Friday, 31 January 2014

These Geographically Accurate Subway Maps Reveal Where Trains Really Go

These Geographically Accurate Subway Maps Reveal Where Trains Really Go
Jan 31st 2014, 15:00, by Sarah Zhang

These Geographically Accurate Subway Maps Reveal Where Trains Really Go

It's no secret that subway maps are mere approximations of geography. Designed for maximum readability, they map the subway system onto stylized curves and evenly spaced stops. Still, the images of these familiar maps distorted by geographic accuracy are more striking than I even imagined.
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The Complete Quantitative Guide To Judging Your Startup

The Complete Quantitative Guide To Judging Your Startup
Jan 31st 2014, 14:00, by Danny Crichton
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Raising capital from investors is often a frustrating experience. While part of that frustration will always be present when working on high-risk projects, a lot of the aggravation comes from the lack of clear signposts that allow founders to judge their company’s performance. The reality is, most founders only ever hear a “yes” or a “no” from a venture capitalist, without a lucid understanding of the factors that influenced that decision.
There have been fantastic essays written about the fundraising process itself, such as Paul Graham’s guideposted last year. This post is not a guide to fundraising, but rather a look behind the curtain from my own experience as a venture investor at most of the quantitative metrics that are analyzed when judging an early-stage startup.
These metrics fall into five groups: financial, user, acquisition, sales, and marketing. While the statistics are important, the relevant weight any one metric will hold in a VC’s decision will depend on the type of startup, as well as the VC’s own opinion about which metrics matter and which do not.
When possible, I give guideposts on how to judge a particular value. These are from my own experience analyzing and engaging several hundred startups over the past two years, and all of my personal biases are certainly present. As with any guidelines in the venture business, companies break rules and expectations all the time.

Financial Metrics

Finances are crucial for any startup, and some companies are indeed funded by venture capitalists simply for having a great balance sheet and statement of cash flows. While this post could be a tutorial on the principles of accounting, I want to zoom in on a handful of key metrics.
Monthly Revenue Growth
Take the current month’s revenue, subtract last month’s revenue, and then divide by last month’s revenue.
One surprise for me is that this number is used more by founders than venture capitalists. The reason is that it shows proportion without magnitude, and magnitude matters a lot because a startup’s revenue is a major determinant on what the growth rate can be. If you made $20 last month, you need to increase that to $30 to get a 50 percent growth rate. That might be a single customer. But if you have a $10 million per month revenue business, reaching the same growth is significantly more challenging.
While VCs don’t use this metric as heavily as the next one we will discuss, some guideposts are still helpful. A growth rate of 40 percent per month is very good. A growth rate below 40 percent can be considered good if you can convince an investor that additional capital placed in sales and marketing will drive the growth rate higher.
Revenue Run Rate
Take the revenues recognized in the most recent month and multiply by 12.
shutterstock_163179656-300aVCs often talk about the current revenue run rate as well as the projected run rate in 12 months. So they will say something like “The company is currently at a $2 million run rate, but will be $10 million by the end of the year.” These numbers are often preferred, since they solve the magnitude problem.
Furthermore, almost all startups at the early stage are going to have to raise further capital. So when evaluating a startup, VCs are thinking about where the business has to be in 18–24 months when the next fundraise will happen. Getting a sense of the projected revenue run rate allows us to surmise whether series B or C growth investors are likely to be interested in a company. Thus, great performance is a revenue run rate that allows the next fundraise to happen. To get that number, reach out to investors and other founders until you have a good handle on the trajectory needed for your company.
Margins
Gross margin is calculated as total revenue minus the “cost of goods sold” divided by the revenue. Net margin is similar, except we also subtract the total expenses of the business as well (except for taxes and a handful of other accounting line items).
Margins are important because they show the ability of your startup to spend venture capital and get significant return. There are pretty bright guidelines on what your margins should be given an industry. For example, cloud storage and services companies can reach margins in the 90s, SAAS companies and other software businesses tend to be in the 70s, and hardware companies often struggle to get above 40 percent. Again, research your space until you know exactly what this metric should look like for your particular business.
One additional consideration is margin compression. Margins become tighter when competition is greater, so successful businesses must develop defenses against new entrants who might force a company’s margins lower. I personally have seen dozens of startups fail to receive funding because they could not articulate a strategy to avoid margin compression.
Burn Rate and Runway
This is the operating loss per month. To calculate runway, take the amount of available capital and divide by the monthly burn rate to get the number of months until your start-up runs out of cash.
These numbers show the efficiency of a business, the timeline for fundraising, and the need for capital. While startups are often run quite cheaply until their first fundraise, VCs will want to understand how you will increase your expenses to grow the business more quickly with any new infusion of capital. Lest anyone get the wrong impression, most investors expect their entire investment to be spent within 18–30 months. So if you’re asking for a fundraise of $10 million, but your monthly burn rate is $100,000, you must develop a very clear plan on how the burn rate is going to increase, and how that will propel the growth of the business.

