Qloud Fundraising: Striking out in Silicon Valley (Part 2 of 14)

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This is post #2 about the Qloud experience.  The previous post was about jumping ship and starting the company. 

Once we started Qloud, we started building the product and also started fundraising.  From day one, looking at our finances, we knew that we had 6 months to get the company to a place where we could raise outside capital.  Not only did we need to get the product built and working but we needed to hone our pitch.  We came up with what we thought was a compelling vision and set out to talk to investors.

Our pitch was that what we learned at Ruckus was that music discovery was a huge problem.  Talking to students it was clear that all discovery was word-of-mouth.  Qloud was going to be a way to allow people to find new music without having to ask your friend down the hall.  We were going to do that in 2 ways:

  1. we would offer a music search engine where you could search by tags and by demographic.  For instance, i want all the music tagged “happy” that is being listened to the most by men age 18-20 who live in Los Angeles.  This would return a list of songs that you could then sample.
  2. we would allow people to tag music inside their iTunes.  By creating a tag cloud, we would enable on-demand playlists for “happy” or “summer” or “breakup” inside the player.  This tagging and information from the iTunes would power the search capability provided in step 1.

Continue reading “Qloud Fundraising: Striking out in Silicon Valley (Part 2 of 14)” →

From VP to the Futon: Living in the Basement (Qloud 1 of 14)

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This is the first of some posts about the story of Qloud.  It’s now been over 8 years so I should start sharing the stories.  This first post is about how Toby and I made the leap to quick our jobs and start Qloud. 

Leaving Ruckus

Ruckus, a music startup, was failing as a startup.  Mostly because music subscriptions weren’t something that University students wanted.  They wanted music for their iPod.  We were giving them free music that didn’t work with their iPod.  So, it was time for a pivot as a business.  Toby and I did some research and found that music discovery was a big missing element in these student’s lives.  With unlimited music, they didn’t know what to download.  They couldn’t think of anything.  So, we wanted to give that to them.  And we wanted to do it on our own.  The fact that we came up with this idea while at Ruckus led to them trying to sue us later, but that’s another blog post.

I had started a company in college (HanoverDelivers.com) but i was a student then and starting it carried no risk.  I was now a 29-years old and leaving Ruckus meant leaving a good salary and a good job in a VC-backed startup.  I debated it for a while.  Ultimately, I ended jumping because it was a challenge that I wanted to take on.  Naively, it seemed like fun. 

The Basement

So, I jumped.  Toby and I started Qloud on Jan 1, 2006.   We had no office, no revenue and no product.  I had to reduce my expenses so I sub-letted my apartment and moved into Toby’s basement.  

Qloud office
Here's our basement office

Toby lived in the ‘burbs and had two young kids (age 3 and 5).  Every day, I would wake up early, work all day in the basement with Toby, come up for dinner with the entire family, play around for a little while and then retire to the basement to read, work more or just sleep.  I quickly became uncle Mike to the girls.  It was a really enjoyable time even though I was single and lacked any good dating prospects. 

Evie and Lucy in May 2006

We started right away.  We built some wireframes, did a deck (that’s what AOL taught us to do) and hired a few Romanian developers (Luci, Sergiu and Mitza).  One thing I noticed right away once we were focused on our new company is that I never, ever, thought that I should have stayed at Ruckus longer.  If you ask anyone who has quit their job and started a company they never will say that they left too early.  

I also am grateful that I was single and in my twenties. I had no expenses.  I had no expectations of money. I could take major risks in my life. I could focus all my energy on the company.  I think about my life now – with wife, kids, house, etc. – and while I’m much better at the startup game, I’m less likely to take risks like that.  My advice to anyone who is thinking of starting a company is to do it as soon as you can.  You won’t learn what it’s like without doing it.  You just won’t.  So start as soon as you can. 

