Heard of these companies?

 

The Quiet

Each week, I like to feature one company that a local VC feels is not getting enough attention. This week, we’ll take a break from digging into the Boston venture capital portfolios and check out a few companies that you should be hearing a lot more about, but haven’t yet.

The way I see it, some of these companies could be the next major employers in Boston. A couple even have raised money far greater than some of the startups that seem to draw outsized attention from the local media (cough, cough…food delivery companies and social media add-ons).

GreatHorn – Headquartered on a nondescript side street in Belmont, GreatHorn deserves to be mentioned among the other top emerging cybersecurity startups in Boston.

The company has raised $2.25 million from the likes of ff Venture Capital, SoftTech VC, RRE Ventures, Techstars Ventures, Zelkova Ventures, V1.VC, and Walter Winshall.

I sat down recently with CEO Kevin O’Brien, who has worked for Contact Networks (acquired by Thomson Reuters), Cloudlock, and Conjur, among others.

O’Brien sees an enormous opportunity to combine AI and human oversight to the growing susceptibility of the cloud communication and collaboration spaces. For O’Brien, the greatest threats for breaches rest in the third part apps, add-ons, and other potential loopholes with services like Slack and cloud document sharing and collaboration programs.

Examity – A Boston edtech startup raised $21 million recently. And, you’ve probably never heard of them. And you might have a hard time finding them as well.

Examity is based above a bank (“You have to walk through the ATM to get to the office, which is kind of cool,” CEO Michael London told me) by the MBTA station in downtown Natick.

While it is not being run out of some “hot” Boston property, the company is on the cusp of making waves in the test-taking and online education spaces on a global level.

As London explained, the company offers a full complement of processes to identify and verify people taking tests online. Whereas the rest of the industry focuses on singular methods, for the most part, Examity offers clients a full suite of ways to confirm the identities of online test takers.

While many college online education programs and skill assessment clients are using Examity, London believes they are just dipping their toe in the water for what has the potential to be a truly massive space as more tests, including college entrance exams one day, come online.

NewStore – There were two Boston companies named on a recent Bloomberg list of the “50 Most Promising Startups You’ve Never Heard Of.” One was Accion Systems, the space propulsion company started at MIT. The other…NewStore.

Who?

NewStore, started by Demandware founder Stephen Schambach, raised $38 million in funding in a single round led by General Catalyst when it launched in 2015.

A mobile retail platform, NewStore works for a wide array of luxury and big name brands to help them stay ahead of technology and social trends and reach more potential retail customers. Instead of using multiple services, NewStore has an all-in-one solution to acquire and sell to mobile users.

The company says it employs more than 140 currently, but should continue to grow massively, and, most likely, quietly, as its mobile shopping solutions gain further market traction.

Parlor Skis – With the season winding down, you might think this is a bad time for a New England-based custom ski maker. Not so, says Parlor CEO Mark Wallace.

You see, not only does Parlor have a ton of orders for its skis for next season to fulfill, it is also offering unique DIY opportunities for those who really want to get involved in the building process.

From April to August, the company will be holding custom ski making classes where attendees will make their own new skis start to finish. It’s a pretty cool way for the company to keep momentum going at a time when things can tend to lag.

But be aware, spaces fill up and Parlor has already quite a few people who’ve made deposits to build a pair this summer.

Know of more under-covered companies in Boston? Send a note my way at shhh@utterlybiased.com.

 

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What went down this week…

A Hard $4M – Just one quick note as VentureApp, the company started by two groups of young entrepreneurs who had exits with their previous companies, announced that it had closed a $4 million round of funding earlier this week.

  • There are a lot of peeps with some startup experience involved in the company started when UMass/Amherst guys Boris Revsin and Jared Stenquist, co-founders of DailyBreak (which had some sort of strategic partnership/acquisition from Connelly Partners) joined forces with the founding team from Bostinno/Streetwise Media including Chase Garbarino, Kevin McCarthy, and Greg Gomer (who all had an exit when the American City Business Journals bought Streetwise). Recently, Chase Garbarino told me that raising this round was one of the most difficult challenges he has faced as an entrepreneur. The outcome: He managed to get Boston Seed onboard, as well as Ryan Moore from Accomplice, whose office the company had been working out of while getting off the ground. The other investor? FullStack Ventures, the fund started by…Revsin, Stenquist, Garbarino, and Gomer.

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Utterly not related, but a must watch nonetheless

“Do What You Love?” The advice has become so ubiquitous and overused that it is now the tagline for a company that has raised almost $6 billion in funding in WeWork. Although very motivational, the saying is getting a bit tired.

Well, this guy here, John Shocklee, is actually the living embodiment of “Doing What You Love.” It’s messy and not always glamorous, but if you can find something you love as much as this guy loves touring people in the Rockies, you’re onto something. Watch for the quirky story, enjoy for the breathtaking images.