User Metrics

Users are the lifeblood of any company, and therefore, VCs assiduously analyze everything about a startup’s users. Some user metrics are well-known, including daily active users (DAUs) and monthly active users (MAUs). I am actually going to skip those and instead will focus on a couple of other metrics that provide keen insight into a startup’s quality.
K-Value
Choose a time frame, such as one week. Take the number of users at the beginning of the week as a base. Now, track all invites that these users make to other people (for example, using an “Invite Your Friends” link). Aggregate the number of new users entering through this channel and then calculate the ratio of new users to old users and add 1. So, if you start with 1,000 users, and they bring on board 200 new users, we have a ratio of .2 + 1 (our base population) and that leads to a k-value of 1.2.
The k-value is a measure of virality, and is borrowed from epidemiological studies of disease progression. This number is exponential, and defines the magnitude of the user growth rate by word of mouth (as opposed to paid acquisition). For social media startups, this is often the only metric that matters (the other is retention).
Thankfully, there are some clear guidelines for performance. A value less than 1 means that the population is dying and will cease to exist. A value of 1 means that the population is stable. A value of 1.2 is strong, and a value of over 1.4 means incredible growth.
If you start with 1,000 users and have a k-value of 1.2 per week, after 30 weeks you will have about 200,000 users. But if you have a k-value of 1.4, you will have more than 17 million users within the same period. Growing at such a speed usually doesn’t last long, since old users are not as likely as new ones to bring additional users to the product (they already invited everyone!). However, some companies like Facebook and Snapchat have exhibited extremely high growth like this for an extended period of time, so it is certainly possible.
Proportion of Mobile Traffic
Take the number of visits from mobile and divide by the total number of visits to your product.
This is a simple ratio, but an important one in a world where more and more of our time is spent on mobile. Nearly every company that targets consumers and talks to an investor today will have to discuss their mobile strategy. Data today shows that people are potentially spending a majority of their computer usage on mobile devices. Engaging such users is crucial today.
Cohort Analysis and Churn
Take all of the users who joined a product in a given time frame (usually a week). Then calculate how many of these users engaged with the product over every successive week. Churn is slightly different and is calculated by taking the number of users who leave and dividing by the number of total users (regardless of start time).
Cohort analysis is a metric by which we see the decay in user engagement. Users leave even the most sticky products for any number of reasons. For instance, small and medium businesses may leave your product because they are shutting down operation. VCs really like to see cohort-analysis tables, because they give us a perspective on when users are leaving the platform.
First-week retention is probably the most immediately interesting number. For social media, 80 percent one-week churn is very high, 40 percent is good, and only 20 percent is phenomenal. For paid products like SaaS, churn and other conversion metrics tend to make more impact here rather than pure cohort analysis. SaaS churn in the low single digits (1–3 percent) is strong.
Seasonality can be an important component to elucidating cohort analysis. Education startups often see their users return at the beginning of the school year as people think through their software choices. Be sure your story includes all facets of your cohort analysis.
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User Acquisition and Marketing Metrics

We know that users are important for a business, but they don’t often walk right through the door. Instead, companies have to exert significant resources to get users to sign up and potentially pay for the product they are selling. Thus, these metrics go to the core of a business model and its sustainability.
Cost of Acquiring a Customer and Payback
Take the amount spent on all forms of user acquisition (search engine marketing, content marketing, public relations, etc.) and divide by the number of new users within a given period. Thus, if we spent a total of $100,000 acquiring users, and we have 100 new users, we just paid $1000 per user (fully-blended).
This is the bread-and-butter of almost all subscription companies, but also applies to most other startups. While the fully blended number is interesting, it doesn’t give a venture capitalist a lot of information about the channels that users are joining from. Therefore, we often split this into paid and free channels.
Free acquisition is what it sounds like – someone started using a product without seeing an advertisement, perhaps through word of mouth, or maybe reading about it in the press. In contrast, paid acquisition is generally synonymous with advertising. If you spend $60 on Google AdWords and get one customer, you had a CAC of $60. We often express the number of free versus paid acquisitions as a ratio, since this can show if the growth of the user base is primarily organic.
There are a lot of signposts for CAC, almost all of them dependent on the type of business. In general, the higher the ARPU – average revenue per user – the higher the cost of acquiring a customer can be. In social media, this number needs to be as low as possible (and can be near zero if growth is purely viral). In e-commerce, great CAC prices are around $30–$60 per user. Acquisition prices above that are not uncommon, but they do require more diligence. Prices above $200 are pretty rare in successful online businesses. Then again, financial services often have CACs in the upper hundreds, so, as always, there are exceptions.
Another way to judge whether the CAC is reasonable is to calculate the payback time for a new user. In e-commerce, this is generally measured as the number of orders that need to be purchased to cover the cost of acquiring a customer. If the number of orders is one, that is fantastic – it means the customer is immediately profitable. For advertising-driven and freemium subscription startups, payback times of 3–6 months are good, and anything more than 18 months is likely going to be very hard to swallow.
Net Promoter Score
Run a survey among your customers asking how likely it is that they will recommend (i.e. promote) your product to other people on a 1 to 10 scale. Promoters are those who give an answer of 9 or 10, and detractors are those that respond with a 1 or 2. Calculate the proportion of both groups as a total of the survey population. The net promoter score is the proportion of promoters minus the proportion of detractors. Thus, if 50 percent of your customers are promoters and 10 percent are detractors, your net score is 40.
This is one of my favorite metrics. It shows how satisfied your customers are with your product and your overall experience. NPSs of 50 are considered excellent, and companies like Amazon and Google generally hover around such numbers. However, scores as high as 80 or even 90 are possible. Businesses that inculcate such fervency in its customers are highly valuable, and should raise capital easily.

