The Mobile Startup That Almost Shutdown Is Now On Nearly 1 Billion Devices. How Did They Do It?

This post originally appeared on Forbes.com.

For every mobile app valued at over $16B, there are hundreds if not thousands of their failed counter parts. But while some of these apps die off, some of their companies figure out a way to survive and in some cases, create real value by reinventing their businesses. Andrew Levy, Rob Kwok and Jeeyun Kim are one of the best examples of this transformation, and this is how they went from a broken mobile app to a dominant player in the mobile enterprise space. Here is a 6 part breakdown of how they went through that transition and attracted some of the best investors, customers, and ultimately achieved market penetration of nearly 1B devices worldwide (and counting).

Now for some disclosure(s): #1. I am a shareholder of Crittercism. #2. I’ve known Andrew my whole life.

Part 1. The Beginning And The End
In 2010, Andrew, Rob and Jeeyun started out by building their own mobile apps however they quickly realized that those apps had their own set of performance problems. They were slow, they were laggy, and they had a smorgasbord of bad reviews in the app store. Certainly not a great way to start a company. Like any good engineer would do, they problem-solved and asked a simple question: how do we fix and diagnose these issues more easily?

Part 2. The Pivot
They decided to build a lightweight version of a crash reporting tool that they desperately needed for themselves and after speaking at a few meetups about their new tool, they began to validate their idea with others people in similar shoes. They realized that the lack of transparency for understanding mobile app performance was a very big and far reaching problem.  Although they knew they were on to something, they wanted to be sure they were solving a “hair on fire” problem.

Part 3. Proving The Pivot Is Worth It
In order to prove that this opportunity was really worth their time, they also created a landing page with a beta signup list that attracted a significant number of signups. This validation was important because they were bootstrapping and running out of money. Andrew told me that he literally had a spreadsheet with a list of jobs on it and was contemplating the end of the business altogether.

Part 4. Getting The Right Resources
Once they had a working product, Andrew and the team applied to an incubator called AngelPad, which was founded by a bunch of ex-Googlers. As a result of their quick iterations and early traction, they were able to get into the program. This provided the team with some much needed capital and social proof which helped them focus and lay the foundation for a much bigger business.

Part 5. Focusing
The first version of Crittercism was focused on two things: crash reporting and user feedback (you can think of it like an in-app support forum). They thought this solution was one product but after a closer look, they realized it was actually two separate offerings. The crash reporting side was growing much quicker then the support side, and the fact that Andrew, Rob and Jeeyun come from engineering backgrounds made it even more evident that this is where they should be focusing their time and energy. Again, the team shutdown part of their business and it freed them up to focus on their core strengths.

Part 6. Scaling
By building out a solid crash reporting tool, the team was able to wedge themselves into the mobile enterprise market. But now they are going after a much broader opportunity for mobile app performance management (mobile APM). It was the most visible, relatable problem that every one of their potential customers faced. As a result, the team was able to quickly attract large enterprise customers like Netflix, and parlay those initial use cases into a portfolio of new customers.  Today that portfolio is growing by leaps and bounds. The Crittercism software is now installed on approximately 1 billion devices and analyzes all aspects of a mobile app’s performance.

That’s not bad for a company that almost closed up shop and it serves as a good reminder that not everyone needs to be the next WhatsApp, and that pivoting, if done correctly, can lead to big opportunities.

How Retail Is Evolving In An On-Demand Economy

This post originally appeared on Forbes.com.

It’s been widely discussed that Amazon plans to enter the brick-and-mortar retail game. This is ironic because it is Amazon that put many brick-and-mortar retailers out of business in the first place. Circuit City, Borders and Blockbuster all succumbed to the dynamics of e-commerce and companies like Barnes & Noble, Sears and K-Mart aren’t too far behind. Big box retailers carry fewer product lines and holding inventory presents significant risks. Consider that in the last four years, cumulative sales of brick-and-mortar retailers shrank by $30 billion and as Jeff Jordan rightly points out, “these trends are only accelerating.”

In the past, brands would have to fight for shelf space and customer access and that gave power to the larger retailers.  Today, anyone with a product and a website can build their own sales channel and that is creating enormous shareholder value for the digital players. This creates a new set of challenges for brands and retailers.

