November 14, 2024

You are here: Home / Archives for founders

Tech Start-Up Benefits from ABC’s ‘Shark Tank’

June 12, 2013 by Leave a Comment

The start-up’s co-founders, Ryan Frankel, 29, and Kunal Sarda, 31, promote their company as the world’s only instant, 24-7 “human-powered” translation service. Inspired by a harrowing episode when Mr. Frankel could not communicate the symptoms of a virulent stomach bug to a pharmacist in Beijing, the service takes just 15 seconds to put mobile users in touch with a human translator fluent in both English and any of 11 other languages. In other words, it combines the speed of Google Translate with the precision of a traditional translation service — at least that was the pitch Mr. Frankel and Mr. Sarda made to the sharks.

Within 72 hours of the segment being shown, 20,000 new customers had downloaded the VerbalizeIt app, according to Mr. Frankel. Daily revenue, he said, more than tripled. The company charges about $1.50 a minute from individual consumers and as much as 27 cents a word from businesses that use the same network of 10,100 freelance translators to translate documents and videos.

The segment became one of the most debated of the show’s fourth season. Many “Shark Tank” followers discussed on chat rooms, blogs and Twitter how Mr. Frankel and Mr. Sarda erred when they turned down an offer of $250,000 for 25 percent of their company from Mark Cuban, a shark who owns the Dallas Mavericks and has previously invested in translation companies.

Their thinking was that while Kevin O’Leary, a shark and a Canadian financier, topped Mr. Cuban’s offer with a bid of $250,000 for 20 percent of VerbalizeIt, Mr. Cuban would have brought superior experience and connections. But what most of the show’s followers did not realize was that what seemed to be happening on TV that night was not exactly how things unfolded after the cameras stopped rolling. (Shocking, right?)

In reality, the VerbalizeIt founders turned down Mr. O’Leary, too. Last July, a week after they were taped shaking hands with him, Mr. Frankel and Mr. Sarda called Mr. O’Leary to tell him they had decided to pursue a different set of investors.

“A lot can happen between the time we finish shooting and a segment airs,” said Mark Burnett, the British-born creator of “Survivor” and “The Apprentice” whose company is a co-executive producer of “Shark Tank.”

Inevitably, some deals fall apart when the sharks’ advisers get a closer look at the entrepreneurs’ claims. In other cases, it appears that entrepreneurs come on the show with no real intention of closing a deal.

“They say ‘yes’ on the show because it makes for a better story,” said Rob Merlino, author of SharkTankBlog, who said he has interviewed more than 70 of the show’s participants. “But they were always in it strictly for the exposure.”

Mr. Burnett insisted these cases represented a small fraction of the 253 entrepreneurs who have appeared on the show. Even so, the producers are well aware of the value that seven million viewers, and potential customers, can bring to an early-stage business. It is the reason participants are willing to sign over a small equity share just to appear on the show. The standard appearance contract entitles the show’s producers and ABC to 5 percent of the company or 2 percent of future royalties, regardless of whether a deal materializes with a shark. The show’s producers declined to comment on the contract.

As for Mr. O’Leary, he said he has learned to factor the exposure “Shark Tank” generates into his own calculations. “I’m always looking for that company with a great concept that just needs the platform we provide to really take off,” he said.

A perfect example, he said, was Wicked Good Cupcakes, a cupcake shop on the South Shore of Massachusetts that hit on the idea of shipping its fresh-baked confections in single-serve Mason jars and sending them anywhere in the country. In an episode shown in April, Mr. O’Leary struck a deal with the mother-daughter team that runs the company, agreeing to give them $75,000 to finance their move into a full-scale commercial kitchen in exchange for $1 from every cupcake sold until he gets his money back and then 45 cents a cupcake in perpetuity. In the eight days after the segment aired, he said, the company sold $250,000 worth of cupcakes.

“I thought VerbalizeIt could be another Wicked Good Cupcakes,” Mr. O’Leary said.

Mr. Frankel and Mr. Sarda, however, had other plans. At the time of the taping last July, they were enrolled in Tech Stars, a start-up accelerator program. Three months after returning to Boulder, Colo., to finish the program, they accepted a deal offered by several mentors. It staked them to $1.5 million at a significantly higher valuation than Mr. O’Leary had placed on the company.

For Mr. Frankel and Mr. Sarda, former classmates at the University of Pennsylvania’s Wharton School, appearing on the show has been a win-win-win. While not all of the feedback they received from the sharks was positive, Mr. Frankel said the critique helped them rethink several aspects of the business.

“The segment was only eight minutes, but we were in there shooting for 50 minutes,” he explained. “It was just like any intense investor meeting.”

For example, Mr. Cuban hammered away at whether they had the infrastructure in place to serve businesses. Mr. O’Leary encouraged them to license their back-end technology to large translation companies that occupy the higher end of the market.

“You look at where we were then and where we are now, and we’re almost an entirely different company,” Mr. Frankel said. “And a lot of that has to do with the feedback we got on ‘Shark Tank.’ ”

On the Friday night the episode appeared last month, VerbalizeIt held a viewing party for friends and employees at its Manhattan offices. Earlier in the week, the company had posted ads on career forums offering multilingual residents $10 an hour to attend the party and bolster their ranks of translators for an expected wave of post-show calls.

