – sometimes they’re so important they can override everything else,” he said. “It’s just all too often in datascience that you see intuition, anecdote, and feeling get turned on its head by actual data. Everyone thought the world was flat. It looked that way. It felt that way. It was intuitive. It was also dead wrong. I find it corrective to try to keep this in mind. Like it or not, I can be wrong at any moment, so I must be willing to adapt.”
Thurston said his favorite “datascience moments” are when he learns something that flies in the face of conventional wisdom, and that these can become significant commercial advantages.
However datascience and the advantages it brings have yet to make their way into more mainstream businesses. Both Thurston and Upadhyay expect that the evolution of this field will involve making datascience more accessible to smaller, less tech savvy businesses.
The following scene plays out millions of times a day all over the world: A commuter is headed to work in her car. Keeping safe on the road is taking the majority of her attention. In fact, she’s blissfully unaware of the symphony of mechanical engineering that is happening all around her.
To keep the car moving, gas is being combusted in pressurized chambers to produce thrust to move the pistons up and down and drive the crankshaft. She doesn’t see any of that. Instead, she sees a visualization of that activity through the RPM gauge on her dashboard. The gas that is fueling the engine is being syphoned out of her gas tank and injected into the engine. She doesn’t have to worry about the level of fuel, because she can see how much gas she has right there on her dashboard via the fuel gauge.
And finally, she’s able to avoid trouble with the law and still arrive to work on time by maintaining an optimal speed, which is conveyed to her by the speedometer on her… you guessed it, dashboard.
Now, let’s remember this commuter as we examine another occurrence that likewise happens millions of times a day:
A CEO is sitting in his office.
He has 300 employees and his company produces small aluminum parts for model aircraft and cars. He is in the proverbial driver’s seat of his company, sitting in the office chair in the CEO’s office. Ensuring his company runs smoothly takes up the majority of his attention. Perhaps not as unbeknownst as the engine functions to the commuter, the CEO is aware that there is an abundance of activity going on all around him in his company. However, the data to measure that activity is not at his fingertips.
If he needs to know how production is going today, he’ll probably have to put a call into his factory foreman to ask for the figures. At that point, the foreman will have to email the data up to the CEO.
If the CEO wants to know how collections on the company’s accounts are going, he’ll have to walk over to accounting and ask for a report on the latest figures. Likewise, his queries to HR and customer service will be handled in a similar manner.
The way he is collecting data is rudimentary. If he was the commuter, he would be getting out of the car with a dipstick to check the fuel level. He’d also have his head out the window to hear the roar of the engine to estimate the RPMs and to know when to shift.
This analog method of data collection is why data dashboards are becoming one of the fastest growing segments of the software market. They take all of the data from a myriad of sources and visualize it in an easily digestible fashion. What used to take up the majority of senior management’s day is now automated and delivered in moments.
The improvements in efficiencies that this technology offers are plentiful. For instance, if a shipment of parts is delayed at the loading docks, this data can be seen immediately. Management could then make adjustments to the production queue in order to avoid a slowdown due to missing parts.
A sales manager could see the performance of his entire team up to the minute. That data could then be passed along to the C-Suite where marketing budgets could be adjusted in order to accommodate more leads for the sales team.
The possibilities are truly endless. Therefore, entrepreneurs and established businesses alike can benefit from this technology. With so many possibilities for reporting products, entrepreneurs can target a vertical, produce an innovative solution, and attack a wide open market. Meanwhile, the established business can identify a shortcoming in their data aggregation, identify a product that addresses that shortcoming and increase their productivity immediately.
Data Dashboards are not a new technology, but with more data becoming available and technology becoming ubiquitous through the use of mobile devices, the need for dashboards has become critical in companies large and small.
On the heels of Turntable.fm shutting down its recorded music listening rooms to focus on live events, Oslo-based rival Soundrop is doubling down on the social listening model. Today, to complement an existing app for Spotify, Soundrop is launching an app on Deezer - a streaming music rival to Spotify - which will let users on Spotify and those on Deezer come together in virtual rooms (‘tens of thousands' of rooms created so far) to consume music simultaneously, and extend Soundrop's scale as a marketing platform for the artists, labels and brands with whom it works. At the same time, Soundrop's co-founder Inge Sandvik is stepping down as CEO, replaced by Jørn Haanæs, Soundrop's chief revenue office and a former exec from Warner Music.