On one hand, building an online-only business has cost and distribution advantages. There is no need to invest in large amounts of inventory and you aren’t subjected to retailer buying terms or expensive overhead for rent. This is a large reason why companies like Bonobos and Warby Parker experienced success early on and why many brands looked to copy the online-only model.

On the other hand, having a physical presence has proven to drive sales with meaningful volume and be an effective channel to reach new customers. Take Quirky as an example. The company claims that brick-and-mortar retail partners are key to Quirky’s success, driving 85% of the company’s revenue, with the rest coming from online sales through Quirky.com, Amazon, ThinkGeek, Fab.com and other e-sellers.”

So the challenge becomes this: how do businesses leverage the benefits of a physical store while removing the challenges that are destroying brick-and-mortar retail?

One startup company thinks they’ve solved this problem by taking inspiration from successful businesses with marketplace dynamics like Airbnb. In just nine months, a startup called Storefront has created one of the largest online marketplace for brands, artists and designers that are in need of temporary retail space. This model allows brands to create engaging, physical experiences without taking on the overhead of long term leases that are putting so many retailers out of business. Imagine a future in which Fitbit is sold in gym lobbies across the U.S., IKEA is on college campuses during move-in week, and the hottest Kickstarter campaigns are available for pre-order or purchase at Best Buy.

UNIQLO Pop-Up store at Union Square station
UNIQLO Pop-Up store at Union Square station (Photo credit: MTAPhotos)

Nick Roberston, CEO of the fast growing ASOS is thinking along these lines as well. “Being a digital fashion brand, it is important we never lose a digital element to what we’re doing, however based on consumer reaction and participation, I think we will be looking at more new and innovative ways we can get our brand in front of the customer for a physical experience in the future.”

Will a company like ASOS use Storefront? It’s very likely. Hundreds of brands have opened their own store and generated millions in sales revenue. And when you consider that 80% of all economic output takes place in urban areas, it further validates the idea that having a cost-effective physical presence makes a lot of sense.

From the New York Times, “whenever a city doubles in size, every measure of economic activity, from construction spending to the amount of bank deposits, increases by approximately 15 percent per capita. It doesn’t matter how big the city is; the law remains the same.” NYT

That law is quite compelling and Jeff Bezos knows it is. It’s perhaps part of the reason Amazon is opening a distribution warehouse in the densely populated tri-state area and why Jeff is quoted as saying that  “We [Amazon] would love to [do physical retail], but only if we can have a truly differentiated idea.” Being closer to the customer creates better experiences and improves economic efficiencies. In the case of retail, maybe the “differentiated idea” is simply about getting to your customers, quicker, cheaper and more intimately than anyone else and having an on-demand storefront seems like a pretty powerful way to do just that.

Follow me on Twitter at @DanReich.

Bitcoin And The Two Things You Need To Know

The bitcoin logo
The bitcoin logo (Photo credit: Wikipedia)

This post originally appeared on Forbes.com.

The discussions that are happening around Bitcoin feel a lot like those from the early days of the internet. It’s like when my parents asked me about AOL dial-up. “Who is the computer calling? Now the questions are, “what are these Bitcoins and can I see what one looks like?”

I discussed this topic with a handful of Bitcoin entrepreneurs and Bitcoin investors and so I figured it made sense to lay out some high level thoughts on Bitcoin for my own sanity and hopefully yours. To start, I think there are two important ways to think about Bitcoin.

1. Bitcoin as a currency.

2. Bitcoin as a technology.

Bitcoin as a currency.  Like all things throughout history, we know that change is inevitable and currency is no different. Once upon a time forms of money included cattle, salt, shells, and precious metals. As time went on the world evolved and so did the currency that went along with it.

As Thomas Friedman would say, today the world is flat. Our telecommunications make it dead simple to communicate and transact with anyone, anywhere around the world at any moment in time. In short, Bitcoin is a new currency that was designed for this new world. In this video, Eric Vorheese does an excellent job explaining the evolution of money and why the characteristics of Bitcoin, as compared to gold and our dollar, make Bitcoin such an intriguing form of currency for a digital world. That analysis look something like this:

Scarce? Convenient? Secure? Central backing?
Gold Yes,there is only so much of it in the earth. No,it’s very heavy. Kindof, depending on where you store it. No, no single authority owns gold.
US Dollar No, the government can print money, which they often do (inflation). Yes, its lightweight paper. No, it can be counterfeit. Yes, the government provides its full faith and credit to the US dollar.
Bitcoin Yes, only ~21M bitcoins will ever be created. Yes, it’s digital. Yes, it’s secured by math puzzles that only super computers can solve. No, like the internet, it’s not owned or controlled by any single entity.

