Purewire Progresses

Big day for Purewire.  Today they announced $2 million in funding, Tom Noonan joined their Board of Directors, and the general availability of the Purewire Web Security Service.

The Purewire team quietly formed about nine months ago and began working on their concept.  They announced the formation of the company in May.  And now today.

The company was founded by my former partners in crime from CipherTrust, which was acquired by Secure Computing in 2006 for around $300 million. The founding team included Mike Van Bruinisse, President & COO; Dr. Paul Judge, CTO; and Mark Caldwell, Vice President of Sales.  Since then they have recruited Steve Raber to join as CEO, Brad McArthur as Vice President of Operations, and Mary Catherine Petermann as Vice President of Marketing.

The $2 million raise was a "friends & family" round led by Imlay Investments.  Those guys have some really great friends (one of them is me) to pull together that much coin.  They can do so at this stage because the story is compelling, they have done it before together, the team has the passion that it takes to succeed, and MVB and company are thinking big.

Essentailly Purewire is offering a cloud computing security service.  The product platform is strong. The four core technologies are Sandbox which protects browsers from script-based attacks; Reputation, a real-time URL classification engine; Trust that correlates user reputation, Web reputation and other heuristics; and Webcelerator an acceleration technology that maintains speed and responsiveness while all the other activity is going on in the background.

If you are looking to join an early stage company that intends to make a big splash Purewire is hiring developers and engineers.

Tell them I sent you. I don’t think they will hold that against you.

August 4, 2008  |  Comments  |  Tweet  |  Posted in Angels, Internet, Startups, Web/Tech

Who Wants Seed Money?

The comment stream generated by the word "discuss" in my quote of the week Friday is simply amazing.  The quotes are not that important.  Read the comments.  Some really good stuff in there.

Several of the comments pointed out the need for a seed stage investment company like Y Combinator in the Southeast.  I was a bit surprised that no one mentioned the previous efforts to create such entities in Atlanta.  There are two.  Boostphase, which Stephen Fleming, Wayt King, Keith McGreggor, myself, and others attempted to form last fall.  And Profounder (that has a slightly different model) which was put together by Merrick Furst this year and in which I am involved.

So the comments got me thinking.  Is it time to try and wind up Boostphase again from an angel perspective and do we have enough entrepreneurs in the Southeast, to quote Wei, to take a shotgun approach.  So I am interested in knowing how many of you entrepreneurs out there believe you can answer the following questions, pulled straight from the YC application, in a compelling way.

What is your company going to make?

Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together.  Include urls if possible.

How long have the founders known one another and how did you meet?

What’s new about what you’re doing? What are people forced to do now because what you plan to make doesn’t exist yet?

What do you understand about your business that other companies in it
      just don’t get?

How will you make money?

How long will it take before you have a prototype? A beta? A version you can charge for?

If we fund you, which of the founders will commit to working exclusively (no school, no other jobs) on this project for the next year?

And if you can answer the questions in a compelling way, would you accept a deal where you got $25K and some expertise on how to get your concept to the angel/VC/buyout stage for 5 – 10% of your company?

I am going to try this one more time.

Discuss.

August 3, 2008  |  Comments  |  Tweet  |  Posted in Angels, Entrepreneurship, Startups

Quotes of the Week

"When you raise capital you are looking for more than just the dollars."

"If you’re just a guy coming out of college, you’ve got a dream, you’ve
got a really good idea, it’s impossible to be able to raise money and
create a community around what you’re doing.”

Jeff Haynie

"Atlanta (and most of the southeast it seems) is dominated by venture capitalists and investors that are spreadsheet jockeys."

Sanjay Parekh

"Atlanta has the ingredients to nurture local tech startups and early-stage companies.  If you’ve got a good idea and a good team you can get funded in Atlanta."

Me

There is no right or wrong here.  What do you think?

Discuss.

August 1, 2008  |  Comments  |  Tweet  |  Posted in Quotes

Atlanta Consumer Startups

Quite some time ago someone anonymously suggested via Skribit that I write about the reasons for the lack of consumer oriented startups in Atlanta.  The suggester used the word "dearth" which seemed a little harsh to me.

The reality is that there is a pretty vibrant group of consumer startups in Atlanta.  I saw founders of these companies at BarCamp and StartupWeekend.  I got to know quite a few of them better via the GRA/TAG Business Launch Competition, Startup Riot, and CapVenture.  Just amassing the list of these startups in one place to demonstrate the point was going to be a massive undertaking.