We often worked outside

 

The Story of Qloud

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The 2 years from 2006 to 2008 Toby and I built a company called Qloud from nothing to over 20 million monthly users.  Those years were some of the craziest years I’ve ever had both professionally and personally.  I’ve broken the time into these stories.

I’ll be posting one every now and again. Enjoy….

  1. From VP to the Futon: Living in the basement
  2. Fundraising: Striking out in Silicon Valley
  3. On the Case: Getting Investment from Steve Case 
  4. Launching the worlds first real music search engine
  5. Developing with Romanians
  6. Inspiration Strikes: Pivoting
  7. In the Abyss: Running out of money
  8. Music Technology in 2007 and Our Use of YouTube
  9. Sean Parker and Facebook’s Platform
  10. Launching
  11. Blowing Up
  12. Happy Walters
  13. Selling to Buzznet
  14. What Success Feels Like

 

 

Welcome Sasha Lewhouse

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We had a big addition to the Lewis family last week.  On 1/1/2015 we welcomed Sasha Linda Lewis to the family.  She’s already changed our world quite a bit.  

When we had Hunter in 2012 I published a blog post about the birth.  It was a play-by-play of the entire day.  At the time I thought it’d be a fun little look at the event but over the years Diane and I found ourselves referring to it more than we had thought we would.  We found ourselves getting the time and events all wrong and were thankful that it was actually posted somewhere.  Also, we heard that others found it useful to hear how things actually go once you’re at the hospital.  Because of that, i’m posting again what actually happened at the hospital last week.  Enjoy… Continue reading “Welcome Sasha Lewhouse” →

Bezos Interview: Publishing and Fire Phone

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I recently read this interview of Amazon CEO, Jeff Bezos.  It’s pretty interesting.  Some thoughts:

eBooks / Publishing

I had always assumed that the print/book industry was really struggling – similar to the music industry.  However, Bezos’s quote of, “…the facts are wrong. Publishers are having unparalleled profitability, and the book industry is in better shape than it ever has been, and it’s because of e-books” is interesting.  

It’s also interesting that they take such a long-term view for the Kindle.  As Bezos states, “The vision for Kindle is every book, every imprint, in any language, all available in 60 seconds.”  That’s quite a mission.  They are definitely doing really well so far. 

The Amazon Phone

He admits that it’s a flop but contends that it’s just the start of them being in that business.  He states, “The Kindle is now on its seventh generation. The Kindle Voyage, the new premium product, is just completely killer. Fire TV, Fire TV Stick — we’re having trouble building enough. Amazon Echo, which we just launched. So there’s a lot of activity going on in our device business. With the phone, I just ask you to stay tuned.”

I wonder how many times they plan on iterating on the phone.  He talks about bold bets with things like Kindle, AWS and third-party resellers, but building a phone and competing against Apple, Android (they aren’t using core Android), Samsung and others is entirely different.  While audacious, i’m not sure I see how they can differentiate. 

Drones

He did an interview with “60 Minutes” and showcased their drone delivery system.  It was awesome.  He was asked about it here.  As you’d expect, he thinks the main thing holding it back is the regulatory issues, saying, “The most interesting part of this is the autopilot and the guidance and control and the machine vision systems that make it all work. As for when, though, that is very difficult to predict. I’d bet you the ratio of lawyers to engineers on the primary team is probably the highest at Amazon.“

I think it’s the same for self-driving cars (I have a bet they’ll be here by 2023).  It totally works right now but the world is just not ready for it.  There are so many unanswered questions, such as: if someone gets killed or severely injured by a self-driving car, who’s liable?  Is it the person who bought the car, the company that built the car? Is there some level of insurance that you can get?  

Anyway, some good thoughts in there.  It’s worth a read.