Only time will tell if Bitcoin can survive as a currency but fundamentally, it makes sense to me that there should be a currency specifically designed for a hyper connected, digital world.

Bitcoin as a technology. To fully understand what Bitcoin can mean as a currency, you must also understand how it works at the technology layer. This video does a nice job explaining the technicalities of Bitcoin, but the core innovation of Bitcoin is that there is a public ledger that is very secure because of some complicated math. Albert Wenger of Union Square Ventures describes it this way:

At the heart of bitcoin is a fundamental innovation: a distributed public ledger. A ledger in accounting is a book that you cannot edit once you have written in it. Instead, if you have made a mistake, the only way to fix it is to add another transaction to the ledger that undoes the error. As we know from accounting fraud, problems arise when people figure out ways to transact without recording it in the ledger or making ex post changes to the ledger (this is why Quickbooks isn’t really an accounting system). The bitcoin ledger is the so-called blockchain which uses the fact that there are many copies of it that are broadly distributed combined with a fair bit of math to ensure that once a transaction has been recorded in the blockchain that transaction can not be changed after the fact. There is no other widely used protocol in the world today that accomplishes this: with bitcoin anyone can make a statement (a transaction) and have this be recorded in a globally visible and fixed ledger.

Years ago, information was controlled and distributed by single entities. This is why media conglomerates and newspaper companies were so powerful. When we talk about how the internet disrupted those companies, we are really saying that new protocols created the disruption. The protocols provided a way to send and receive instantaneous information without anyone’s permission. The protocol behind Bitcoin is providing the same type of disruption only instead of sending information without any third-party involvement, we are now able to send money without any third-party involvement. In essence, we are democratizing money and rewriting the rules for how commerce can be conducted.

This creates a tremendous amount of opportunity. Naval Ravikant, CEO of Angel List published a piece in Wired magazine about the future possibilities of Bitcoin. Here is a clip:

 Just as the web democratized publishing and development, Bitcoin can democratize building new financial services. Contracts can be entered into, verified, and enforced completely electronically, using any third-party that you care to trust, or by the code itself. For free, within minutes, without possibility of forgery or revocation. Any competent programmer has an API to cash, payments, escrow, wills, notaries, lotteries, dividends, micropayments, subscriptions, crowdfunding, and more. While the traditional banks and credit card companies lock down access to their payments infrastructure to a handful of trusted parties, Bitcoin is open to all.

So will this Bitcoin thing work? Is it a good investment? Should you buy some Bitcoins?

I have no idea. But what I do know is that this feels very much like the first time I signed on to AOL and that to me is very exciting.

It’s a new world.

Startup CEO: Would You Max Out Three Credit Cards To Start A Business?

Image representing Alec Lynch as depicted in C...
Image by None via CrunchBase

This post originally appeared on Forbes.com.

Would you max out three credit cards, spend your life savings, and take on loans from family and friends all for some cool website idea? In January 2008 Alec Lynch did just that and started a freelance marketplace in his garage called DesignCrowd.

Today, Alec and his team announced a new round of financing putting the company’s total fundraising to date at $6.3 million. Back in March, I was able to spend some time with Alec to hear about how he took his small garage-based startup from Sydney Australia and $60,000 in debt, to multiple locations worldwide and $1 million per month in revenue.

Dan Reich: What were you doing before DesignCrowd?
Alec Lynch: I studied Bachelor of Information Technology at the University of Technology, Sydney (UTS).  I loved it and did well academically (I was awarded a $36,000 scholarship and the University Medal).  When I graduated from UTS I was 20 and started my first business with a friend from UTS (Adam Arbolino who studied a Bachelor of Science in IT).  Our business was online CRM software and, while it ultimately failed, we learned a lot of good lessons.  After this, I went to work in strategy consulting at Booz & Co where I worked for 2 years.  While I was there I had the idea for DesignCrowd.  In 2007, a few weeks after scoring a promotion, I quit my job at Booz and moved back home to live with my mum and start DesignCrowd.