Sales Metrics

So you want to have a company that has actual, flesh-and-blood customers? If so, then you are going to have to build sales channels to efficiently build revenue. These metrics are helpful ways to judge the success of those efforts.
Magic Number
Take the net growth of subscription revenue over two quarters, multiply by 4, and then divide by the total spend on sales and marketing. So if in Q1 we had $200,000 in subscription revenue, and in Q2 we have $400,000, and we spent $300,000 in sales and marketing in Q1, we would have $400,000-$200,000, which is $200,000 net growth, multiplying by 4, we have $800,000, and dividing by our expenses, we have a ratio of 2.66.
This is arguably the best-named metric here, and a favorite of Scale Venture Partners, which popularized it. Essentially what this metric calculates is our return on investment of spending a dollar on sales and marketing. For each dollar we spend, we get the magic number back in additional revenue. A magic number above 1 means that a company has found a way to scale sales and marketing to build sustainable profit growth. A number below 1 isn’t necessarily terrible, but it also means that the company is not scaling as efficiently as other companies.
Basket Size and Order Velocity
The average sales price (ASP) is the price of a typical order. Order velocity is the time it takes for a customer to make a repeat purchase.
For e-commerce businesses, these are among the most important metrics to calculate. ASP often drives the rest of a startup’s fundamentals, and so like run rate, acts as a clustering algorithm to quickly assess a startup’s business model for VCs. A high ASP generally means wealthier customers, fewer repeat purchases, more flexibility on the cost of acquiring a customer, etc. Order velocity also is influenced by ASP.
For instance, Uber is a low ASP, high-velocity e-commerce business, whereas One Kings Lane tends toward a high ASP but low-velocity business. There is no “best” answer regarding these metrics, but generally, the lower the ASP, the higher the velocity of sales needs to be to compensate.
Average Sales Cycle
Take the date that a customer is first contacted, and then the date that they make their first purchase. The difference is the sales cycle. Average across all customers.
Like ASP, the average sales cycle often determines a lot of the fundamentals of a startup’s business, and therefore tells us about how to think about a company rather than its performance. We tend to use average sales cycle for enterprise and subscription sales, whereas we use order velocity for e-commerce and other repeatable purchases. Sales to government and education institutions generally have the longest cycles, possibly two years or even longer. Sales to Fortune 500 businesses are shorter, generally 6–18 months depending on the product (for instance, software is easier to purchase than storage infrastructure). Converting a customer in a freemium model can take 18 months or more, but generally a cycle below one year is good.
Long Term Value
This is the total value of a customer over the life of that customer’s relationship with the company.
This metric is really well-known, so I won’t cover it in-depth. It works hand-in-hand with churn, since the length of the relationship is inversely proportional to the churn. Calculating this value tends to be really hard, and getting to a number that is actually comparable across companies is challenging. VCs often have to substitute more objective metrics like ASP to get to values that are more easily measurable. Nonetheless, this number is crucially important, particularly as a company scales for the long-term.
Chasing Money

Market Metrics

Startups are competing for the limited time and resources of customers. Understanding the size of a market and its composition is the final metric analysis, but also a key one, since it determines the potential ceiling in value for a company.
Total Addressable Market
This is the total amount of money spent in a startup’s defined space.
While incredibly important, there is a huge amount of fuzziness in any sort of market analysis. Startups may want to define themselves a certain way, and venture capitalists may have an entirely different market in mind when they analyze a startup.
Generally speaking, markets greater than $1 billion are good, and any market definition that uses the word “trillion” is likely to get a laugh from a venture capitalist. Often, describing the TAM is more an opportunity for a founder to demonstrate an understanding of their startup’s market than it is about actually getting a quantitative figure.
Average Wallet Size
This is a key metric for a lot of businesses, particularly enterprise companies. Average wallet size is the total amount that a single customer can spend in a given period of time for a category of services (i.e. its budget). This metric is important because it gives a sense of the financial capabilities of your customers, and it allows a VC to judge how expensive your product is relative to a customer’s appetite.
This number cuts both ways. Startups that charge a small amount compared to the average wallet size are just as risky as those that charge a very high proportion of the wallet size as their product’s price. You don’t generally want to be insignificant, nor do you want to be so large that you knock out an entire budget.

Conclusion

This essay is a crash course in the metrics used in the quantitative analysis of startups by early-stage investors. As I said before, every investor has their own approach, and every startup is unique. Guidelines here are general, and more specialized information from your specific space is always the most important benchmark by which to judge your startup’s performance.
I would like to leave with one important observation, and that is that one metric tends to drive the curiosity of a venture capitalist more than a complete set of decent ones. An incredible k-value by a social media company, an extremely short sales cycle in the Fortune 500, and an incredibly high net promoter score in e-commerce are just some examples of how a single metric can be the defining story of your company.
Finally, and perhaps most importantly, quantitative metrics are informative about various dimensions of a startup’s performance, but they are not conclusive proof of the worth of a startup. Dazzling products with superb design, strong teams, unique markets, and other areas are just as vital to the success of a business. Outstanding metrics are probably necessary to successfully fundraise (particularly today), but they are not usually sufficient to guarantee an outcome. Great companies are built from greatness, both quantitative and qualitative.
[Images via Shutterstock]

Box Said To Have Filed For IPO, Could Go Public As Early As April

Box Said To Have Filed For IPO, Could Go Public As Early As April
Jan 31st 2014, 13:13, by Darrell Etherington
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Cloud-based storage company Box is said to have filed an IPO, according to an initial report from Quartz, later followed up by confirmations from The Wall Street Journaland Forbes. It did so quietly, filing the paperwork recently (possibly at the beginning of this week), according to the reports, and also silently, something it shares in common with Twitter, and which is made possible under a provision of the JOBS act for companies that drive less than $1 billion in yearly revenue.
Box, which is often compared to similar service Dropbox (which raised $250 million at a $10 billion valuation recently), only just closed funding of $100 million in December, at a valuation of $2 billion. The timing of that funding round seems unusual, given the intent to IPO, but Forbes says that round was actually about lining up international investors and getting a new, stronger business portfolio to show off to Wall Street during the process of going public.
Unlike its competitor Dropbox, Box has a strong focus on enterprise storage and file sharing. This should help it produce more consistent quarterly results that a Forbes source tells that publication will reassure and please investors.
Originally, Forbes had reported that the IPO could take as long as until summer to become public and get underway, but a second source says the company is actually looking to go public as soon as April, if all goes well. A Box spokesperson had only the following to offer:
We don’t have anything to share at this time. We’re focused on continuing to build our business and expand our customer relationships globally.