To mark the new app, Soundrop is launching three new rooms featuring Euro club DJs and producers: Trentemøller on November 25 at 6 PM GMT; The Bloody Beetroots on November 26 at 4 PM GMT; and Yuksek on November 27 at 6 PMGMT. You can listen to those here.
Soundrop, which officially turns two today, launched its first service in January 2012 as a Spotify-only app. It quickly picked up traction at a time when Spotify had little in the way of its own discovery features and social features to help users wade through the millions of tracks they could potentially listen to on the platform. The “rooms” on Soundrop are interactive: users can “vote up” tracks they like, see how others are voting, and speak with others in the various listening rooms.
Since then, though, times have changed for both. Soundrop has added access via Facebook as well as its own standalone iOS app and web interface - services that incorporate videos from YouTube in cases where tracks have not been available on Spotify. Spotify has also enhanced its own platform with web interfaces; discovery and social features of its own; more apps from third parties - and potentially a lot more, courtesy of its latest, $ 250 million round of funding.
Launching on Deezer is emblematic of how Soundrop wants position itself as more platform agnostic. It's a different tune from Soundrop's Spotify-only early days: the two share an investor (Northzone, which backed Soundrop with $ 3 million last year); and at one point Soundrop engineers were working out of Spotify's offices in Stockholm.
Soundrop features both user-created listening rooms and brand-, label- and artist-created listening rooms. The latter service, which works on a B2B2C model (in which labels, brands and so on pay Soundrop to create the promotional rooms on its platform) has shot up in activity: Soundrop hosted 42 artist events in October, compared to eight during all of Q4 2012. The company tells me that it is now at 150,000 monthly active users (before today's launch).
Adding a Deezer app will potentially help Soundrop scale out that B2B2C business because it means a bigger potential audience for those listening rooms, something that may be spurred also by a potential Deezer launch in the U.S. And that will give Soundrop an important negotiating chip with those labels, brands and artists. From what I understand, the intention is to add more streaming platforms over time - although, given some of the consolidation we're seeing in the space, the list of potential candidates make shrink before Soundrop has a chance to reach them.
As for the management change, it's not completely clear why Sandvik is stepping down as CEO. From all of my conversations with him in the past, it sounds to me like Soundrop is executing on plans that Sandvik himself had helped lay out. It sounds like he may be moving on to something new - playing on his background as a serial entrepreneur, perhaps.
“I have been putting all my time and effort to the company now for the last 2 1/2 years. It's been a great time and I am proud of what we have accomplished,” he told me. “What drives me is to build great products with great people, and I see that there are some great opportunities to do that outside Soundrop.” He tells me that he will stay on the board and will remain a major shareholder of Soundrop.
Haanæs - who had been Soundrop's chief revenue officer before taking the role of CEO - had previously been an executive for Warner Music in Norway. It may be just a coincidence, or it may be by design, but Warner Music happens to be owned by Access Industries, which is also a major shareholder in Deezer.
Some developments for 7digital, the UK-based music platform that powers download and streaming services for the likes of Samsung, HTC, T-Mobile and Pure: it has entered into acquisition talks and a “reverse merger” with UBC Media, a radio program producer, developer of interactive audio technology, and software investor (it's the largest shareholder in Audioboo, a platform where you can make and share audio recordings). As part of the deal, UBC is providing 7digital with a £1 million ($ 1.6 million) loan that can be converted into shares in UBC - which is publicly traded in London on the AIM exchange.
On top of that, 7digital is announcing a couple of expansions of its service - confirmation that it is powering a new streaming service from HMV in the UK and Ireland; and a deal with Apple/Intel-backed Imagination Technologies‘ Pure to power a streaming service in the U.S. to complement its Jongo wireless speakers.