After the episode ended, a group of translators sat a table as cellphones went off around them. One call came to Austin Jacobson, a 22-year-old part-time drummer and French speaker, who had relocated from Washington just two weeks earlier. “Hello, VerbalizeIt, ready to translate,” he said.

“I need to know how to say, ‘I’m sorry, I love you,’ ” said a man on the other end of the line.

“Well, there are a couple of ways you can say it,” Mr. Jacobson responded. “You can say, ‘Je suis désolé, je t’aime.’ Or you can say … “

“Just say it one way,” said the man, more urgently. “She’s standing right here.”

“Je suis désolé, je t’aime.”

“Thank you,” said the man softly.

A moment later, an update flashed on Mr. Jacobson’s work history account. Thanks to VerbalizeIt and “Shark Tank,” the aspiring jazz musician had helped a young couple find love and made 20 cents.

It could not have been scripted any better.

Article source: http://www.nytimes.com/2013/06/13/business/smallbusiness/tech-start-up-benefits-from-abcs-shark-tank.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Corner Office: Steve Case on Risk-Taking, or Lack Thereof, in Business

May 5, 2013 by Leave a Comment

Q. What were some early leadership lessons for you?

A. The earliest ones probably related to just understanding that everybody is wired a little bit differently. Just because you think a certain way or are inclined to react a certain way doesn’t mean everybody thinks and reacts the same way. I think people just naturally presume that they look at a problem in a certain way and frame the issue in a certain way and that everybody else would look at it the same way.

I learned in my 20s that there are a lot of different ways to look at things, a lot of different filters that people put on, partly based on how they analyze the circumstance but also based on their own history and perspectives and biases and instincts and so forth. You have to be open-minded about that and listen to what’s being said — but also to what’s not said sometimes. Those discussions can lead you to different places.

Q. Other big leadership lessons?

A. The core one is a Thomas Edison quote that summarizes my perspective on things, which is, “Vision without execution is hallucination.” I do believe in vision. I do believe in big ideas. I do believe in tackling problems that are complex and fighting battles that are worth fighting, and also trying to, in my case, create companies or back companies. That can change the world. The vision thing is really important — but the execution thing is really important, too. Having a good idea is not enough. You’ve got to figure out some way to balance that and complement that with great execution, which ultimately is people and priorities and things like that. You have to strike the right balance. If you have those together, I think anything is possible. If you don’t have both of them working together in a complementary, cohesive way, you’re not going to be successful.

Q. What about mentors?

A. One of the co-founders of AOL, Jim Kimsey, said something when I was about 26. My view, in the early part of my career, was that appearances mattered, that looking like you’re working hard mattered. I remember Jim saying once — and partly I think it relates to some of his training in the military — that really the art is trying to set the priorities and assemble a team so you wake up in the morning and actually have nothing to do. It’s impossible to achieve, but it’s a good goal to have the right priorities and the right team in place so they can execute against those priorities. It’s almost the opposite of how I was approaching it. 

The objective should not be looking busy, but actually creating a process that allows great things to happen in a way that you can be less involved. So it was sort of a process of letting go, which is hard for entrepreneurs. But at some point you’ve got to let go and you’ve got to step back. Ultimately, that is about trusting the people you’ve got — but also trusting yourself, that you’ve set the right context in terms of the vision, the priorities, the team.

Q. With the benefit of time and hindsight, thoughts on the AOL-Time Warner merger?

A. They were both terrific companies. I think everybody saw it as a big idea to bring them together and help Time Warner move into the digital age and help AOL move into the broadband age. Well, it didn’t happen. The reason it didn’t happen is because the execution wasn’t up to the vision — going back to the Thomas Edison thing — and the primary reason was there were not the relationships and trust with people.

Ultimately, it came down to poor execution of what I thought was a good idea, and that was largely attributable to people and relationships and resentments and pride and egos. There were some substantive strategic debates, but it was mostly about people and trust and relationships. I’ve seen where it works well. It can really accelerate and animate a company to do things that nobody thought was possible. When it’s not working, you can’t get much done.

Q. On reflection, what should you have done differently?

A. It goes back to the people side. Both of the answers are probably somewhat impractical, but I think it would have resulted in a better company. One would be that if we’d brought these companies together — and I say this somewhat in jest, but it makes a point — we should have fired the top 50 executives, myself included, and hired 50 new executives who brought new perspectives and could look at this through the focus on the future, not in the rearview mirror. It would have done better. There is a reason why that happens whenever a new president is elected. They bring in an entirely new team to get behind their vision and execute that vision. If it were the same 50 people from the prior administration being asked to implement new policies for the new president, it would not work.

Article source: http://www.nytimes.com/2013/05/05/business/steve-case-on-risk-taking-or-lack-thereof-in-business.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

A Profit, Though Slim, for BlackBerry

March 28, 2013 by Leave a Comment

The annual loss, which tax benefits reduced from an operating loss of $1.2 billion, compared with $1.16 billion in net earnings a year earlier.

In the latest quarter, which ended March 2, the company lost $18 million from operations. But recovery of income taxes transformed that into a $98 million profit for the quarter, or 19 cents a share.