New European Edtech Accelerator Kicks Off Search For 10 Startups Eager To Disrupt The Classroom

New European Edtech Accelerator Kicks Off Search For 10 Startups Eager To Disrupt The Classroom
Jan 31st 2014, 13:18, by Natasha Lomas
european edtech incubator
Another development in the European edtech ecosystem: early stage startups with a plan to disrupt education are being encouraged to apply to join a new incubator that will kick off its first programme this September.
The European Incubator for Innovation is currently accepting applications for its forthcoming 12-week programme. It’s looking for 10 startups to be mentored by education experts in a successive of European cities. Startups have til March 17 to apply.
The aim of the bootcamp will be for teams to go from proposal to prototype, testing it in classrooms or corporate learning environments along the way, while also sweating the details of their business strategy.
The Incubator is currently running a competition — which it’s calling the Open Education Challenge — to select the 10 startups that will form its first cohort. These startups will get five in-person coaching sessions in Barcelona, Paris, London, Berlin, and Helsinki, and will spend the rest of the program working in their own countries to develop and test their product/service — with access to online support and direct mentoring.
At the end of the 12 weeks, there will be an investors day where the startups present their projects to the incubators’ Open Education Investors Club, with the chance to secure follow on funding.
Teams selected for the programme will get €20,000 for participating, in exchange for an average of 6% equity. This money is being put up by the founding partners of the incubator: education company P.A.U. Education and investment firm Armat Group.
Members of the affiliated Open Education Investment Club, who the teams pitch to at the end of the incubation period, then have an option to invest between €20,000 and €1 million (depending on the startup’s valuation) in return for a minimum 20% stake in the company.
Initial selection criteria for teams is weighted towards what the incubator calls “educational quality” — aka “well-identified, relevant problem in the education field with identifiable users/beneficiaries”; and “team value” — i.e. the credentials, compatibility and leadership skills of the team; followed by, on an equal footing: “technological relevance — technologically feasible with an appropriate degree of innovation”; and “business sustainability” (aka clear competitive advantage and market).
Teams that make the first pass will be asked for more detailed information about their project, and be interviewed. A shortlist of 20 finalists will then be invited to Barcelona for a pitch competition in July to select the 10 winners.
Applicants to the incubator don’t actually have to be entrepreneurs or fully-formed startups at this point — the incubator says its focus is on “proposals that have the potential to bring new technologies into education”.
So, for instance, it’s encouraging teachers and techies who see a gap to apply technology (or some other innovation) in the classroom to apply via its online submissions process. It also says it’s open to use of old technologies in disruptive news ways. Or, indeed, to business proposals focused on solving education problems that don’t have any digital technology component at all. (Albeit, that’s going against the mobile learning grain.)
“The Open Education Challenge not really focused on edtech,” the incubator told TechCrunch when asked how it fits into the existing European edtech accelerator landscape. “Of course, a lot of innovations in the education field are now based on new technologies, but we are open to innovations that simply use existing technology in a new way, or even that don’t rely on digital technologies at all.
“We are trying to stay open to new approaches and ‘wildcard’ ideas that address real problems or needs in education.”
The accelerator has several partner organisations it’s working with to deliver the programme, including the European Commission (not a financial partner); Berlin-based MOOCs startup iversity — which pivoted towards massive open online courses last year, after initially setting up a business focused on online learning collaboration tools; Aalto University in Finland; and ESCP Europe business school.
Stepping back to take in the wider picture for a moment, there’s no doubt that, finally, after lagging edtech developments in the U.S. Europe is starting to rethink education processes, encouraged and energised by huge consumer take-up of smartphones and tablets.
And indeed, in some countries, to rethink education curricula to (finally) make it fit for the digital age. In the U.K., for instance, the government is in the process of overhauling how IT is taught in schools – and will kick off mandatory computer programming lessons for primary and secondary children in England next September. That development will take the U.K. (or at least England) ahead of the global curve on school-age computing education.
Other notably tech-focused education developments in Europe include the rise of the Raspberry Pi microcomputer (coming out of Cambridge, U.K.) — as a low cost platform for teaching kids about coding and tinkering (albeit one that has been embraced most by the maker community). The Pi has also kickstarted other edtech startups, such as London-based Kano, which is Kickstarting a ‘build your own computer & learn how to code it’ kit.
Index Ventures, whose partner Saul Klein is a Kano backer, also this week joined a $1 million+ seed round in a new mobile platform education startup, called Gojimo, also based in London.
Meanwhile last year saw several European MOOCs platforms kick off programmes with the aim of building similar momentum to the likes of Coursera in the U.S. — including U.K.-based Futurelearn, and the aforementioned iversity.
On the education-focused accelerator front, another edtech incubator landed on the scene earlier this month — called Emerge Education – naming the six edtech startups in its first cohort.
Those six startups — which have each received £15,000/€18,000 in funding, in exchange for 6-10% equity — are:
  • Edhub – One place to login, manage and run all educational apps for primary and secondary school teachers. Removes the administrative headache of having to remember and facilitate hundreds of daily app logins by each teacher and student in a school.
  • Ellumia– Mobile-first course-platform that enables delivery of any learning content in an adaptive, social and self-directed environment.
  • Lexicum – Personalised vocabulary trainer that remembers the context in which the user first encountered new words.
  • Sixth Domain – Helps schools record and communicate good and bad behaviour to students, parents and other teachers, which measurably improves student behaviour.
  • Learned By Me – Connects top language teachers from emerging markets geographies with language learners for high-quality, affordable one-on-one tutoring sessions over Skype.
  • NurseryBook – Increases parent involvement in their children’s education by enabling nurseries to track and share daily updates about children’s progress.
Emerge is based at Google’s Campus London, and is in partnership with Eton College, and Oxford University’s Said Business School.