Imagination Technologies, in fact, is both a strategic investor in UBC as well as 7digital. It came on as a backer to 7digital as one of the two undisclosed companies in its last $ 10 million venture round in 2012 (Dolby is the other), with $ 7 million coming from Imaginational. Ben Drury, CEO at 7digital, claims that having Imagination Technologies as a common investor was more coincidental and convenient than it was a part of the original interest between the two companies.
In that context, 7digital has been something of a minnow. Although it has its own consumer-facing service, it has perhaps more importantly played a role in how other, bigger-name companies have been able to build out digitalmusic plays to compete against the likes of iTunes from Apple. By way of an API, 7digital takes on all the infrastructure management, licensing and reporting for these third parties, which include Samsung's MusicHub, BlackBerry's music store, and the Pure Music service. Former partners include Spotify (which used it to power a download service, which it then took in-house and then axed altogether). In total, 7digital says that these wholesale-style services and its own consumer-facing product are growing, with traffic up 225% in the last six months to pass 1 billion requests per month.
Still, given that part of this deal involved a £1 million loan, it's unclear whether that existing business was providing lucrative enough returns, or at least enough to help the company fuel its next stage of growth. UBC notes that in 2012 7digital's revenues were £11 million ($ 18 million), compared to £3 million ($ 4.9 million) in 2009, making it about four times the size of UBC, with a combined valuation of about £50 million ($ 80 million). Before today, 7digital in total raised some $ 18.5 million in venture funding, with other backers including Balderton Capital (formerly Benchmark in Europe) and Sutton Place Managers.
In fact, Drury, who is also a co-founder at 7digital, notes a few reasons for tapping UBC instead of going it alone. First, there is funding: with 7digital founded in 2004, it's not really playing in startup territory anymore. “We may call ourselves that, or others may call us a startup, but we've been around for almost 10 years,” he told me in an interview.
Second, there is speed of execution: “Going on to AIM by way of a reverse takeover of UBC is a way to accelerate our development,” he told me. “This is a faster path.”
Third - and perhaps most interesting for those watching how the digitalmusic space is evolving - is what UBC would bring to 7digital in terms of product. The company owns several patents, it has an extensive catalog of audio archives, and it has infrastructure in place to create original content - “a skillset that could be adapted for the kinds of customers that we work for,” Drury noted.
What could that mean? Right now, he says, the buzzword in digitalmusic is “curation” and how to whittle down and shape the huge mass of music that customers have at the tips of their fingers but without much shape about what to listen to next. (Yes, the old water, water everywhere conundrum.) It sounds like what 7digital might be looking to do is help produce original content, or at least services that help point users to more tailored listening experiences that cut through the 7digital catalog.
His example: UBC currently produces a show for BBC Radio, called “Pick of the Pops,” which picks a year and then runs through music from it. “Imagine that strong editorial role being adapted for the on-demand age,” he told me. Along with that will come an evolution of the streaming music business model to offer more targeted “microsubscriptions” around particular genres or even playlists - not unlike the vision that Deezer is also eyeing up, creating deals that cut up the typical $ 10/month, all-you-can-eat offerings.
“Our platform and partnership roster has been growing steadily over time and we see continued interest in music globally, across online radio, subscription streaming, and downloads. We will continue to develop and scale the platform, and to innovate with new products and features,” Ben Drury, CEO of 7digital, noted in a statement. “Radio, in particular, is an area where we see a lot of future opportunities, and we are thrilled that our new strategic investor and partner, UBC, shares this vision.”
UBC says that the deal will play into a wider strategy that it has to develop more digital services around audio content, with the interactive media market offering “the best opportunity for growth as so-called 'connected' devices became more important for the consumption of content.”
UBC and 7digital's non-legally binding Letter Of Intent says that the two will outline terms of a potential acquisition of 7digital by UBC by no later than December 16, 2013, “with a view to entering into a definitive sale and purchase agreement by 30 April 2014.”