BlackBerry has struggled with decining sales. Revenue in the latest quarter was $2.6 billion, compared with $2.7 billion in the same period a year ago. Annual revenue fell to $11 billion, from $18.4 billion a year earlier.

For about one month of the quarter, the first of its new phones, the BlackBerry Z10, was on sale in Canada, Britain and some other markets, but not the United States. BlackBerry said that it shipped about a million of the handsets during that time.

It nevertheless reported that there were 79 million BlackBerry subscribers worldwide at the end of the period, a loss of about three million users. Until the third quarter of the fiscal year, BlackBerry, formerly known as Research in Motion, had consistently increased the number of subscribers.

In an unanticipated move, the company announced that Mike Lazaridis, one of its co-founders, would cut all formal ties to BlackBerry in May. Along with Jim Balsillie, Mr. Lazaridis stepped down as co-chairman and co-chief executive in January 2012. Although Mr. Balsillie left shortly afterward, Mr. Lazaridis remained on BlackBerry’s board as vice chairman.

Last week, he announced plans to start an investment fund focused on companies working on computers based on principles from quantum physics.

“With the launch of BlackBerry 10, I believe I have fulfilled my commitment to the board,” Mr. Lazaridis said in a statement.

ATT became the first American carrier to offer the new phone last week. But visits to several wireless stores on Wednesday found striking differences in sales support for the phone that BlackBerry hopes will revive its much diminished fortunes.

At several locations, including an ATT store on Fifth Avenue in New York and another near Union Square in San Francisco, the Z10 was lumped in with other phones, some two years old, while signs and promotional material were absent. But at an ATT store in New York’s busy Union Square, the Z10 was heavily promoted. A salesperson there who identified himself as a BlackBerry specialist gave a deep demonstration of the device, including its ability to switch between corporate and personal apps.

The unevenness of presentation was also apparent at T-Mobile USA stores, which this week began selling the Z10, as well as the Apple iPhone 5 and Samsung Galaxy S 4, for $100 down and 24 monthly payments of $20. Verizon Wireless, which has a long association with BlackBerry, was to begin selling the Z10 on Thursday.

Brian X. Chen contributed reporting from New York and Quentin Hardy from San Francisco.

Article source: http://www.nytimes.com/2013/03/29/technology/a-profit-though-slim-for-blackberry.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

You’re the Boss Blog: RocketHub Ponders Its Future in Crowdfunding

December 26, 2012 by Leave a Comment
The Agenda

How small-business issues are shaping politics and policy.

We have published a story about why the Securities and Exchange Commission has struggled to write the rules that will carry out equity crowdfunding for small businesses. One company that has been at the forefront of the effort to influence those rules is RocketHub, a donation- and rewards-based crowdfunding site based in New York. Itself a small business, RocketHub debuted in 2010 and now has about 10 employees, including its four founders — but is still viewed as one of the largest American crowdfunding platforms.

The Agenda spoke recently with Alon Hillel-Tuch, 28, one of RocketHub’s founders and its chief financial officer, about the company’s prospects. The interview has been edited and condensed.

At this point, do you know if you’re going to do equity crowdfunding?

That’s a good question — a very good question, actually. I don’t believe anybody should be telling you that their intent is to do this without knowing what the rules are going to look like. If we don’t see the rules panning out in a way that actually makes sense and adds value to both sides of the table, we’re not going to do it.

So let’s say you end up doing crowdfunding — how does that change your business? What can you keep and what will you have to add?

When it comes to the experience on our site, we envision it to be very similar to the rituals that our users are accustomed to now. We would be putting the right team in place to handle that component as well, but as commensurate with growth in that space. A lot of the infrastructure we have now on the back end is very much applicable to equity crowdfunding. Basically, when it comes to our architecture, we’re already set up to handle a predominant share of the Jobs Act as it is written out right now. If the rules come out with a lot of additional stuff, then we would have to develop towards it, but for us that’s not a big concern at all.

How would you differentiate yourself from the competition?

We have actually pushed for standardization. I want every investor to see as much as possible the same deal structures when they look at projects. So when you go to RocketHub for equity crowdfunding, you should understand the deal structure for every project you go to. I would like to see financial statements in a similar format; I would like to see offerings presented in a similar format. So the differentiation really comes in what we do now with education. So if you go to RocketHub.com and click “Success School,” it’s a whole entire educational site that teaches you all the different steps of crowdfunding — there’s a tool kit that gives you different tools and teaches you how.

And one of the things we’ve noticed is that people raise funds and then say, “What do I do next? How do I take these funds to fulfill what the rewards are that I guaranteed as well as hit the goals that I’ve set?” You can launch a project with us and then do the next steps through us as well. If you’ve got a thousand orders to fulfill, and you’re not able to any more do it from your home, we work with groups that can actually help you scale it.

Do you feel like you need to raise more money to execute a crowdfunding platform?

That’s actually very similar to a question the S.E.C. asked us. They asked how much would it cost to build a platform?

And what did you say?

We told them there was no real fixed number on that. The technology is not that complicated on the surface, it’s the execution of it that’s hard. So it’s really about how much money do I need to hire the right people.

Do you think you need to raise additional funds to do this?