  • The passion quote: “Money doesn’t matter to me, never has. It’s not that I’m rich, I didn’t come from money, I still don’t have money.” Shocklee, a 52-year-old ski guide from Colorado says after a tour of his one room abode.

Age versus Experience

Age Ain’t Nothing but a Number…

The two companies in the national spotlight the last couple of weeks, Snap (aka Snapchat) and Uber have some things in common. Chief among them has been a constant questioning of whether or not their leadership is qualified to run what could be Fortune 500 companies.

Both have faced calls to add “experienced executives,” insider parlance for adult supervision. Both have seen execs come in for short spells before departing. This has also happened to company’s such as Twitter, as well.

The problem in many of these instances is usually viewed from the outside as an issue of age difference. You hear this sometimes from people who either make a bad hire, and try to excuse it, or from those who move from a corporate or established entity to a hot young startup.

But there is something a bit more complex going on here. And so I spoke with a bunch of CEOs who are on the young side, younger than 35, to dig into how they’ve felt in these situations.

Most admitted that figuring out how to work with older more experienced employees had less to do with a difference in age than it does with a gulf between the experiences of CEOs and their charges. And there seems to be no way to avoid this very challenging part of running a startup.

Whether it is a VP or C-level employee hired to help in a new stage of growth for a venture or whether it is someone put in place by a board of directors or VC, this seems to always be a thorny situation.

As VentureApp CEO Chase Garbarino described it, “I fucked this up multiple times.” And he’s not alone. Almost everyone I spoke with said some version of the same thing.

One reason, as Garbarino explained it is that hires who typically come from corporate world don’t realize that the title they hold in their former established companies is not comparable to what might be described as the same role in a startup.

And this can cause confusion for both a young CEO or an experienced new hire. As Garbarino described it, “The CEOs don’t understand from day to day what they want and what this person has been doing.”

Tom Coburn, CEO of Jebbit, says one of the issues between young founders and experienced execs working together can be cultural. As his company has grown, he said he’s made some mistakes but learned from them to change how the company works.

An Coburn knows well how a vast cultural difference can slow a company. In its early days, the entire Jebbit team, all in their early twenties, lived in a single house together. When they made a few older hires as they grew, they made mistakes they didn’t even realize Coburn said. “We’d work all day and then go home, have a beer, and then start talking strategy again to late in the night,” he explained. “We would make key decisions.”

Later, another member of the team who didn’t live in the house pointed out how that type of operation could lead to issues. Some folks who were supposed to be key stakeholders, but who might have other responsibilities (part-time jobs, families) felt left out of process and started to get upset. “They were right,” Coburn said, “we just didn’t realize the impact of the way we were working together at the house.”

So Coburn made changes. The only time they have tactical meetings is at 4:00. No more decisions made in casual environments. There had to be a strict separation of home and work.

This can be hard for young founders for other reasons. As Drizly CEO Nick Rellas told me, “When you are 23 or 24, you want everyone to be your friend. It takes time to realize that you need to be the steward of the business and what it means to be the boss.”

“I had to figure out how to be an asshole,” Rellas added. “But I wasn’t ready for that at first.”

“People don’t want to talk about this because it’s sensitive,” Chase Garbarino told me. “The difference in culture thing is real even if people don’t want to talk about it.”

As Garbarino explained, he feels like, after having run Bostinno/Streetwise Media and now VentureApp, he’s had the experience of being the young CEO and now has a bit more experience to avoid some earlier mistakes.

He’s 32. And has already built two companies, raise venture funding, and sold Streetwise. Experience is the key, and only comes with time, whether that be 10 years in business or 25.

Boston’s younger CEOs will continue to screw up. But, they are getting older and wiser. Should be fun to continue watching their development.

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Who is under-the-radar?

In this week’s under-the-radar, we dig into a company that is under-the-radar from a VC firm that has been under covered as well.

I recently sat down with Vivjan Mytro of Hyperplane VC, who is leading one of the next generation VC firms in town. Hyperplane is involved in some major deals in Boston that are heavy on tech and long on potential impact including Talla, Indico, TellusLabs, and the previously mentioned Vesper, among others.

According to Mytro, the company in Hyperplane’s portfolio that is not getting enough attention is Volta Networks.

The reason? It might be that Volta, officially a “Routing-as-a-Service” platform for the cloud, is an old school-type of Boston tech company. What that boils down to is that its tech is complex — bringing routing to the cloud and distributing routing intelligence between processes — in a way that could improve networks and infrastructure for the booming spaces of machine learning, the Internet of Things, and sensors.

“These guys have had some major validation recently from their big customers,” Mytro said. “This could be pretty revolutionary.”