India Fashion Portal Myntra Raises $50M On A $200M Pre-Money Valuation As Amazon And Flipkart Circle

India Fashion Portal Myntra Raises $50M On A $200M Pre-Money Valuation As Amazon And Flipkart Circle
Jan 31st 2014, 14:51, by Ingrid Lunden,Pankaj Mishra
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India’s e-commerce market is projected to grow sevenfold to $22 billion in the next five years, and investors and global e-commerce companies want to have a piece of the action. We have learned that Myntra, one of the bigger fashion portals in the country focusing both on traditional and more western fashion, has closed a $50 million round of funding. And, as that round closed, it got approached by both Amazon and Flipkart (known informally as “the Amazon of India”), with Flipkart making an acquisition offer in the region of $200 million.
The developments come on the heels of reports of both Flipkart’s interest and a fundraise.
The $50 million round, with a pre-money valuation of close to $200 million, has four main investors: PremjiInvest, Belgian-based Sofina, Accel and Tiger Global. A fifth, L Capital, may also be involved.
PremjiInvest is the investment vehicle of the family of Azim Premji, with a fund size of approximately $2 billion and a strong focus on tech. (Premji is the chairman of Wipro, the Indian IT giant that is surely one of the most epic pivots of all time: Wipro started as Western Indian Vegetable Products.) Sofina is a Belgium-based investor with a specialty in e-commerce, and both it and Tiger Global also invest in Flipkart, most recently in that company’s$160 million round. Accel is an active investor in India and was a previous investor in Myntra, which has now raised $125 million to date.
From what we understand, although the funding round and the names of the investors have been reported for some months already, it has now closed. An official announcement is due next week.
What the $50 million will mean is that Myntra now has the funds to continue to invest in its business for the next stage of growth as a standalone company, if it so chooses. The company is on track to have gross merchandise value — the total value of goods sold via Myntra’s portal — of $100 million for the current fiscal year. But it has been growing at a rapid rate. In April 2013 the rate was 100% every six months, and Myntra believes that GMV will be $1 billion by 2016-2017.
As a point of comparison, Flipkart is projecting a GMV of $1 billion by 2015.
The acquisition approaches, from what we understand, are being considered regardless of the fundraise and bigger strategy. We are still trying to get more information about the offer from Amazon. The Flipkart deal at $200 million, meanwhile, has been described to us as more of a “merger.”
“Interest from Flipkart validates the growth that Myntra is seeing,” one source very close to the negotiations told us. “[The] board is looking at all options but the fundraise is being closed in any case.”
As Pankaj noted the other day, India’s e-commerce market (sans travel sites) is currently worth $3.1 billion annually — just 1.5% of the value of China’s e-commerce sales, which are approaching $200 billion.
But as a huge country with a fast-growing middle class, India is seeing a relative boom in technology, which is playing out in mobile and internet penetration and expanding use of online services.
In other words, there is a world of opportunity for the future that larger, global players like Amazon and eBay (which has made a $50 million investment in another big e-commerce player in India, Snapdeal) want to capture. And so, while these two and others wait to see what India’s regulators decide to do with foreign investment rules for e-commerce, they are getting their ducks in a row.
As we have seen in other markets, e-commerce is a game of scale, where sales margins are low but volume is high, and logistics and back office investments make way more financial sense when rolled out across a larger footprint. Myntra consolidating with either another local player like Flipkart, or coming under the wing of a global giant like Amazon, would feed into that basic model.
But regardless of what happens higher up in the food chain, the same trend could also point to Myntra making some acquisitions of its own in the months ahead. It has made two acquisitions to date — interestingly, both in the U.S. In 2012, it acquired Exclusively.in, a private label site. And last year, it picked up Fitiquette, a Disrupt finalist that had developed virtual fitting room technology.
We are reaching out to Myntra, Flipkart, Amazon and investors for more details and will update the story as we learn more.

Flag, An App That Prints & Mails Your Photos For Free, Takes Off On Kickstarter

Flag, An App That Prints & Mails Your Photos For Free, Takes Off On Kickstarter
Jan 31st 2014, 14:22, by Sarah Perez
flag-app-iphone
Thanks to smartphones, digital photography has essentially become free – after the cost of the initial phone purchase, that is. You no longer have to buy bulbs or film or batteries to have access to an unlimited camera roll. You can snap photos at will, and store everything the cloud. But one thing that didn’t change with the times is the cost of printing out photos, which has remained stagnant over the years.
Today, a company called Flag wants to change that. It proposes a way for users to get free monthly prints of their iPhone photos, subsidized by placing advertisements on the back of each print.
Flag founder Samuel Agboola says it’s an idea that he’s had for some time, but one that before would have faced the proverbial “chicken and egg” problem. To get advertisers, you first need users. But to get the free prints to the users, you need the advertisers. Kickstarter helps to solve that problem by building up an audience that’s engaged enough to pay for the product before it launches, he says, proving to potential advertisers that the idea resonates.
And, of course, it also allows the Flag team to raise the funding they need to get their project off the ground.
Flag has a beautiful mobile app in the works that would allow consumers to access its service, but Agboola says the app’s development itself is not the challenge – it’s the infrastructure.
You see, Flag’s idea isn’t just photos with ads on the back. “Free photo printing is the hook,” says Agboola. “Our intention is to offer all the photo printing services you can get from any of the companies that exist today, we just intend to do it at a higher quality.”
For Flag, that means developing what it refers to on its Kickstarter page as a “photo finishing system ready for the 21st century.” This includes “museum quality (GiclĂ©e) printers, German 220 gram photo paper from sustainable sources, laser cutters, and robots with carbon fiber arms,” the company says.
“We believe the edge and the plus is by delivering quality that people aren’t used to, and standards they’re not used to,” explains Agboola.
flag-lasercut
For Flag, developing their own network and infrastructure means their business model wouldn’t be easy to clone by competitors, because of the costs associated with buying all the necessary equipment. And by investing in the printing infrastructure itself, Flag could bring down costs by reducing inefficiencies in the printing process, where today there is a lot that’s done manually, from packaging to mailing.
Having high quality equipment also means that Flag would be able to offer more than your standard set of photo prints. The company says it would be able to print square photos, rectangular ones, panoramas, enlargements, and offer rounded or custom borders, like those with scalloped edges or shaped like circles, shields, snowflakes or anything else.
flag-borders
Users could also print captions and their camera info (metadata) with their prints, turn them into postcards, and more.
The extra features Flag offered would be available for a fee, but the core product – the ad-supported 20 free photo prints per month – would remain free, says Agboola. While no ad deals have been signed at this point, Agboola says he’s been talking to some large companies.
flag-postcards
The founder’s background in publishing, tech and as an independent consultant may give him an edge in getting those deals done. Though he’s beholden to NDA’s for some of what he’s worked on during his consulting years, his LinkedIn profile shows he’s interacted with large companies like HBO, Lionsgate, Sony Pictures, Microsoft, Starbucks, and more. These bigger brands are the kinds of companies Flag would need to reach in order to make their service happen.
There is some precedent for a service like this. Before its acquisition, Sincerely rolled out ad-supported photo postcards, which made them free for end users.
However, Flag would take the idea to a whole new level and scale. If it can raise the funds, that is.
Flag is on Kickstarter here, where it’s nearly halfway to its goal just a few days in.

