DipJar Raises Funding For A Tip Jar Where You Pay With Plastic, Not Spare Change

The move to a more “cashless” society has not been without its victims – namely, those whose incomes relied on the spare change and small donations that once came from customers emptying their pockets, but are now locked up in digital bits and credit card swipes. The lowly tip jar today often sits empty, as few carry around the quarters and dollars with which to fill it. A company called DipJar wants to change that, and has now raised a $420,000 seed round to scale production of its hardware.

The round was led by Project 11, the new fund from Bob Mason, Brightcove founder, and Katie Rae and Reed Sturtevant, former Techstars Boston directors. Other angels in the round include Will Herman, Warren Katz, Joe Caruso, Mike Dornbrook, Bill Warner, Scott Heller, and others.

The New York-based company, currently incubated by the Bolt accelerator in Boston, was founded by CEO Ryder Kessler, a former director of strategy at New York cab-sharing startup Bandwagon and VP of Sales Jordan Bar Am, previously of McKinsey, and the co-founder of fruit importer Oke USA.

Kessler said the idea occurred to him simply because he began to “feel like a jerk” at one of his favorite coffee shops which only offered tipping via a cash-only tip jar.

Not only was everyone paying with plastic these days, reducing the tips overall, the baristas there also confided in him that they would rather the store stay empty since there was no financial upside to an influx of customers.

The problem with the reduction in cash-based tips means lower-income workers or those who once depended on a tip-based boost to their salaries, would likely turnover faster as they exited to try to find better-paying jobs, Kessler realized. That’s bad for the businesses who would then have to incur more training costs, and, ultimately, the turnover could affect customer service, too.

DipJar_FrescoBaristas, of course, aren’t the only ones affected by customers’ disappearing cash. Deli workers and sandwich makers, ice cream scoopers, coat checks, valets, barbers and hairstylists, hotel housekeepers, and more also once relied on handfuls of dollars customers gave to them, whether by hand, placed in tip jars, or left in envelopes.

Though customers are now paying by credit or debit, they’re not always getting receipts, or getting those that do don’t necessarily have a line to enter a hand-written tip, because business owners don’t want the hassle of accounting for the extra funds and distributing those back to their employees.

This is what the DipJar, as it’s called, aims to solve.

How It Works

The company began building custom prototypes of the DipJar tip jars, and rolled just under two dozen out to New York-area businesses and charity groups starting back in summer 2012. One recent adopter of the technology is the Central Park Conservancy which used the DipJar to raise funds from those attending a film festival, and now plans to roll it out to visitor centers.

DipJar_Dos Toros

 

 

Currently, the DipJar’s hardware involves off-the-shelf parts, but with the funding, the company is working to scale up to mass production.

The unit itself is basic: inside the jar is a standard credit card reader, and not much more. The customer inserts their card and pulls it out to swipe, and the jar will automatically deduct a pre-configured amount (as determined by the business).

Just as important, the act of swiping makes a loud “change clinking” sound so the employee will know you’ve tipped. That will save you from one of those awkward Seinfeld situations (remember George Costanza reaching back into the tip jar because he wanted to make sure he got credit for having done the deed?). Kessler also says version 2 will include a light array as well, along with other refinements, to help encourage and notify other customers and staff of the tips being processing.

The funding will be used to grow the team of two to 4 or 5 over the next few weeks, and further develop the software for businesses that will allow merchants to enter in employee information and track tipping as a metric of customer satisfaction, if they choose. The team is also working to automate the payouts to employees, which are currently distributed by check every two weeks. And, of course, the hardware is being improved to make it a scalable solution.

The team is also gearing up to be ready when the shift to EMV takes place, or if Apple Pay helps push NFC adoption into the mainstream, says Kessler. “We already own the trademark for ‘TapJar,’” he notes regarding the latter.

Dipjar_Central Park

 

Kessler won’t detail the cost to produce the jar today, or how much it will sell for, explaining that the company has been exploring several business models, including monthly pricing, upfront pricing, and pricing by volume. Similarly, it’s too early to disclose metrics of the DipJar’s impact on increasing tips, he says, since those can vary wildly by business and the DipJar only has a handful of customers today.

However, he would tell us that the DipJar hasn’t cannibalized cash tips, from what they’ve seen. “The DipJar brings in new money for the recipients,” he says.

Plus, he adds, though the team was planning to run short 3 to 6 month tests, “no one wanted to give it back…that speaks to the success of the product.”

 

-Courtesy: Techcrunch

Bigbasket gets $32 million funding ahead of India’s online grocery shopping boom

Bigbasket-gets-32-million-funding-ahead-of-Indias-online-grocery-shopping-boom

India’s ecommerce boom is at high velocity, but the nation’s online groceries sector has been a lot slower to take off. But today’s US$32 million funding round for Bigbasket seems to indicate that this niche area is now gaining traction.

Bigbasket’s series B round comes from Helion Ventures and Zodius Capital, reports NextBigWhat. It comes a surprising two-and-a-half years after the startup’s US$10 million round.