Reich: What gave you the idea for DesignCrowd?
Lynch: While I was working in strategy consulting at Booz I was constantly looking at different industries.  I had a personal interest in the design industry, as I’d been building websites since I was 14 and I could see three key problems in the traditional design industry: for small businesses buying design it was 1) slow 2) expensive and 3) risky (you never knew what you were going to get back).  One example that highlighted these problems for me was the release of the London Olympics logo in 2007.  It cost £400,000, took one year to make and was absolutely panned by the public and the media.  I thought to myself  “wow, imagine if they had run a global design contest for £40,000 or even £10,000?”.  I knew they would’ve received thousands of designs and ideas from around the world and saved half a million dollars.  At the same time, I could also see a lot of friends graduating with degrees in creative disciplines but struggling to find work.  Essentially, I could see the dynamic for a marketplace that could disrupt the traditional design industry.

So is Alec and his team disrupting the traditional design industry? According to Techcrunch, “the company currently has over 250,000 registered users in 197 countries, including 100,000 designers and says it recently hit $12 million in design projects through its site, a figure that it expects to exceed $20 million in 2014.”

When I asked Alec back in March what his ultimate goals were, he said “our goal is to pioneer crowdsourcing around the world.”

And with the latest round of financing of another $3 million it looks he is one step closer to that goal. Not bad for someone that maxed out three credit cards and moved back home wit his mum to start some nifty website called DesignCrowd.

Startup CEO: How To Build A Double Sided Marketplace In the Fashion Industry

Textile Supplier with President George W. Bush

This post originally appeared on Forbes.com.

Websites like eBay and Amazon have transformed the way people buy and sell products. With a current market cap of $68B and $151B respectively, it’s clear that efficient and highly engaged marketplaces between buyers and sellers can provide real value to both parties.

A new NYC based startup realized the same marketplace dynamic could be applied to a different part of the retail value chain, and in a very specific but necessary category: textiles. Until recently, textile suppliers from around the world had no way to conveniently sell their products in a global marketplace.

I caught up with Benita Singh, the CEO of Source4Style, to learn more about how she is building an online marketplace for a very interesting but critical part of the fashion business.

Dan Reich: There are hundreds of online marketplaces in existence today. Alibaba.com is one example. When did you realize there was a need for a textile marketplace?

Benita Singh: Throughout my career, I spent a lot of time at trade shows, on expensive sourcing trips and even on sites like Alibaba. And it wasn’t unusual for a two-week sourcing trip to India to result in finding only one new supplier. So I learned early on that it was a highly-fragmented market.

At the same time, many of my “best finds” were suppliers that didn’t showcase at the biggest trade shows. And their online presence was limited to a three-page static content site.

We then started to do some research on the market opportunity. In one of our surveys with independent designers, we heard that they spend up to 85% of their time sourcing and navigating the complex textile supply chain. And among the larger fashion brands, we saw that since 2008 travel budgets on the production side of the business were dropping. Couple all these industry trends with the rise of B2B marketplaces and we saw a clear opportunity.

Reich: Any entrepreneur that has built a double-sided marketplace will tell you how hard it is. How are you building both the supply and demand for Source4Style?

Singh: At the beginning, we focused exclusively on building up the supply side of the marketplace. In our case, that was getting a critical mass of textile mills onto the platform. Within three months, we were working with suppliers in over 30 countries. We learned that we must have a baseline of supply before we could go to the demand and start the engine.

We’ve also learned that the two sides of your marketplace may very well have two very different reasons for wanting to be part of your platform. For our buyers, it’s about discovery and access. They want to be able to replicate the inspirational experience of walking a trade show floor 365 days a year, and that’s how we present Source4Style to them.

Our suppliers on the other hand want a more practical tool to help them streamline their leads, follow up with potential buyers and track conversions from sample requests to purchase orders.

It’s critical to learn the value proposition for each side of your market. For our buyers, we have to effectively merchandise and market. For our suppliers, we have to really focus on building a great SaaS platform for them to help manage their global business.

Finally, your influential first adopters can help you grow both sides of the marketplace. Some of our buyers bring their suppliers onto the platform because they want to use Source4Style to manage all of their sourcing. These buyers are also offering case studies that are inspiring others in the industry to give us a try.

Reich: You had to build a global business pretty quickly. What challenges did that entail and how did you overcome them?