We won’t necessarily have to. It will just accelerate the rate at which we’re able to support our users. If I wanted to do equity crowdfunding, and I start just with the major cities initially, if I raised more funds, I might be able to service also certain rural areas I am very excited about.

Can you see yourself raising that money through crowdfunding?

No. Probably we won’t.

Why not?

Because we already have enough other investors already on the table from previous rounds. If we needed to raise another round, they would initiate it. And a platform raising funds for itself might get into some issues from a compliance perspective that I think is a little bit of a gray area.

Article source: http://boss.blogs.nytimes.com/2012/12/26/rockethub-ponders-its-future-in-crowdfunding/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: ,

Bucks: The Over-the-Wall Portfolio for Excess Cash

December 17, 2012 by Leave a Comment

Carl Richards

Carl Richards is a financial planner in Park City, Utah, and is the director of investor education at the BAM Alliance. His book, “The Behavior Gap,” was published this year. His sketches are archived on the Bucks blog.

If you’re an entrepreneur, you’ll spend years pouring everything — time, money, passion — into your businesses with the hope that someday it will pay off. If things go well, you’ll wake up one morning and find yourself with excess time, energy and, of course, cash.

Great! But now you have to figure out what do with that cash, and this is when things can get dangerous, fast.

Most entrepreneurs get twitchy at the thought of idle money. They’re used to taking big chances and are comfortable with risk. So, there’s a temptation to assume the same approach to controlled risk when investing outside their business.

One of the smartest guys I know runs an incredibly successful company but provided a textbook example of this approach. As the business matured and started throwing off excess cash, he began thinking about what to do with it. He invested in some pretty strange ventures. He backed a doctor with a new toothbrush design, a car wash and a company that made kayak paddles.

He knew nothing about any of these businesses. Not surprisingly, he lost that money.

Instead of sticking to what he knew to make money and protecting the profits, he made the classic mistake of thinking he could do more. He took risks with money that he promised himself he would never lose.

It’s like what Warren E. Buffett said about the super-smart and incredibly wealthy founders of Long-Term Capital Management, who ended up doing something really dumb: “To make money they didn’t need, they risked what they did have and did need, and that’s foolish.”

Don’t be foolish. If you’re fortunate to have enough money to last for a good long while, the game can, and should, change. Of course you can still focus on growing your business. Or, if you’re a serial entrepreneur, you can build the next one. But at the same time, you can start building a portfolio to protect your future.

One thing I have heard over and over when interviewing successful entrepreneurs is the idea of what I call the Over-the-Wall Portfolio. Of course, the entrepreneurs didn’t call it that. They often referred to it as the safe money or the money they promised their spouse they’d never lose.

Whatever you call it, the concept is pretty simple: You take the excess cash your business generates, or the lump sum from the sale of a business, and throw it over the wall into stable (and probably boring) investments.

Then you forget about it.

The allocation of an Over-the-Wall Portfolio will vary, but here are a few general guidelines to consider:

  • Boring. Remember: excitement comes from being an entrepreneur (or the movies), not your over-the-wall money.
  • Liquid. If something goes wrong, you want to be able to get to the money.
  • Diversified. You can get rich by putting all your eggs in one basket, but you stay wealthy by being diversified.
  • Passive. The Over-the-Wall Portfolio can’t depend on you for day-to-day management. You’re too busy with your business and having a life. The last thing you should be doing at night is logging into your day-trading account.

The best part of this strategy? It lets you get back to doing what you do best — running your business. But you get the added comfort of knowing that if your business fails, you’ll be O.K.

Eventually, my entrepreneur friend recognized his problem. One day, he told me, “Carl, I finally figured it out. My job is to stay focused on my business and make money. And with the money I make, I have to be sure I never lose any of it.”

I couldn’t have said it better myself.

Article source: http://bucks.blogs.nytimes.com/2012/12/17/the-over-the-wall-portfolio-for-excess-cash/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Sustainable Profits: What Do You Do With the Brilliant Jerk?

September 26, 2012 by Leave a Comment
The Next Level

Avoiding the pitfalls of fast growth.

My most recent experience with a Brilliant Jerk occurred when I was helping a group of 25 doctors thrash out their shared values as they tried to become a real company.

Toward the front of the room, I spotted the Brilliant Jerk. He was the one doctor who dampened the unity with subtle but consistent complaining about why the group couldn’t do some things and shouldn’t do others. When he spoke, everyone became quiet and listened — not out of excitement for what he was going to say but out of respect. Yes, the doctors had respect for the Brilliant Jerk.

Here’s why: He was always the first to cover for doctors who were on call. He was always the first to volunteer to work on holidays. He had the most articles published by the American Medical Association. He was the first to get new training and share it with others one-on-one. And by the way, he was the highest revenue producer of all the doctors in the group. In fact, he was producing twice the revenue of some of the doctors. He had been the third doctor to join the group and without his revenue, the start-up could not have been successful.

But here’s the problem: While he had performed brilliantly for the start-up, he was not performing brilliantly for a company that was trying to grow. The brilliant start-up talent had become the Brilliant Jerk. I define Brilliant Jerks as specialized, high-producing performers. They are not, however, brilliant business people, and that is what companies need during periods of rapid growth. There are a lot of hurdles to cross when companies move from start-up to growth, including dealing with chaos and changes in culture. But the biggest hurdle is dealing with the human factor — how you move, shift and replace people as the company grows into the next level of success.