 

 

Driving in San Francisco

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I was out in SF these past two days.  A few observations: 

First, i was stuck in traffic for about 2 hours trying to get from Oakland airport to SF city.  The Bay Bridge was backed up and we just sat for hours.  Finally, when the traffic parted, i looked to my left and saw a rainbow and knew that everything going forward would be alright:

 

After hitting the city, i cruised down to Palo Alto area and saw an interesting sight.  It was my first sighting of the new BMW i3.  The i3 is the Bavarian automaker’s first fully electric vehicle available to buy. I thought it was fitting that i saw the electric car surrounded by the biggest polluting trucks i’ve ever seen.  Check it: 

I also had a great time jamming out to new favorite tune.  It’s Bruno Mars’s new song which just jams.  I saw it on SNL this weekend and was blown away.  Check it out: 

Anyway, it was a successful trip to the bay area although I’m happy to be headed back to Colorado.  Given the Jan. 3 due date of baby #2, i expect i’ll be taking a little hiatus from traveling for a while. 

 

Code.org and the Hour of Code

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This past Dreamforce conference I saw that there was a session being led by Hadi Patrovi.  I was intrigued as my former company, Qloud, competed directly with the company iLike were Patrovi was CEO.  We talked once briefly about merging the two companies, but ultimately nothing became of it.  We sold to BuzzMedia for $8million and they sold to MySpace for $16m.  Both products were then quickly shut down.  Oh well, it’s all water under the bridge.

So, i wanted to see what Hadi was up to.  Man was I in for a treat.  Hadi is the founder of Code.org which is doing some remarkable stuff. Code.org is a non-profit dedicated to expanding participation in computer science by making it available in more schools.  Their vision is that every student in every school should have the opportunity to learn computer science and it should be part of the core curriculum in education, alongside other science, technology, engineering, and mathematics courses, such as biology, physics, chemistry and algebra.  I totally agree. 

At Kapost we are constantly on the lookout for great engineers.  Always. We don’t close those job recs.  We are always looking. This is important because in the USA the number of people qualified for the jobs (demand) far outweighs the supply.

Programming jobs are growing at 2X the national average.   But, we also have an unemployment problem and we’re not doing anything to address these two things.

Even worse, in college only 2.4% of college students are graduating with a Computer Science degree – and that number is SHRINKING.  In high school it’s also lame as 9 out of 10 high schools don’t even offer a programming class and in 25 of the 50 states computer science can’t count towards a high school graduation math or science requirements. 

 

So, i’m happy they exist and apparently so is the rest of the country.  In their launch late last year they made quite a splash. Most companies and websites launch with a little fanfare and get an initial bump of users.  On their launch day they had:

  1. The President of the US, Obama, give a press announcement about it and Code.org’s “hour of code” happening that day
  2. All the major morning shows in the USA talk about the “hour of code”
  3. The pushed it hard enough so that 1 in 5 US  students had tried the “hour of code”
  4. Became the fastest website in the world to get to 15 million users.  

I’m really happy for the start that it’s received and I think it’s a great cause for us to tackle in America as we prepare for the future.  Personally, I had zero exposure to programming in high school.  I took an intro class in college and loved it.  That led to another class and before I knew it i was majoring in CS.  That led to a career in technology and I couldn’t be happier.  It’d be a shame if others couldn’t get that chance. 

 

 

 

 

Thoughts on Rubio

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The season starts tonight for the Timberwolves.  As part of that, this will be a defining year for Ricky Rubio.  

 

His contract is up at the end of the year and he has already rejected a 4 year $48m offer.  For the other positions they have:

  • Center: Pekovic and Deng – both above average centers in the league
  • PF: Thad Young – an above average PF in the league
  • SF: Andrew Wiggins – predicted to be the next Tracy McGrady
  • SG: Kevin Martin – pretty good 

Ricky is supposedly the leader of that group.  Looking at that lineup, if they don’t do well, it’s probably his fault and his inability to impact games.  If they do well, it’s likely because he has a great season.  As Rubio goes, so do the Wolves. 