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In it’s eleventh year, TUGG’s annual celebration, TUGG Makes Boston (FKA the TUGG Wine and Tequila Party) presents the best opportunity to meet all the people who are pulling Boston to the forefront of tech and innovation. More than that, it is the best chance to support the local non-profits working with those in the community most in need of help, support, and access to more opportunities.

Read more here…

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What went down this week…

An Odd $100M – That’s the new amount of funding DraftKings announced this week. It’s a bit of an odd move, as many have pointed out, coming as the company is expected to merge with former rival FanDuel.

  • The best reasoning behind this new funding comes from Dan Primackwho seems to know everything about DK, including the weekly lunch schedule and the password for the bathroom. You can check out Primack’s take at Axios, but his reasoning, that FanDuel is raising the same amount of funding as well and both rounds are meant to buffer the companies if for some time if anything goes sour with the proposed merger.

Madness – I’m convinced Rob May doesn’t sleep. The Talla CEO and local AI guru is at it again, leveraging Talla’s technology to help Slack users keep track of the NCAA brackets this year.

  • All this is in addition to running the great AI newsletter, Technically Sentient and serving as a venture partner at Pillar. Methinks that the Talla Bracketbot pet project serves a dual purpose: Getting Talla’s great Slack capabilities out there to the general public, and allow May and co. work on something close to the heart with the hoops tourney. You see, May, originally from the Bluegrass State, is a hardcore Kentucky Wildcat fan. I wonder who he had going all the way this year?

Let’s Get Fired Up About Coverage – So Veracode is being acquired for a reported $600M by CA. While not in the stratosphere of the Dell/EMC deal, it is a major merger and a win for the Boston technology community. Other than some of the IPOs over the past few years, it is one of the largest liquidity events.

  • And yet, The Boston Globe throws a sliver of coverage, from its device expert no less, at this news. And you’d be hard pressed to find other coverage out there about this as well. Veracode is one of the better homegrown startup stories, having been started inside the old Atlas Venture and led by Jeff Fagnan and Maria Cirino of .406 Ventures, who once served as Veracode’s CEO for a spell. (The image above is one that hangs up in Accomplice’s office and was included in a piece Fagnan wrote after the acquisition was announced…CEO Bob Brennan is in the middle with Cirino to the far left and Fagnan to the far right.) This isn’t the only news that has been neglected this week. There is news from Vaxess Technologies, Examity, NewStore, Digital Alloys, that just don’t seem to be important to some and yet could all be major employers in the area for years to come. Just saying…

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Utterly not related, but a must read nonetheless

If you have some time, check out the profile of Jack White in The New Yorker: “Jack White’s Infinite Imagination.”

  • The money quote: “Pushing myself into corners, identifying with the underdog, becoming the over-dog, being punished for that, retreating, advancing, learning to live in modern times, all the while creating at every turn. That’s the life path I chose long ago, and I couldn’t derail myself now if I wanted to.”

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Utterly shameless self-promotion

Please, lease share the Utterly Biased sign up, which can be found here.

As I continue to build out the strategy for this thing, many have asked what the goal is. Well you know the scene at the end of “The Departed” when Marky Mark shows up and surprises smug, “I-got-away-with-it” Matt Damon. As I see it, Silicon Valley is Matt Damon and Boston is Wahlburg. So, I’m here so that everyone doesn’t end up too surprised when things flip.

Send any tips to tips@utterlybiased.com.

And any other feedback you may have, don’t hesitate to send my way as well.

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Screwed the pooch

There were some doozies last week.

The major mistake was splitting the credit and confusing two Harvard biz scholars. Clayton Christensen wrote the Innovator’s Dilemma, while Noam Wasserman wrote the Founder’s Dilemma. My B.

Also, here’s a link to the paper that features Nick Ducoff and Northeastern.

Snap, Pop, Next…KB is an Inspiration and a Badass

Snap, Pop…and Then?

Snap, Inc., the parent company of Snapchat, went public this week. Opening at $24 (initially priced at $17) it has continued to rise to $27.01. There are quite a few takes being thrown out there relating to Snap’s debut on the public market.

Like the one that examines the interest from millenials looking to get a piece of the company that they perceive as their version of Facebook.

While that’s cute, not everyone is so keen on the future prospect of actual stock on the public market.

But one thing is clear, a lot of the optimism surrounding the Snap IPO is that, FINALLY, a high-potential private tech company has decided to test the public market. As I said before, this could be a major signal for companies who have been waiting on the sideline to jump into the IPO game.

I reached out to Maia Heymann, General Partner at Converge Venture Partners, to get her take on the potential opening of the IPO window following Snap’s pop.