UBC says the new publicly-listed company would combine its existing UBC assets, its investment in Audioboo, and 7digital, with 7digital's Drury would become the CEO and UBC's CEO Simon Cole taking on the role of chairman. Customers would include the BBC and Yahoo (two of UBC's current clients) and Samsung and HTC (two of 7digital's), with business operations in 42 countries and covering 5 million registered users and services pre-loaded on 60 million mobile devices. “In content terms, the new company will have an archive of thousands of hours of entertainment programming, producing 1,200 hours of new material a year and have a licensed catalogue of 25 million music tracks and audiobooks,” UBC notes.
Updated throughout with comments from 7digitalCEO Ben Drury.
When EMCCEOJoe Tucciaddressed a crowd of 15,000 attendees at EMC World last year, he made a somewhat startling prediction: a number of today’s computing giants won’t survive the current period of disruption.
The Voxel platform allowsdevelopers to run their apps in the cloud, which in turn allows users to interact with apps without installing them. The company is pitching this as a new way for developers to advertise their apps (so a user can play a game before being asked to download it). The technology could eventually be used for other purposes, such as virtualizing enterprise apps to protect sensitive data.
Co-founder and CEO David Zhao (formerly the CEO of ZumoDrive-maker Zecter, which was acquired by Motorola Mobility) told me that since the initial launch, Voxel has attracted interest from a number of ad networks and publishers, though he couldn't announce any new deals. (The company has already announced partnerships with RTB.com, AppSponsor, PlayHaven, and Quixey.)
Zhao did say that the initial interest made it clear that it was important to support both iOS and Android apps: "Everybody that we're working with has a presence on both iOS and Android." He argued that most developers prefer to try new ideas on Android first, since they don't have to wait for Apple's App Store approval process.
Voxel now says it can both virtualize Androidapps and, through a new Android software development kit, allow developers and ad networks to stream the virtualized apps on Android. Apparently, the main challenge was dealing with the fragmentation of the platform - the fact that Android is running in so many versions on so many different types of devices.
"It's a slightly higher latency on Android than iOS," Zhao added. "That's mostly due to the architecture of the two operating systems and how they handle video and audio. But it's not that noticeable to the end user."
Zhao demonstrated a few apps for me (via Skype), and it did look liked they'd achieved the same speed and responsiveness that the the company had already shown on iOS.
Tel Aviv-based website builder Wix successfully debuted on the Nasdaq today, raising $ 127 million by selling 7.7 million shares at $ 16.50 each, the top end of its intended pricing range. The stock popped briefly above $ 17.50 before settling back down $ 16.46.
That price values the company at about $ 750 million.
“It feels amazing,” CEO and cofounder Avishai Abraham emailed me from the floor of the exchange. “It’s a great day for Wix and I’m so grateful for our amazing team and the hard work that’s led to this day.”
Wix, which has 346 employees in Israel and 59 in the U.S., makes site templates and small, modular web apps that individuals and small businesses use to build inexpensive websites without coding. It has a freemium go-to-market strategy, and currently has over 40 million users in 190 countries, 680,000 of which are paying customers.
The company has had 14 consecutive quarters of growth, but has yet to turn a profit, with a loss of $ 17.8 million in the first nine months of 2013 on revenue of $ 55.5 million.
“It’s important to think long term,” Abraham said. “Wix is a market leader with a great team, and amazing products. We’ve had tremendous growth over the last year, and considering that our 40 million users amount to less than one percent of the potential market, we have incredible growth potential.”
In spite of the fact that the sites are built with pre-made components, this is no Geocities — Wix sites can be elegant and usable, if somewhat formulaic. The company publishes with the latest HTML5 technology, and offers free hosting, which users can upgrade to their own custom domain.
Most of the company was primarily owned by its investors, with Bessemer Venture Partners, Mangrove Venture Partners, Benchmark Capital, and Insight Venture Partners owning more than 75 percent of Wix.
“Wix is hugely significant. It demonstrates that you don’t need to be in Silicon Valley to build a great company and validates once again the ‘high risk/high return’ nature of European Venture Capital,” Mark Tluszcz, CEO at Mangrove Capital Partners, said in a statement.