Singh: Sourcing is inherently global, so yes, we had to become an international business pretty immediately. Operationally, we built a dynamic platform that allows buyers and sellers to confirm final pricing before proceeding with a purchase order. This accounts for currency fluctuations in the 36 countries where our suppliers are now based. We also brought on local agents in key markets like India and Italy who help us to both onboard new suppliers and ensure that their collections and data are kept up to date.

We have a global market on the buy side as well. And with a small team, we have to provide top-notch service around the globe. This isn’t easy and it means our phones are ringing around the clock. But I consider it the best incentive to grow quickly and intelligently!

Our next steps are to translate Source4Style.com and optimize our platform in key markets as well.

Benita’s work is paying off. In less than two years Source4Style has created a presence in over 76 countries. More recently, they partnered with The Council of Fashion Designers of America to provide their members with “concierge-level access to their comprehensive online sourcing marketplace.”

5 Tricks To Get Press For Your Business Or Startup

This post originally appeared on Forbes.com.

Celebrity Photographers at the Tribeca Film Fe...

So you spent a few months, perhaps even a few years, to develop the most cutting edge and revolutionary widget. This widget could be anything ranging from a new product or device to a new company or startup. The bottom line is that the development phase is completed and now it’s time to get the word out. You run through your marketing list. Social Media? Check. PR firm? Check. Paid Media? Check. Events? Check. As you run through the list you realize that it’s the same list every other company would put together. You think you have an extraordinary product or solution and yet, you’re plan is about as generic as they come. Having worked in the trenches as a founder and startup employee, I know firsthand what this marketing laundry list could look like.

But for the past few years I’ve had the opportunity to sit on the other side of the table as a contributor for various publications like Forbes, HBR, and other industry specific outlets. As a result, I’ve personally been pitched dozens of stories that are “game changing” or “disruptive.” What I learned is that most of these pitches are in fact, not “game changing” and moreover, some of the methods used to acquire the sought after press is shockingly abysmal.

But that doesn’t have to be the case. Here are some tips to avoid the generic PR trap and ways you can achieve meaningful exposure for your new widget or business.

Build a targeted list of writers and journalists. I was once pitched a story about a non-profit in Africa. While I love nonprofits and love Africa (although I’ve never been there), this type of story is one I’d most likely never write about. Spend some time to identify who the best writers are that are most likely to benefit from your story. Journalists are always looking for good, relevant content. Make sure your story aligns with their experience and area of focus.

Let the writers know you’ve read their work. Most people respond best when they are shown personal attention. Journalists are no different. When pitching your story, start with a personal reference to grab their attention. You can reference a previous article they wrote or mention a past achievement:

“Hi Dan, I thought your last article on startups was …”

This will demonstrate that you were thoughtful and respectful of the person’s time. Check out their profiles on Twitter, Facebook, and LinkedIn. Do some homework first.

Pitch a story, not your company or product. If you are looking for press coverage it’s because you want a broader audience to know about your product or service. To do this, try to tie your company or product to a hot trend in current events so that it becomes relevant to a broader base. For example, one recent company I covered was building a new home security system. Instead of pitching me on their product, they pitched me on the fact that they raised over $180,000 on their own crowd funding site during a time when crowd-funding was getting a lot of attention. The story was how they raised money. The result was more coverage for their company.

Don’t hire a PR firm to do it. I respect the hustle of people trying to make their business grow. So when I get an email from a hired PR shop, I think to myself, why didn’t the founder of the company send me the note instead? If press is so important to them, why push it off to someone else? Steve Jobs for example would personally spend time, lots of time, chatting up the press. Be like Steve. Spend some time curating relationships with those that can help amplify your message.

Make it exclusive to that journalist. Journalists love exclusive stories because in the world of content exclusivity is a competitive advantage. When trying to get press coverage, let the journalist know that you will make your story available to them and them only. This will create more motivation for that person to write a story about you.

When it comes to press coverage just remember that journalists are people and not robots that crank out words in publications. If you can craft a story that is unique, adds value to a specific journalist, and can convey the message in a personal and respectful way, then it’s a win-win for everyone involved. The journalist will get a great story to write and you will get some nice exposure for your new shiny object.

A Student – Learning, Living at the Intersection of Business + Technology + Innovation + Culture.