That task has all been made quite easy by ATLlogos put together by Paul Freet.  ATLlogos is a nice place to visit that lists all the startups in Atlanta that have come to Paul’s attention.  There is an RSS feed to stay up to date on startup company news. They are tagged by industry.  If you click on the consumer tag you will find 28 consumer oriented startups.  That about 25% of the total.  These companies range from more well established startups such as Kaneva, to up and comers such as JungleDisk, to just cool ideas such as Tag6, to Esgut which just sold for a nice quick exit.  So there is a group of companies out there playing in the consumer space.

But to many this does not seem to be the case.  Perhaps because not many of them make it big.  Why is this?

I’ll try to answer that question next week.

  |  Comments  |  Tweet  |  Posted in Startups

Obamanomics

Interesting article by Michael Boskin the op ed section of The Wall Street Journal yesterday (paywall).  Most interesting part is the table showing the changes in marginal tax rates for those earning above $250k (which, as a current public servant for the state of Georgia I do not, and seriously question defining a duel income household with kids and such earnings as “rich”).
Obama_tax_chart_2

Think the prospect of Mr. Obama winning the general election and
increasing the tax on dividends from 15% to 39.6% combined with his capital gains plan has anything to do with the current behavior of the stock market?

Money quote.  “Despite his obvious general intelligence, and uplifting and motivational eloquence, Sen. Obama reveals his startling economic illiteracy in his policy proposals and economic pronouncements….if the proposals espoused by candidate Obama ever became law, the American economy would suffer a serious setback.”

One can only hope for a move to economic center between now and November.

July 30, 2008  |  Comments  |  Tweet  |  Posted in Business

Building A Great Company

Jason Caplain recently pointed me to a post by

It’s almost a rite of passage in Silicon Valley. As a founder, you
start a company, get VCs to fund you, recruit a "world class"
management team…and eventually, find your replacement (or get ousted).

What people seem to miss, however, is that just about every great
company ever created – in technology as well as low-tech, was built by
a founder (or a CEO who happened to join the company very early in its
growth phase) and a team of dedicated people who grew with their
companies.

I don’t believe in "world class" management in the generic sense. "World class" in what??

What I believe in is people who learn on the job and become – over
time – the best at what they do. Along the way, they make plenty of
mistakes. But that’s part of the learning (and perhaps the luck of it –
because the mistakes happen to be not fatal for the survivors).

Think about it. Some examples of great companies led by founders for
decades are GE, UPS, FedEx, Wal-Mart, Southwest Airlines, HP, Intel,
SAP, SAS, Apple, Oracle, Microsoft, Adobe, Sun, Dell, Qualcomm,
Broadcom, Nvidia, Dolby, Amazon.com, Salesforce.com, etc.

Ho has a point.  His most important one being that if you are going to be build a truly great company, bringing in outside management rarely gets you there.

Something to think about when folks start asking you what you see as your role in your company when you are on the money trial.

July 28, 2008  |  Comments  |  Tweet  |  Posted in Entrepreneurship

Double Quote of the Week

"The Patent and Trademark
Office has now made clear that its newly developed position on
patentable subject matter will invalidate many and perhaps most
software patents, including pioneering patent claims to such innovators
as Google, Inc."

John F. Duffy

"The idea that Google’s success is somehow predicated on its patents is pretty ludicrous."

Mike Masnick

July 25, 2008  |  Comments  |  Tweet  |  Posted in Quotes

Amazon And Availability

Today Amazon reported earnings and they were pretty outstanding (I do not own any AMZN and have not since I unloaded what I purchased as "a friend" on their IPO).  Profits doubled.  Sales up 41%. Not a bad quarter.

Except it reminded me of what happened this past Sunday. 

Amazon’s S3 online storage service experienced significant downtime.  It was not available for about 6 hours (they were also down for about 3 hours back in February).  That is a ton which I will explain shortly.  But for those that do not know, S3 is a distributed storage cloud that many applications such as Twitter and SmugMug use.  They charge $.15 per GB/month and $.10 per GB of data transfer in and a sliding scale starting at $.17 per GB of data out (this is more because Amazon has less slack data out due to the site traffic www.amazon.com generates, is mostly all out).