Her response is great:

  • “I can’t predict the public markets or the buy-side’s receptivity to IPOs after Snap, but I sure hope the window stays open so that more tech companies can access the public markets. We need more tech companies to get public, grow into bigger companies, and keep the industry strong and diversified. If you end-up only having a few large trees in the forest, and too many saplings are bought-up, it ends up not being a forest anymore, and those few big trees cast a shadow that prevents new growth. The tech industry is getting that way. We’ve largely lost that mid-tier of mid-cap tech companies, who were buyers of smaller companies.  We’ve gone from about 8,000 publicly traded companies in the U.S. in 1996 down to around 4,000 in 2016. When investment banks couldn’t publish research on the companies they took public (circa 2003), that was the huge blow. It’s not SOX compliance, or the cost of being a public company that keeps companies from going public. It’s the lack of research coverage on new tech companies; no coverage, no float; no float, no buyers (of the stock). Who wants to go public only to be an orphaned stock. If smaller tech companies could access the public markets, they would. The loss of mid-tier investment banks who could cover smaller tech companies, published research, and provided coverage and analysis on a mid-cap tech stock post IPO, has hurt. I’ve always maintained that the loss of the boutique investment banks devoted to tech—the Four Horsemen: Robertson Stephens, Hambrecht & Quist, Montgomery, and Alex Brown—has dampened the IPO window for tech stocks more than any SOX ever did.”

That’s some great insight, especially the lesser discussed issues that have slowed both the IPO and M&A markets. It does really feel like more and more, companies, Snap included, are hitting the market with a lot of uncertainty.

Hopefully, whichever way Snap goes, some other tech companies on better standing (like say, being profitable) will hit the market soon to build more confidence to go public.

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Who is under-the-radar?

According to Eric Paley, the most under the radar company in Founder Collective’s portfolio is BookBub.
Paley says that BookBub — which has raised $10.8 million in funding —  gets about 10 million daily users. That makes it one of the largest independent eBook sales platforms on the web, but it still doesn’t seem to get as much attention as others in the online publishing space.

He didn’t dive into the reasons why BookBub wasn’t more in the spotlight, but you don’t have to read Inside Book Publishing to know that there is one MAJOR reason why you don’t hear much about the company, and that is Amazon.

One major threat to BookBub’s success has been the launch of Amazon, the clear eBook leader, and its Prime Reading product. Prime Reading aims to serve as a launchpad for lesser known authors, which has been a major draw for BookBub.

But BookBub does have some advantages, its model is cheaper, for one. Also, it has a bit more of an independent book store culture and brand. If you can believe that such a thing could exist on the Internet, BookBub is the indie neighborhood book shop to the corporate Amazon. This attracts a niche of authors working in outlier genres that seem to get lost in the colossus that is Amazon.

Brit+Co. has called the company the “Kayak for eBooks,” and the “interweb’s best open secret on where to score books for a fraction of the cost.” With growing readership and the type of indie cred that can’t be drummed up by a marketing team, expect BookBub to gain more and more accolades and users. Oh, yeah, and more profit and funding as well.

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What went down this week…

HubSpot’s Katie Burke, the company’s Chief People Officer, published a blog post on Medium this week that is a must read. I shared “Because I’m a Girl,” on a couple social media platforms and got more feedback from folks outside of my “tech/startup” circle, to use the old Google+ nomenclature, than anything I’ve ever posted. I also got calls from my sisters who were fired up by Burke’s message.

  • Burke’s post struck a nerve. While having her qualifications questioned because she is a woman is the impetus for this piece, there isn’t likely anyone in Boston, or beyond, who has the legit experience that Burke does. Not only did she play an integral role in keeping HubSpot culturally grounded during its IPO, but she was key in weathering the PR nightmare the company faced last summer with the Dan Lyons thing. While it totally sucks that someone is so blind to the work done by Burke to question her in this manner, it did push her to create this rallying cry of a blog post. And, I believe, it definitely empowered more than a few women in the workplace.

NU – Nick Ducoff and the work he is doing at Northeastern with the Level Analytics Bootcamp. Level got some praise from none other than the original Innovator’s Dilemma scribe Clayton Christensen, who said of Ducoff and the program in a recent paper on higher education innovation, “Leaders looking to build disruptive models under the traditional university umbrella can take a page from Ducoff’s book.”

  • Why this is good? While Harvard and MIT tend to pump out the most innovative thinkers and business leaders, it is vital that the other institutions in town push the two so that they don’t become complacent. Ducoff’s work at Northeastern, the job William Brah has done at UMass-Boston, Debi Kleiman’s work at Babson, and John Gallaugher’s impressive innovation leadership at BC have made an impact in the number of young startups popping up all over Boston. With Harvard’s i-lab (totally biased), the Rock Center at HBS, the MIT Media Lab, and the recently announced The Engine, expect a boom in the next few year’s in student-started companies coming out of Boston. Boston VCs, if they are paying attention, have a more innovation potential within a short drive than almost anywhere in the country.

M&A – Word is that there is at least one MAJOR move happening in the next couple of weeks with a well-known Boston company. The question is will they be the acquired or the acquirer?