Most high-growth companies start with two or three founders who have a common idea and are passionately committed to the mission. The cause creates shared values among the founders and early employees, and work is fun. Most days, everyone feels like part of the team and does great work; some days it feels like “Survivor” — as when you are working nights and weekends to ensure that the start-up is still in business come Monday morning. At this stage, everyone is important. Decisions are usually made when everyone is in the room or at least within earshot.

But then, with this kind of commitment, hard work and passion, the company starts to grow and maybe even double in size and revenue. All of a sudden, instead of being part of a scout troop, you are riding a rocket. Work is fun and exciting but with constant turbulence, and all of the participants have to give it their all to keep the rocket in orbit and in alignment on the new mission of growth. Inevitably, at least one of the founders or early superstars will not like the new mission. This person will still want to be the Brilliant Talent of the start-up — instead of being a contributor on the rocket, where everyone has to step up to new roles and where new superstars are being made.

I had a brilliant start-up talent when I was building my company, STI Knowledge, into a global brand. When we hired him, we hired over our heads. He had juice. We marveled at his manic performance, which often propelled all of us. When we had a crisis, he could solve it. Yes, he could have taken bigger jobs at bigger salaries but he chose to work with rebels. He knew we were right in our vision and mission, and he knew we could not do it without him. But in trying to maintain his glory, he struggled to let us go and grow.

The growth phase required the addition of staff members, systems and structure that changed the dynamics of the company. While the brilliant talent was a high-tech genius, the new stars were being made in areas like sales, marketing and education. He felt left out. He was no longer needed in every meeting. He could not simply pop into the chief executive’s office four or five times a day like old times, and the new processes and systems hindered and even prevented him from being the savior. Right before our eyes, the brilliant talent became the Brilliant Jerk.

I have listened to Brilliant Jerks proclaim, “I am the one who is always on call, who drives the most revenue, who is here on weekends and who has the knowledge.”  And the Brilliant Jerk speaks the truth. But I have also seen him stick his head in the door and deflate an entire management team. A growth company needs enablers, not disablers.

So what do you do with the Brilliant Jerk? Generally, the thought of firing the Brilliant Jerk is not even considered. Entrepreneurs are builders and growers, and termination of the Brilliant Jerk is not one of their basic instincts. Sheer loyalty compels most entrepreneurs to try to find a way to make it work. But that’s almost always a mistake. That’s what happened with the Brilliant Jerk doctor and the medical group. He hung around, unhappy, until he abruptly quit one morning — and then spent the next couple of years attacking the company from every conceivable angle: poaching employees, helping competitors and starting legal battles.

So what’s the right answer? Get rid of the Brilliant Jerk as fast as you possibly can.

The biggest waste of time in a high-growth company is the period that falls between when you know someone does not fit the growth culture and the time you terminate the relationship. On average, I’d say the Brilliant Jerk hangs around for 1.5 years; decisive action can limit the period to less than six months. The likes of Bill Gates, Steve Jobs and Roger Ailes have had no problem showing Brilliant Jerks the door, and all built world-class brands faster and better than the rest of us. I wish I could tell you I was as tough as those guys. I learned the hard way by not taking action when I should have.

I can tell you from personal experience that coddling the Brilliant Jerk — letting him work from home, consoling him,  giving him special assignments — does not work. It just kicks the can down the road. At my company, I was worried about the impact his firing would have on other employees who had shown him respect. To my surprise, the reaction was, “What took you so long?”

One of the worst feelings I have ever experienced was looking at the Brilliant Jerk and saying, “We have a vision, and I have decided you are no longer a match for where we need to go.” One of the best feelings came the next day when everyone was moving forward together.

Cliff Oxford is the founder of the Oxford Center for Entrepreneurs.

Article source: http://boss.blogs.nytimes.com/2012/09/26/what-do-you-do-with-the-brilliant-jerk/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: ,

DealBook: AT&T Spars With F.C.C. Over Withdrawal of T-Mobile Deal

November 26, 2011 by Leave a Comment

Nothing is easy when it comes to ATT‘s proposed $39 billion takeover of T-Mobile USA — apparently not even when it comes to withdrawing the deal from the government approval process.

ATT’s top internal lawyer, Wayne Watts, said in a statement on Friday that the telecommunications giant should be allowed to withdraw the deal from consideration by the Federal Communications Commission without needing permission from the regulator.

Because ATT withdrew its application for approval before F.C.C. commissioners voted on a proposal by the agency’s chairman, Julius Genachowski, earlier this week to move the case to an administrative law judge, the company should be allowed to pull its submission, Mr. Watts said.

ATT withdrew its application for approval in the early morning hours of Thanksgiving, but said it planned to resubmit the deal for the agency’s consideration at a later date.

The F.C.C. has indicated that its options include granting ATT’s withdrawal, but potentially with prejudice, meaning that the company could not refile for approval later, or moving ahead with the administrative law case.

“We have every right to withdraw our merger from the F.C.C., and the F.C.C. has no right to stop us,” he said. “Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.”