Cinemagram update takes all the work out of making animated gifs

Cinemagram update takes all the work out of making animated gifs
Jan 31st 2014, 14:03, by Sean Buckley
 Playing around with Cinemagram's moving photo feature is pretty darn fun, but it comes at a cost: effort. Unlike publishing a Vine or an Instagram video, you need to think about it; what part of this photo do you want to animate? Did you map out the ...

Twitter buys hundreds of patents from IBM, ending patent spat

Twitter buys hundreds of patents from IBM, ending patent spat
Jan 31st 2014, 14:44, by Matt Brian


IBM's the biggest patent holder of all time, but when it comes to legal disputes, it tries to work things out amicably. That's exactly what's happened with Twitter, after the social giant today announced it has bought 900 patents from Big Blue, also ...

Why Facebook thinks Blu-ray discs are perfect for the data center

Why Facebook thinks Blu-ray discs are perfect for the data center
Jan 31st 2014, 14:00, by Jon Brodkin
Inside Facebook's Blu-ray storage rack.
Facebook
Facebook's hardware guru thinks Blu-ray discs might have a brighter future in the data center than in consumers' homes.
We wrote on Wednesday about how Facebook has developed a prototype storage system that uses 10,000 Blu-ray discs to hold a petabyte of data. After that story posted we were able to talk to Frank Frankovsky, VP of hardware design and supply chain operations at Facebook, to find out just why he's so excited about the project.
While the Blu-ray storage system is just a prototype, Facebook hopes to get it in production sometime this year and share the design with the Open Compute Project community to spur adoption elsewhere. If Facebook and others start using Blu-ray discs for long-term archival storage, Blu-ray manufacturers will see a new market opportunity and pursue it, Frankovsky said.

The Low-Oil Frying Machine Fits Even Better on Your Counter Now

The Low-Oil Frying Machine Fits Even Better on Your Counter Now
Jan 31st 2014, 14:46, by Andrew Liszewski

The Low-Oil Frying Machine Fits Even Better on Your Counter Now
Realizing that not everyone needs an appliance capable of frying up a family-sized portion of wings or french fries, Tefal has scaled back the capacity and size of its Actifry with a new Mini version that's roughly 21 percent smaller. Like its larger predecessors the Mini still needs just a spoonful oil to work its magic, but is designed to serve up smaller portions while being slightly more portable.
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Despite the trash and half-finished buildings, some parts of Sochi's Olympic park are coming together

Despite the trash and half-finished buildings, some parts of Sochi's Olympic park are coming togethe
Jan 31st 2014, 14:30, by Kelsey Campbell-Dollaghan


Despite the trash and half-finished buildings, some parts of Sochi's Olympic park are coming together: The main Olympic venue, Fisht Stadium—designed by the US-based sports venue specialistsPopulous—is opening its doors this week, days before it will host the Opening Ceremonies. [Olympic.Org]
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There Is A Giant Robot Directing Traffic In Congo

There Is A Giant Robot Directing Traffic In Congo
Jan 31st 2014
A city in Congo has come up with a pretty novel solution to traffic congestion: massive, nightmarish robots.

Kinshasa, Congo's Capital, has installed two giant robotic contraptions to direct traffic in the place of police officers.

The robots are reminiscent of 'Marvin the Paranoid Android' from the original Hitch Hikers Guide To The Galaxy series, but apparently are proving quite effective.

robot traffic


The Washington Post reports that the solar-powered robots are equipped with cameras, and are commanding the respect of local people.

"If a driver says that it is not going to respect the robot because it’s just a machine the robot is going to take that and there will be a ticket for him," said Isaie Therese, one of the engineers behind the idea.


Take a look at more pictures of the robot below.

Yes, There's Going to Be a Back to the Future Musical

Yes, There's Going to Be a Back to the Future Musical
Jan 31st 2014, 14:06, by Brian Barrett

Yes, There's Going to Be a Back to the Future Musical
If you adore everything about Back to the Future except the lack of subordinate harmonies, today is a good day. The movie you love will officially be a musical you endure as of 2015.
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7 of the World's Weirdest Water Towers

7 of the World's Weirdest Water Towers
Jan 31st 2014, 14:00, by Andrew Tarantola

7 of the World's Weirdest Water Towers
Middle America's decorative water towers—not those nasty things in New York—hold a special place in the annals of Americana history. They serve as both a public utility and as a community's spiritual centerpiece—like a Midwestern totem pole, highlighting and reflecting the local cultural identity.
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Apple bombarded with candy-themed games in protest at the word 'candy' being trademarked

Apple bombarded with candy-themed games in protest at the word 'candy' being trademarked
Jan 31st 2014, 12:59, by Sharif Sakr
 Such sweet, sweet revenge. After the maker of the hugely popular Candy Crush series of games on the App Store somehow managed to trademark the word "candy" in Europe, other developers have started to fight back by blitzing Apple with an ...

