About Me 0077: Making Money Web

Bump Technologies makes an app that lets people bump their phones together to exchange things like business cards, photos and even money.

On Tuesday, Bump will announce that it has raised $16.5 million in venture capital. The firm Andreessen Horowitz is Bump’s newest investor, and its previous investors, including Sequoia Capital and Ron Conway, also contributed.

Bump started in 2008 as a way for people to exchange contact information without trading old-fashioned paper business cards. But in its newest incarnation, the start-up wants to become a mobile social network for exchanging photos and messages with family and friends.

Now, in addition to contact information, people with iPhones or Android phones can share photos, music, calendar appointments and location, and can also become friends on social networks and send messages to one another. Other apps also use the technology. PayPal, for instance, lets people exchange money by bumping their phones, and two apps trade sexual compatibility information.

The company is changing direction because people started using Bump more for social interactions than business ones, said two of its founders, David Lieb and Jake Mintz. For example, each day people now share about 40,000 contacts but almost a million photos.

“Bump just opens up a whole new landscape of social interactions and interpersonal functions and uses and photo-sharing and transactions, all based on physical proximity,” said Marc Andreessen, the Andreessen Horowitz partner who will join Bump’s board.

There are many other social networks that people already use on their phones to share photos, location and status updates, like Facebook, Foursquare and Instagram.

Bump is different, the founders said, because it enables private exchanges between two people, unlike others that are for publishing messages or photos to wider groups or the public.

“It’s a proximity-based social network, for people and things you’re actually physically interacting with,” Mr. Lieb said.

Bump is one of a group of mobile apps that give people a way to use Internet-connected cellphones to bridge the virtual and physical worlds.

That could become a way to make money, the founders said. For example, people could someday bump their phones to get information or coupons from businesses or brands. “That could be valuable to merchants,” Mr. Mintz said.

Other apps, like Shopkick, offer similar ways for businesses to reach customers. Bump is not making money yet, beyond a bit from other companies that license its technology.

Bump works by gathering several signals from phones, including location and motion detection. Those signals are sent to Bump’s servers, where Bump figures out if another phone in the same place just experienced a bump, then matches the two phones. It all takes place immediately.

Andreessen Horowitz has been busy. On Monday, the firm also announced that it invested in Groupon’s $950 million round of fund-raising. The firm invests in very small Web companies and very big ones, and the Bump and Groupon investments exemplify both ends of the spectrum.

Better Personal Advertising

First up today was Michael Greenberg presenting Better Personal Advertising. Mike wants to manage online identity on behalf of consumers so that they can maintain multiple identities for different types of sites, say photo, career, etc. and present themselves better in those different contexts.

Mike's customer acquisition strategy is weak at this point, and he also has a rather broad strategy in approaching this market. While I do believe there is an interesting opportunity in identity management, I am going to need to work much more closely with Mike to extract the nuggets out of his idea, and give shape to a viable go to market strategy.

Remote Stylist

Then Kelly Fallis pitched Remote Stylist, a personalized interior decoration advice service coupled with e-commerce in the domain of furniture and furnishings. Kelly's business has already done about $150,000 in revenue in 2010, which tells me that she has successfully validated at least some of her assumptions. Kelly has a lot of gaps in her customer acquisition strategy, as well as positioning, and she is seeing customers from commercial and residential clients. All this is too broad, and needs tightening up on multiple dimensions.

I like the business idea a lot, and in 1M/1M, we know a lot about building Web 3.0 and e-commerce businesses, so I would love to work with Kelly to help her figure out the various nuances of building a successful e-commerce business, especially one that differentiates on personalization. I have repeatedly said that personalization is an open opportunity in Web businesses, and needs to be tapped this decade. For Kelly, a good starting point would be the 1M/1M Curriculum, where we can offer her a lot more on the subject.

BizzGenie

Next Sajeeva Bora with tekMunk Software Solutions discussed BizzGenie, a business software concept to help retailers manage the decision-making between "shop floors and top floors." Sajeeva and his cofounders have good domain knowledge of the retail business, but have not yet done sufficient validation of the idea. He is looking for money and naturally, getting rejected by investors for lack of validation. As I have said before, this is not the right stage to look for money. There's more work to be done to prepare for a funding round.

Food Is Our Medicine Vision

Nwenna Kai then presented Food Is Our Medicine Vision, an online training concept through which she wants to teach community leaders how to create healthier living concepts like organic gardens, etc. in urban areas. Nwenna has surveyed about 200 readers of her blog, and they have told her that they would be willing to pay $400 to $800 for such courses.

Nwenna came to the roundtable with the question: What now? Where do I begin? Well, that's a rather large question to answer in five minutes, but she obviously needs to start validating her business within that group of 200 users who have said they're willing to pay for her offering.

Udemy

Up last was Gagan Biyani pitching Udemy, an online marketplace for educators and experts to teach various topics. Gagan has about 150 completed courses on the site so far, and about 10 of those are monetizing. He has run some experiments within the entrepreneurship training vertical, and has seen success when he has brought on known thought leaders. However, he faces the problem that the top tier thought leaders are unwilling to set up shop on his site. They have their own programs under their own brands.

Interestingly, Nwenna, who pitched right before Gagan, would be very interested in setting up shop on Udemy, and teaching her concepts and bringing her audience onto Udemy. We did this spot validation at the roundtable, and I believe, Gagan got a customer. However, I'd like to see a more focused, vertical specific go-to-market strategy in Udemy. At some level, Gagan's focus on entrepreneurship courses doesn't really align with Nwenna's target audience.

I have thought a lot about how to make an entrepreneurship education and eco-system scalable and accessible to a vastly larger number of people. The answer to that question, I believe, is the 1M/1M Premium Lounge. In fact, at a time when we're facing severe youth unemployment in America and Europe, and the emerging markets are just starting to build their entrepreneurship eco-systems, we really need to think deeply on how more and more young people can be efficiently, rapidly and cost-effectively be trained in entrepreneurship.

You can listen to the recording of today's roundtable here. Recordings of previous roundtables are all available here. You can register for the next roundtable here.

Sramana Mitra is the founder of the One Million by One Million (1M/1M), an educational and incubation program that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. She is a Silicon Valley serial entrepreneur and strategy consultant who writes the blog Sramana Mitra On Strategy, and is the author of the Entrepreneur Journeys book series and Vision India 2020. She has a master's degree in electrical engineering and computer science from the Massachusetts Institute of Technology.

Photo by Bessarro

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Monday, January 24, 2011

Making Money Web

Better Personal Advertising

Remote Stylist

BizzGenie

Food Is Our Medicine Vision

Udemy

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