An F.C.C. representative was not immediately available for comment on Friday evening.

The statement highlights ATT’s growing combativeness as the T-Mobile deal founders amid government opposition. The F.C.C.’s push to hold a hearing on the deal follows a lawsuit by the Justice Department and several state attorneys general seeking to block the transaction.

ATT announced early on Thursday that it planned to record a $4 billion charge in its fourth quarter in case the deal collapses, the company’s biggest acknowledgment yet that the merger is in peril. The charge would cover a majority of a break-up fee owed to T-Mobile’s parent company, Deutsche Telekom, if the transaction fell apart because of regulatory opposition.

Yet the withdrawal of its F.C.C. application signals a hail-Mary legal strategy. ATT is hoping to settle the Justice Department’s claim — or win in court — and use that victory to strong-arm the F.C.C. into approving the merger.

ATT is still exploring ways to settle with the Justice Department, including by selling off assets. But the company has indicated that it is also prepared to do battle in federal district court in Washington, District of Columbia when that trial begins in February.

Mr. Watts’s full statement is below:

Yesterday ATT withdrew its application with the F.C.C. for approval of our merger with T-Mobile. We took the required actions, announced this publicly, and filed securities disclosures accordingly. We believe the record will show that we withdrew our merger application before the F.C.C. voted on the chairman’s proposed hearing designation order.

It has since been reported that the F.C.C. must approve this withdrawal. This is not accurate. The F.C.C.’s own rules give us this right and provide that the F.C.C. “will” grant any such withdrawal. Further, this has been the F.C.C.’s own consistent interpretation of its rules.

We have every right to withdraw our merger from the F.C.C., and the F.C.C. has no right to stop us. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.

Article source: http://feeds.nytimes.com/click.phdo?i=64d7fbb90e5200238aeb495dac543909

Filed Under: Business News Tagged With: , ,

Start: High School Entrepreneurs Promise to Save Millions for Schools

October 5, 2011 by Leave a Comment

Ann Johansson for The New York TimesJonathan Yan (left) and Zak Kukoff: improving grades and reducing crime.

Start

The adventure of new ventures.

Founded in January, TruantToday is a messaging service that alerts parents instantly via text and e-mail message when students cut class. The goal? Reducing truancy and restoring state and federal financing to school districts, which can lose as much as $50 each day that a student is missing.

Employees: Three full-time employees and hiring two more: a sales representative and a designer.

Location: Westlake Village, Calif.

Founders: Zak Kukoff, 16, and Jonathan Yan, 18, classmates, started TruantToday after Mr. Kukoff skipped a 7 a.m. honors geometry class at Westlake High School. Administrators took two days to call his parents and notify them of his absence.

“An actual person from the school called and said, ‘Your son was absent two days ago and, you know, get on that,’” said Mr. Kukoff, the company’s chief executive. By then, of course, it was far too late to get him back into class. On top of that, the school was expending limited staff resources to make calls that he felt could easily be automated.

“Being the entrepreneurial sort that I am,” he said, “I immediately thought there was a huge opportunity to make a much more efficient — and much more cost effective — system for the school.”

For the record, Mr. Kukoff adds that he was not actually playing hooky. “I wasn’t skipping to go to the mall,” he said. “I was helping the student government set up for a dance.”

Pitch: “Right now, schools are losing millions of dollars per year because students don’t come to the classroom,” Mr. Kukoff said, adding that public schools in San Diego County alone lost at least $102 million in financing during the 2009-10 term because of absences. “Because we send messages out instantly, and because they go out to parents in a medium they’re already interacting in, parents can then work with the school to bring the student back to the classroom in many cases that same day, which not only saves schools millions of dollars but improves grades, lowers dropout rates and actually lowers crime rates as well.”

Traction: So far, TruantToday has signed up three paying customers in the Conejo Valley region of Southern California: Mr. Kukoff’s own Westlake High School, along with Thousand Oaks High School and Newbury Park High School. The company is running free trials at 10 more schools in Chicago, Los Angeles and New York. It is also in talks with district-level education officials in Sacramento and Seattle, Mr. Kukoff said.

Revenue: None yet. TruantToday charges on a sliding scale — from $10 to $1 per student, annually — with lower rates going to clients with the most students. Mr. Kukoff said the company is on track to start collecting revenue this year but declined to make projections.

Financing: The company is currently nearing completion of a $500,000 round of angel investment, with investors including Dave McClure of 500 Startups.

Marketing: TruantToday has been building buzz with a few early, high-profile coups. Last week, it won $15,000 in funding and took second place in the Innovation Challenge at NBC’s Education Nation Summit meeting. In June, it was voted the most promising of five start-ups selected to participate in CGI America, a Clinton Global Initiative event dedicated to creating jobs and improving economic growth in the United States. In August, the company completed a 13-week program in Boulder, Colo., with TechStars, a start-up accelerator that provides participants with seed financing and mentoring.

Mr. Kukoff said he was pitching TruantToday to media outlets that cater to educators and developing strategies that would give districts incentives to promote the service. He also blogs for The Huffington Post.