This $75 synthesiser will turn anything into an instrument

This $75 synthesiser will turn anything into an instrument
Jan 31st 2014, 13:12, by Aaron Souppouris

Yuri Suzuki, the designer that brought you cabs that create music from street noise and helped Disney turn your earlobe into a speaker, is launching a Kickstarter through his company Dentaku for a circuit board that turns anything and everything into a musical instrument. Calling Ototo a circuit board is selling it short; it's actually a customizable synthesizer that can be played straight away using your fingers. However, if you connect a clip from any conductive material to one of the synthesizer's contact points, touching that material will play a note on the synthesizer. The list of objects this will work with is virtually endless, with a video launching the Kickstarter campaign showing Ototo connected to all manner of fruits,...
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Microsoft simplifies OneNote site ahead of ‘Office Online’ roll out

Microsoft simplifies OneNote site ahead of ‘Office Online’ roll out
Jan 31st 2014, 13:07, by Tom Warren

Microsoft is refreshing its OneNote site today as part of a broader plan to rebrand its online Office apps. The new onenote.com site has a refreshed design, but more importantly it now makes OneNote a lot easier to use on the web. Previously, OneNote users had to navigate through folders on Microsoft’s SkyDrive service to find and open their notebooks. The updated onenote.com site now lists all notebooks in a single interface, with shared notebooks also visible.
The changes are being rolled out as Microsoft prepares to rebrand its Office Web Apps to Office Online. Microsoft’s Office Web Apps are currently buried away inside the company’s SkyDrive service, where it’s difficult for new users to discover they even exist. Newly...
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Report: Windows 8.1 Update May Scrap Tile Interface By Default

Report: Windows 8.1 Update May Scrap Tile Interface By Default
Jan 31st 2014, 12:29, by Jamie Condliffe

Report: Windows 8.1 Update May Scrap Tile Interface By Default
Windows 8 is an OS struggling to capture the imagination of the masses, and now rumors suggest that Microsoft may alter the way its Start Screen works in Windows 8.1 Update 1.
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Good Deal: $499 Microsoft Surface Pro tablet, $400 off original price

Good Deal: $499 Microsoft Surface Pro tablet, $400 off original price
Jan 31st 2014, 12:21, by Tom Warren

Microsoft’s original Surface Pro isn’t even a year old yet, but it has been superseded by the Surface Pro 2. It appears that Best Buy still has some stock of the original model that it wants to move this weekend. We've seen some price reductions on the Surface Pro before — including cuts following the Surface Pro 2 release — but Best Buy is offering a massive $400 discount on the original retail price, bringing the Surface Pro down to just $499.99. While the old model doesn’t have an adjustable kickstand and the improved battery life with Intel’s Haswell chip, it’s still largely the same otherwise. You get a 10.6-inch 1920 x 1080p display with a Wacom digitizer and stylus, along with 128GB of storage. Best Buy’s...
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Lunar Transit: Nasa Captures Remarkable Moment As Eclipse Occurs In Space

Lunar Transit: Nasa Captures Remarkable Moment As Eclipse Occurs In Space
Jan 31st 2014
On Earth, an eclipse is a fairly rare event. But in space, somewhere, they occur every single moment.

Which is why Nasa has been able to capture these amazing pictures of a lunar eclipse, even though one hasn't occurred on Earth lately.

The pictures were taken by the Solar Dynamics Observatory, a space telescope dedicated to observing weather on the Sun.

Take a look at the pictures and how they were taken below.

UK Government Creates 'Whitelist' For Sites Blocked By Web Filter

UK Government Creates 'Whitelist' For Sites Blocked By Web Filter
Jan 31st 2014
The UK government is reportedly building a "whitelist" of legitimate websites to be exempted from its much-criticised web filter.

Internet service providers (ISPs) are currently required to ask new customers if they want to filter their internet for various content that might not be appropriate for children.

PM David Cameron said the filters were designed to stop young people "stumbling across hardcore legal pornography".

But the launch of those filters last year was widely criticised - both in principle, and for the fact that they seemed to block many legitimate websites along with material intended to be blocked.

In one notable case, the filter was found to block several sites offering sex education information specifically aimed at young people.

The filter will be extended from new customers to existing broadband subscribers later in 2014.

Ahead of that, the government is now trying to create a whitelist of sites that won't be blocked under any circumstances. The BBC reported that the idea came out of a working group, set up in the wake of the early controversy.

The group, chaired by David Miles for the UK Council for Child Internet Safety, said that "master list" was being drawn up with the help of charities and other groups.

A spokesman for the Internet Service Provides Association told the Beeb: "There's a growing realisation that filters are not perfect and will lead to some over-blocking,"

"There's a feeling that some sites sit in a grey area and more needs to be done for them."

However, for some the effort appears to be destined for failure, since the internet is generally able to thwart any attempt at categorisation or restriction:

UK government tackles wrongly-blocked websites http://t.co/zelPL8VxAO < A Sisyphean task if ever there were one
— Ben Rooney (@benjrooney) January 31, 2014

Sony upgrades smartphone-pairing QX10 and QX100 lens cameras with higher ISO and 1080p video capture

Sony upgrades smartphone-pairing QX10 and QX100 lens cameras with higher ISO and 1080p video capture
Jan 31st 2014, 11:22, by Mariella Moon


Shutterbugs who shunned traditional point-and-shoots in favor of Sony's QX10 and QX100 lens cameras can now take even better images and videos. Thanks to a firmware upgrade, both smartphone lens attachments are now capable of recording clips with a ...

Were Footballs Ever Really Made of Pigskin?

Were Footballs Ever Really Made of Pigskin?
Jan 31st 2014, 11:45, by Emily Upton - TodayIFoundOut.com

Were Footballs Ever Really Made of Pigskin?
These days, footballs are typically made from cowhide or vulcanized rubber, making their nickname "pigskins" somewhat ironic. Football fans often perpetuate the idea that footballs used to be made of pigskin, which is how they got their nickname, but it turns out this isn't the case.
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'Map Of The Internet' Shows You Where You REALLY Live

'Map Of The Internet' Shows You Where You REALLY Live
Jan 31st 2014
Where do you live - England? Scotland?

Or Facebook?

These days we spend so much time on the internet, it's easy to imagine that we really do live there - spending long weeks on the Facebook and Google mainland, and weekend jaunts to the holiday isles of Pinterest and Netflix.

Attempts have been made before to try and 'map' this digital reality, but none have done so with quite the style and old-school craft as Deviant Artist Martin Vargic, from Slovakia.