They way I figure this goes is one of two directions: 

Direction ONE: the Wolves do well, i.e. approach 35 wins and compete for a playoff spot.  In this scenario, I think they pony up and pay Rubio more money

Direction TWO: the Wolves are a lottery team.  In this scenario, they don’t resign Ricky and draft a point guard in the lottery. 

That’s my guess.  Any thoughts?

 

Andrew Wiggins Era Begins & NBA Season Bet

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I’m excited for the NBA season to start. On Monday night the Twolves had their first pre-season game and it looks like Andrew Wiggins could be the real deal.  A summary of his performance from the blog post: 

Andrew Wiggins. There is obviously a player here. He led the team in minutes (32) and points (18). He took some poor 20 footers and wound up shooting 4-11 overall, but got to the line 10 times and made both of his threes. He also blocked 3 shots and grabbed 3 offensive boards. There is obviously stuff to work on, including getting stronger around the rim and ball handling, but there was a lot to like.

There’s also a good YouTube video of his action here: 

As we do every year, we place a friendly bet in the office for the season.  This year it’s between Niraj and Ian.  Here is how our teams are projected to do: 

  • Timberwolves: Projected 26.5 games won
  • Nuggets: Projected 35.5 games won
  • Pistons: Projected 35.5 games won

The bet we’re making with each other is whichever teams performs the worst relative to their projected win count, the loser buys the winners a lunch of their choice at Rio Grande.   Now, let’s get it started!

 

Thoughts on Apple’s iPhone 6 & ApplePay

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I listened to the announcement last week and have a lot of thoughts on the upcoming iPhone. 

Apple’s launch event came, and delivered (mostly) what had been leaked and/or expected: a larger iPhone & a phablet, payments and a smart watch. The phones are mostly predictable: the customer is always right, and the customer has decided to optimise for pocket size and experience over thumb size (the changes in iOS7 & iOS8 have made it possible to do this, incidentally).

Why did they make it bigger?

Basically, Apple dominates the high end of the phone market.  They like it that way.  To date, there has been a few high-end Android phones eating away at their sales (mostly Samsung phones).  There are currently six reason people buy these phones (taken from Benedicts’s Blog): 

  1. Their operator subsidies an Android but not an iPhone – this has now ended, with Apple adding distribution with all the last significant hold-outs (Sprint, DoCoMo, China Mobile)
  2. They don’t particularly care what phone they get and the salesman was on more commission to sell Androids or, more probably, Samsungs that day (and iPhones the next, of course)
  3. They have a dislike of Apple per se – this is hard to quantify but probably pretty small, and balanced by people with a dislike of Google
  4. They are heavily bought into the Google ecosystem
  5. They like the customizations that are possible with Android and that have not been possible with iOS until (to a much increased extent) iOS8 (more broadly, once could characterize this as ‘personal taste’)
  6. They want a larger screen. 

The first has largely gone, the second is of little value to an ecosystem player and nets out at zero (i.e. Apple gains as many indifferent users as it loses) and the third is small. Apple has now addressed the fifth and sixth.  That is, with the iPhone 6 and iOS8, Apple has done its best to close off all the reasons to buy high-end Android beyond simple personal preference.  As Benedict Evans states, “You can get a bigger screen, you can change the keyboard, you can put widgets on the notification panel (if you insist) and so on. Pretty much all the external reasons to choose Android are addressed – what remains is personal taste.”

What’s the deal with ApplePay?

A lot of people are saying “they are going to make a ton of money with ApplePay!” and “They are going to crush PayPal!” – both are not even close to true.  If you look at what they are actually doing here, it’s not to take on banks, credit cards or any actual payment system.  They are taking on the wallet.  If you look at what they did with music – they didn’t put Universal Music out of business, they didn’t come up with a better way to be a label, they just crushed the music store (like Tower Records).  It’s the same here.  You still need a credit card.  You still need a bank to issue thecard.  You just don’t have to pull it out or even have it when buying something.  

 

I just pre-ordered my new iPhone 6 (not the Plus) to get it on Friday.  What about you?  You buying one?

 

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