Competition: TruantToday’s primary competitor is SchoolMessenger, a service of Reliance Communications, which was founded in 1999 and is based in Santa Cruz, Calif. SchoolMessenger offers a notification system that disseminates information about emergencies, attendance and schoolwide events using voice mail, text messages, e-mail and social media. Earlier this year, New York’s mayor, Michael R. Bloomberg, teamed up with SchoolMessenger as part of WakeUp! NYC, an initiative that sent chronically absent students recorded wake-up calls from Magic Johnson and other celebrities.

Other rivals include Edulink Systems, based in Orange, Calif., and ParentLink, a service of Parlant Technology, which has its headquarters in Provo, Utah.

Mr. Kukoff believes his system is more user-friendly than most other software now available to educators. He also said that TruantToday’s system lets educators address individual absences more rapidly than his competitors’ broad-based messaging services. “We’re pitching a very specific return on investment for schools,” he said. He added that his service was the only one that allows two-way text messaging, which lets parents reply to the schools with their phones rather than connecting to the Internet.

Challenge: Getting the word out and hiring the right team members. “We’re looking for people who are not only going into business just to make profit, but to have a social impact as well,” Mr. Kukoff said.  “It’s important to us to have a company that’s founded on an ethos of helping people.”

Now it’s your turn to weigh in. Can this pair of teenage social entrepreneurs go head-to-head with rivals that have been around for more than a decade?

Correction A previous version of this post reported that Mr. Kukoff had said the company had started collecting revenue. He says he meant to say that the company is on track to start collecting revenue.

Article source: http://feeds.nytimes.com/click.phdo?i=1cdd656f219eaa446c1b0650e339ccfe

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: High School Entrepreneurs Promise to Save Millions for Schools

October 4, 2011 by Leave a Comment

Ann Johansson for The New York TimesJonathan Yan (left) and Zak Kukoff: improving grades and reducing crime.

Start

The adventure of new ventures.

Founded in January, TruantToday is a messaging service that alerts parents instantly via text and e-mail message when students cut class. The goal? Reducing truancy and restoring state and federal financing to school districts, which can lose as much as $50 each day that a student is missing.

Employees: Three full-time employees and hiring two more: a sales representative and a designer.

Location: Westlake Village, Calif.

Founders: Zak Kukoff, 16, and Jonathan Yan, 18, classmates, started TruantToday after Mr. Kukoff skipped a 7 a.m. honors geometry class at Westlake High School. Administrators took two days to call his parents and notify them of his absence.

“An actual person from the school called and said, ‘Your son was absent two days ago and, you know, get on that,’” said Mr. Kukoff, the company’s chief executive. By then, of course, it was far too late to get him back into class. On top of that, the school was expending limited staff resources to make calls that he felt could easily be automated.

“Being the entrepreneurial sort that I am,” he said, “I immediately thought there was a huge opportunity to make a much more efficient — and much more cost effective — system for the school.”

For the record, Mr. Kukoff adds that he was not actually playing hooky. “I wasn’t skipping to go to the mall,” he said. “I was helping the student government set up for a dance.”

Pitch: “Right now, schools are losing millions of dollars per year because students don’t come to the classroom,” Mr. Kukoff said, adding that public schools in San Diego County alone lost at least $102 million in financing during the 2009-10 term because of absences. “Because we send messages out instantly, and because they go out to parents in a medium they’re already interacting in, parents can then work with the school to bring the student back to the classroom in many cases that same day, which not only saves schools millions of dollars but improves grades, lowers dropout rates and actually lowers crime rates as well.”

Traction: So far, TruantToday has signed up three paying customers in the Conejo Valley region of Southern California: Mr. Kukoff’s own Westlake High School, along with Thousand Oaks High School and Newbury Park High School. The company is running free trials at 10 more schools in Chicago, Los Angeles and New York. It is also in talks with district-level education officials in Sacramento and Seattle, Mr. Kukoff said.

Revenue: TruantToday took in revenue for the first time last month (its customers prepay for a year’s worth of service). The company charges on a sliding scale — from $10 to $1 per student, annually — with lower rates going to clients with the most students. Mr. Kukoff declined to disclose current revenue or projections for this year.

Financing: The company is currently nearing completion of a $500,000 round of angel investment, with investors including Dave McClure of 500 Startups.

Marketing: TruantToday has been building buzz with a few early, high-profile coups. Last week, it won $15,000 in funding and took second place in the Innovation Challenge at NBC’s Education Nation Summit meeting. In June, it was voted the most promising of five start-ups selected to participate in CGI America, a Clinton Global Initiative event dedicated to creating jobs and improving economic growth in the United States. In August, the company completed a 13-week program in Boulder, Colo., with TechStars, a start-up accelerator that provides participants with seed financing and mentoring.

Mr. Kukoff said he was pitching TruantToday to media outlets that cater to educators and developing strategies that would give districts incentives to promote the service. He also blogs for The Huffington Post.

Competition: TruantToday’s primary competitor is SchoolMessenger, a service of Reliance Communications, which was founded in 1999 and is based in Santa Cruz, Calif. SchoolMessenger offers a notification system that disseminates information about emergencies, attendance and schoolwide events using voice mail, text messages, e-mail and social media. Earlier this year, New York’s mayor, Michael R. Bloomberg, teamed up with SchoolMessenger as part of WakeUp! NYC, an initiative that sent chronically absent students recorded wake-up calls from Magic Johnson and other celebrities.