Wix is significant, in part because Israelicompanies often get acquired rather than IPO’ing, as founders de-risk and take the cash offered by large American corporations such as Google, Apple, Intel, and others. Abraham didn’t know if Wix was going to start a new trend, however:
“We’re proud to be part of the Israeli start-up community and of the tech creativity and innovation it’s known for. There are many amazing Israeli companies, and if we can help provide a model for how to scale and go public, than we’d be thrilled. But what’s more important is that each company choose the path that best suits its own particular needs.”
As it approaches its fifth birthday, Kickstarter's star continues to rise, as the indie crowdfunding goliath announced yesterday that five million people have now collectively pledged nearly one billion dollars to its crowdfunding projects.
Today, in a somewhat surprising turn after yesterday's milestones, it appears that an impromptu version of the “Management Shuffle” will be rolling into Kickstarter. In a blog post today, Kickstarter co-founder Perry Chen announced that he will be stepping down from his role as CEO and will instead assume the role of chairman beginning January 1st.
Chen explained that the move will give him more time to pursue his own creative projects: “I'm looking forward to stepping away from the day-to-day to consider our path from a new perspective … [and] I'm also looking forward to having time to work on creative projects of my own, after all these years working on an engine to support them.”
But Chen isn't the only co-founder to depart as part of the company's management shuffle. Charles Adler, who “has long been itching to move with his family back to Chicago,” is also planning to leave his day-to-day role at the company and will assume the role of an adviser.
In Kickstarter's version of the management dance (we're still waiting for the music), when two co-founders step back, one must step forward. With Chen and Adler set to depart, Yancey Strickler, who has held a number of roles within the company, with community, communications and customer service among them, will be taking the reins as Kickstarter's second CEO.
Considering that its leadership has remained largely unchanged over the years, the Management Shuffle represents a significant change for Kickstarter. Usually, when companies undergo signficant changes to its founding leadership team, it's not a good sign. These kind of moves always produce speculation and a few worried looks, but Chen assured readers in his post today that the move shouldn't have any impact on the company itself - or its mission.
In fact, Kickstarter PR Chief Justin Kazmark tells us that Chen plans to stay involved, both in company projects and by supporting Yancey in his transition to CEO. Instead, by assuming the role of Chairman, Chen is looking to use the position to gain a new perspective on the company's trajectory and plans to spend a significant chunk of time focusing on the big picture and keeping Kickstarter close to its core mission.
In fact, Union Square Ventures co-founder and early Kickstarter investor Fred Wilson sees Chen's fingerprints all over the impromptu management shuffle. Reflecting on the changesin a blog post today, Wilson quipped, “like all things that involve Kickstarter, this is a classic Perry move.”
The company and its CEO have always marched to their own drummer, and Kickstarter's Management Shuffle is yet another example of this freewheeling mentality, Wilson explains. While its expected that the company's investors would look to temper speculation and air on the side of its founders, Kickstarter has given them plenty of very legitimate reasons to do so. To illustrate the point, Wilson described the long-timeCEO as an entrepreneur that was very “wary of taking money from VCs … and had no intention of taking the company public and no intention of selling it,” and was determined to put creators first.
Although he was initially skeptical of the founder's motivations, they decided to invest anyway. Over time, the investor said that Chen ended up proving him wrong, and his perspective ultimately led to just as much, if not more, value creation - a model which remains in place today:
Four and a half years after launch, Kickstarter is a very important and sustainable business. It will continue to grow, it will continue to fund creativity, and it will continue to do things its own way. Kickstarter was built in Perry's mold and the unique culture and mission of the Company are derived from him. I suspect his decision to step up to Chairman and allow the team to run the business day to day is Perry's way of saying to the team that they have his confidence to lead Kickstarter into the future. Kickstarter will always be Perry's work and we are very happy to be a part of it and be inspired by it every day.
Ultimately, considering Kazmark also tells us that Kickstarter is in the process of expanding to Canada, Australia and New Zealand, as long as the company can continue to represent the interests of creatives and creatively-inclined entrepreneurs as the shift to a Maker Model (and its own expansion into new markets) continues, it will be on the right track. Assuming these managementchanges go as advertised, of course.