Check out a condensed version of the map below. Click here to enlarge for a full-sized version.

internet map

Vargic told HuffPost US that he based his map on National Geographic artwork, and spent 10 hours a day on it for about three weeks. The result, according to Vargic, is still a work in progress.

Vargic is selling a 34-by-22-inch version of the map for sale for $34.70.

Why You Actually Use Online Pizza Delivery Trackers

Why You Actually Use Online Pizza Delivery Trackers
Jan 31st 2014, 10:15, by Jamie Condliffe

Why You Actually Use Online Pizza Delivery Trackers
Don't worry, everybody does it. And look at it this way: at least it means the delivery guy never gets an unwelcome surprise. [Doghouse Diaries]
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This Is What a Ground-Penetrating Nuclear Bomb Impact Looks Like

This Is What a Ground-Penetrating Nuclear Bomb Impact Looks Like
Jan 31st 2014, 11:00, by Jamie Condliffe

This Is What a Ground-Penetrating Nuclear Bomb Impact Looks Like
A ground-penetrating nuclear bomb has been slammed into the surface of the US for the first time in six years—but, fortunately, without its nuclear warhead in place.
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After Little Eye Labs Exit, India’s GSF Accelerator Goes Global

After Little Eye Labs Exit, India’s GSF Accelerator Goes Global
Jan 31st 2014, 09:52, by Pankaj Mishra
gsf
GSF, the Indian startup accelerator behind Little Eye Labs, which was acquired by Facebook earlier this year, is launching a cross-border program with increased seed funding and global exposure for its third cohort starting April this year.
The GSF Global Accelerator is partnering with AngelList, a platform that helps startups find funding and employees, to manage the application and selection process for its next batch. GSF’s next batch will have eight startups from India, and the remaining four from across South East Asia, Eastern Europe and Africa.
“Little Eye Labs acquisition was the trigger for us to start thinking about a new model where startups could be exposed globally,” said Rajesh Sawhney who started GSF Accelerator in 2012 with support from investors including Dave McClure’s 500 Startups, InMobi founder Naveen Tewary, Blume Ventures and Kae Capital.
The next batch starting mid-April will have four stopovers — starting with four weeks in Delhi, Bangalore, followed by two weeks at Singapore’s The Hub, then two weeks on the East Coast, and the final four weeks in the Silicon Valley.
All this would also mean more funding for the selected startups. GSF’s next cohorts will get $40,000-$60,000 each in seed funding as part of the new program. Earlier, the startups received $30,000 in funding after getting selected.
Out of the company’s two batches of 24 startups so far, nine have have gone on to raise additional funding, and two of them have been acquired.
Many Indian accelerators started with the idea of modeling on the kind of incubation provided by TechStars and Y Combinator in the U.S. But the Indian startup ecosystem is still nascent in terms of getting the global exposure. As Sharad Sharma, co-founder of iSpirt told me recently, Indian startups really need to get on the radar of newer Silicon Valley companies such as Facebook, Google and Twitter who are more acquisitive.
This is an area where more investors, accelerators and think-tanks in India are beginning to focus.
For its part, GSF took several of its cohorts including Little Eye Labs for a World Expedition last year, which helped exposing them to potential acquirers including Facebook and Twitter.
This year, GSF is planning demo days across important tech hubs in the world.
“We’ll have four demo days — two in the U.S. and one each in Singapore and India,” said Sawhney.
Clearly, the $10-$15 million acquisition of Little Eye Labs by Facebook is beginning to make a large impact on India’s nascent startup ecosystem, at least in terms of getting global attention and future strategies going forward.

Tiptoe through Spotify's untouched tunes with Forgotify

Tiptoe through Spotify's untouched tunes with Forgotify
Jan 31st 2014, 10:13, by Timothy J. Seppala


Not every song is a smash hit, and for every Katy Perry, there are thousands of Justin Guarinis praying for some attention. At last count, there are around four million songs on Spotify that haven't even been played -- which is why some kind soul has ...

NSA reportedly helped Canada spy on airport passengers using free Wi-Fi

NSA reportedly helped Canada spy on airport passengers using free Wi-Fi
Jan 31st 2014, 10:28, by Tom Warren

Canada’s electronic spy agency has allegedly been using airport Wi-Fi to spy on its citizens. CBC News reports that the Communications Security Establishment Canada (CSEC) collected data over a two-week period from free Wi-Fi hotspots at what it describes as a “major Canadian airport.” While it’s unclear what data was obtained, CBC News claims it could be used to “track the wireless devices of thousands of ordinary airline passengers for days after they left the terminal.”
Metadata collected from airport Wi-Fi systems over a two-week period
The bold claim isn’t backed up with any technical details on the work of the CSEC, but it appears that the spy agency collected metadata from the free Wi-Fi hotspots. CBC News notes...
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Apple Patent Reaffirms Rumours of Pressure-Sensitive Touch-screens

Apple Patent Reaffirms Rumours of Pressure-Sensitive Touch-screens
Jan 31st 2014, 09:32, by Jamie Condliffe

Apple Patent Reaffirms Rumors of Pressure-Sensitive Touchscreens
Last year, Bloomberg reported that Apple was working on enhanced sensors capable of detecting different levels of pressure. Then, a patent popped up adding weight to the rumor. Now, a second patent lends the idea of pressure-sensitive touchscreens yet more credence.
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Kevin Spacey on dead dogs and deviousness in 'House of Cards'

Kevin Spacey on dead dogs and deviousness in 'House of Cards'
Jan 31st 2014, 09:19, by Rich McCormick

Netflix original drama House of Cards has won plaudits from critics, a Golden Globe award for actress Robin Wright, and a potential third season. But in a lengthy interview with the show's star Kevin Spacey — who plays scheming Congressman Frank Underwood — The Wall Street Journal notes how much of a risk the streaming service took by taking on a show that cost $100 million for its first two seasons. In the interview, Spacey discusses his role, his future career plans as he leaves his post as the artistic director for London's Old Vic theater, and why an alarming number of the characters he plays are put in close proximity to dead dogs.
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