Other rivals include Edulink Systems, based in Orange, Calif., and ParentLink, a service of Parlant Technology, which has its headquarters in Provo, Utah.

Mr. Kukoff believes his system is more user-friendly than most other software now available to educators. He also said that TruantToday’s system lets educators address individual absences more rapidly than his competitors’ broad-based messaging services. “We’re pitching a very specific return on investment for schools,” he said. He added that his service was the only one that allows two-way text messaging, which lets parents reply to the schools with their phones rather than connecting to the Internet.

Challenge: Getting the word out and hiring the right team members. “We’re looking for people who are not only going into business just to make profit, but to have a social impact as well,” Mr. Kukoff said.  “It’s important to us to have a company that’s founded on an ethos of helping people.”

Now it’s your turn to weigh in. Can this pair of teenage social entrepreneurs go head-to-head with rivals that have been around for more than a decade?

Article source: http://feeds.nytimes.com/click.phdo?i=1cdd656f219eaa446c1b0650e339ccfe

Filed Under: Small Business Tagged With: , ,

Square Feet | The 30-Minute Interview: John J. Cuticelli Jr.

June 26, 2011 by Leave a Comment

Mr. Cuticelli, 60, is the chief executive of Sheldon Good Company, one of the country’s oldest real estate auction houses. The company was acquired almost two years go by Racebrook Capital, a private equity firm that he controls.

Mr. Cuticelli has moved Sheldon Good’s headquarters to New York, and this year held residential auctions in Washington Heights and in Queens.

Q What changes have been made since the acquisition?

A The primary changes were to take the deep history of the company and figure out what that meant statistically — so that we can try to predict a relative range of value. The founders had cataloged in journals, by hand, every single auction, including how the property performed before it was auctioned, why it was auctioned, what happened, and then a postmortem. How do you take 40 years of data and put it into a formulaic computer program?

Q So how did you?

A We hired grad students, semester after semester for the last five semesters, to go through all the information. It was a very good learning experience for them. There was really no other way for us to do it without sending it to a service, and at that point we couldn’t maintain control.

Q And what have you learned?

A Until we prove true price discovery, things will just languish.

Q What about New York?

A In any down cycle, one of the beautiful things about New York is that it’s the last to leave and the first to come back. I hate to state the obvious, but this is the center for jobs and the financial universe. The closer you are to the center of Manhattan, the less distress and troubles you see.

Q Is that why there aren’t many auctions in Manhattan?

A When you look at the 13 auctions that we’ve conducted in the greater New York market in the last 18 months, you’ll see they’re nearly all in the boroughs and New Jersey. Because the cost of entry and of construction are so high in Manhattan, it’s just not as overbuilt as the boroughs. But there are a few buildings.

Q Can you elaborate?

A Yes, we are working with a number of fiduciaries — lenders or equity holders — in Manhattan. We’re the auction company for the mezzanine debt on the MAve Hotel, at 62 Madison. It’s supposed to be June 29.

Q In February you auctioned condos in Washington Heights and Long Island City. Were you satisfied with the results?

A In Washington Heights, 22 units were sold at auction; 20 closed, and we sold 2 or 3 post-auction. It was a good way to sell the building out with 75 percent of the former asking price.

Long Island City was a very interesting result in that the asking price on a never-before-sold unit was $600 a square foot and we sold it at auction at $474. We sold 18 units at auction. One of the things we’ve proven is that the auction has set a floor, not a ceiling. You’ll see today they’re going for $550 a square foot.

Q On average, how much savings can buying via auction bring?

A Nationwide, we’re seeing people buy things at about 65 percent of the former asking price. In the New York area it’s closer to 75 to 80 percent.

Q How important is the New York market to Sheldon Good?

A The actual sale of Manhattan real estate is not instrumental. But the ability to be near lenders and the financial markets and have easy access to them is important. I spend 10,000 miles a month in an airplane, and 90 percent of what I go and look at is what I’ve been able to mine here.

Q What synergies have been realized by placing Sheldon Good under the Racebrook umbrella?

A Racebrook, the fund, does a lot of debtor-in-possession financing, so when a real estate transaction goes into bankruptcy, Racebrook Capital provides the finances that a real estate entity needs to go into bankruptcy, then the court awards a disposition process, usually an auction. If we provide the financing, then Sheldon Good is the auction company.

Q What’s the breakdown between residential and commercial?

A Typically, 60 percent of what we do is commercial; 40 percent is residential. However, nationwide, in the last 18 months, 60 percent of the 73 auctions we conducted were residential-based and 40 percent were commercial. The statistics are a bit reversed, but that’s just a sign of the times.

Q Have you ever bought something from auction?

A I’ve bought things at auction and sold millions of dollars’ worth of art and real estate at auction that I personally own.

Q You often serve as the auctioneer during these auctions. Do you ever get tongue-tied?

A No. We all go to auction school.

“Tommy Atatamus took two T’s and tied them atop of two tall trees!”

Article source: http://feeds.nytimes.com/click.phdo?i=d02870385d311fa761f745389117f078

Filed Under: Business News Tagged With: , ,
Next Page »