To provide a little background here, it is a little known fact that for a period of time I ran MindSpring’s product development team.  The developers all reported up to me.  The short story is we were growing so fast we started having some issues pushing products out the door, we went away for a few days to something that became known as the "technology summit", and at the end of the said summit the president of the company gave me the dev team because he wanted one person responsible.  We fixed the issues.  It is during this time that I become intimately knowledgeable about things such as reliability and availability.

Availability is simply the amount of time a service is available (scheduled maintenance downtown excluded).  Availability is typically measured by the number of "nines" delivered.  For example the plain old telephone service that you get from AT&T has an availability of five nines or 99.999% (this is sometimes referred to as telco grade).  Now back in my ISP days we did not shoot for five nines for core services such as mail and web, it would cost too much to so do.  Our objective was four nines or 99.99%.  Now removing one little nine may not seem like much but it makes a big difference in the amount of downtime a service has as you can see in the table below.

Uptime (%) Downtime/Year
99% 87.6 hours (3.65 days)
99.9% 8.76 hours
99.99% 52.56 minutes
99.999% 5.256 minutes
99.9999% 31.536 seconds

99.99% still seems an acceptable level for a mature Internet service.  A startup can get away with two, an emerging company three.  So how is Amazon doing?  For S3 it is pretty straightforward.  S3 year to date is less then 99.9% available, which to me, for a paid service is not acceptable.  This got me to wonder how Amazon’s own site faired.  So I did a little investigating.  And to do so I used information from a neat little company called Pingdon that issues reports on such things from time to time.

The only report on amazon.com was from last April, but through that point of the year the site was only down 21 minutes which on an annual basis equates to just under 99.99% .  I find the disparity very interesting.

Now granted most newer web apps are not going to deliver four nines and this pingdom report shows that.  The 17 social networking apps that they reported on had an average availability of 99.7%.

Here’s the point.  Back in those days of providing Internet services we had "14 Deadly Sins".  One of them was "Rely on outside vendors who let us down".  All the cuteness of the Twitter fail whale meme aside (which i believe is making some companies/individuals behave like excessive downtime is acceptable), if you are going to build a healthy web or SaaS application business the service needs to be available.  If you rely on S3 alone to deliver that availability in a production environment you will fail.  You need an effective fall over plan for when S3 goes down.

July 24, 2008  |  Comments  |  Tweet  |  Posted in Web/Tech

TypePad iPhone App Review

This is a review of the TypePad app for the iPhone. I created it on the iPhone.

Or perhaps I should say started on an iPhone because I inadvertently published it after two sentences.  More on that later.

First, the setup did not go off without a hitch.  I downloaded the app last week.  The first thing you have to do is enter your account info.  Which I did. The TypePad server did not like my creds so it returned a username/pass error.  I tried this a few more times (including on my MBA to check I was using the right login) to no avail.  So I opened a ticket with TypePad on Saturday and received a reply Monday.

Laura from TypePad told me to uninstall/reinstall the app.  So I uninstalled on both iTunes and the iPhone, downloaded the app via iTunes and synced it over to the iPhone.  This resulted in an "unknown error" response when submitting the acocunt info.  So I uninstalled again.  And decided to install the app via the App Store accessed via the iPhone itself.  This seemed to work.  I logged in and quickly made a test post with a picture which I published and deleted.  Very easy to use.

Create_iphone_3

Then I started this post.  And while the TypePad iPhone interface is pretty straightforward there is one area that is a bit confusing and resulted in me publishing the first two sentence of this post before I meant to do so. To the left is a screenshot that I ripped from TypePad that shows the Create a Post interface.  Once you start a post you have two high level options, to Cancel or Publish.  Publish does just that.  Tapping Cancel does not actualy cancel the post but leads to a sub menu that provides options to Save to Drafts, Don’t Save, and Cancel.  Having a Draft button at the high level sure would make things more clear.

Adding pictures to posts is a snap.

I could find no functionality to create a hyperlink and given the speed at which I can type on an iPhone that sure would be nice cause doing HTML is just not going to happen.

While I think that this app is a must for anyone with a TypePad blog, like Dave whose WordPress app article inspired this post, I don’t think I will be using this app on a regular basis (if TypePad added the functionality to manage existing posts and comments that would certainly change).  The overall experience of typing on the iPhone is much better suited to microblogging platforms such as Twitter.

Here is the article on the TypePad blog announcing the iPhone app.

July 22, 2008  |  Comments  |  Tweet  |  Posted in Web/Tech