Bigbasket currently operates in three Indian cities – Bangalore, Hyderabad, and Mumbai. The new VC money will be used to expand its reach to 10 cities by the end of next year, says CEO VS Sudhakar. The online grocer is handling 5,000 orders per day at present.

The startup is up against local rivals such as Zopnow and Ekstop. However, Zopnow only covers Bangalore, while Ekstop is restricted to Mumbai.

All these startups will get a shock soon when local retail giant Reliance starts its long-anticipated ecommerce business.

-Courtesy: Techinasia

Why Startups Sell For Millions With No Business Model

For the last three years I have been immersed in the startup world. Many of my friends work for startup companies, I’ve written a book that covered many startups that trend towards the social good spectrum, and I have been recruiting and working for many of the companies myself, here in New York.

During this time, I felt like I was missing something–some major point that everyone else understood but me. I wondered what purpose all of these startup served, and wrestled with understanding how so many of these businesses could be sold for millions, or even billions of dollars, when most made little to no profit and lacked concrete business models.

I kept quiet about my questions, afraid to admit that I just didn’t get. When I shared my feeling with close friends I boiled it down to an impression that it must simply be all pretend. It must be one of those ideas that will eventually self correct and everyone will then realize they have been believing in a fake shared reality. It was a philosophical response that I obviously didn’t share with many.

Then, I had the chance to work with a 50+ billion dollar company on a short term consultancy and I heard the board members and C-suite employees talk about acquiring and investing extensively in these small, profitless startups, as well as the venture capital funds that fund them. I finally got it: It’s all about research and development.

It isn’t pretend at all. It is a simple value proposition that doesn’t rely on the companies having a business model but rather relies on the knowledge they learned. It is outsourced research and development. All these calls to “disrupt” industries at the end of the day is different language for what used to be called R+D.

Lets look at it more closely. It would cost a large car company, for example, $100 million dollars to research and develop the best new LED light bulb themselves. For the record, this isn’t an obscene amount of money within the scope of a multi-billion dollar company.

Then you have a VC firm that has a look at the industry and notices that it costs this manufacturing company $100 million to do this R+D work, and they figure out how they can do it cheaper. How? They put $25 million into a whole portfolio of LED light companies. Let’s say one of those companies develop the best new LED bulb, in which case the business can be sold to the car company for $75 million, and the car company still saved $25 million they would have spent if they did the R+D in house. Of course the numbers are made up but you get the idea.

Large companies buy VC-backed start ups without real ways to make money for three reasons:

  1. To Learn Something
    The cheapest and only way for big corporations to learn everything they can about their industry and to inform their future investments is to invest in startups that are at the forefront of research and innovation in their field. The same way we as individuals would go to University to gain access to and absorb information, big companies gain an immense amount of knowledge from groundbreaking startups. Often they will buy companies only for the learning in order to inform future investments. It can also be as a way of laying the groundwork so they can investigate if they want to start building a product pipeline in this new area.
  2. To Fill Their Product Pipeline.
    Companies need a steady steam of new potential products to sell or integrate into their core products. Although most of these acquisitions won’t end up being used, a few will make it through the funnel and become real, sellable products. For internet companies this product pipeline looks like new ways to acquire users, and new ways to monetize markets. For car companies it would look like LED light bulbs.
  3. To Acquire the Team
    This is a form of corporate headhunting and simple way for big companies to “recruit” new talent and get them working in house.

Of course every start up hopes to be that magical unicorn that becomes big enough themselves to start buying other companies or investing in research and development but for most… its definitely not pretend. It is just outsourced R+D.

If you want to build a company and sell it maybe it is time to do what the VC’s do and analyze where you can provide value as an outsourced R+D department and get hustling.

-Courtesy: Inc.com 

A Framework for Taking Your Startup Global

When a startup is successful at home, the logical next step is to look beyond its borders for its next big growth opportunity. Getting set up in a new country, however, requires an understanding of the potential pitfalls and a clear evaluation of where to set up and what is most important to your startup.

DoubleDutch was looking to expand mainly due to the need to support our growing client base in the U.K., Europe and further east. We were still a 35-person company, so with limited resources it was critical that we had a simple and concise approach. We needed to ensure that we maintained focus on the core of the business, and that moving overseas did not become a distraction from immediate business growth.

We set out to understand those elements that we saw as being critical to our success. For other companies exploring international expansion as a key opportunity for growth, the framework we created may help set the foundation for going global.

Finding your city. The first step is figuring out where you want to plant your international roots. Different companies have different priorities and objectives when it comes to international expansion, but ultimately basic logistics and government policies will broadly dictate how suited a country or city is for your company.

When vetting potential international locations, the key criteria that we used were:

  • Access to talent (adding the right people to your business is critical for success)
  • Access to markets (being able to access the target market is key)
  • Ease of set-up and the local government’s approach to business
  • Language barriers

Most countries have a foreign investment body whose purpose is to help companies expand and set up commercial activities within their borders. In our case, having a good relationship with the Netherlands Foreign Investment Agency (NFIA) was instrumental in allowing us to have a soft landing in Amsterdam.

NFIA helped coordinate a reconnaissance trip to Amsterdam to scout for office space, talent, recruitment agencies and legal and accounting firms, as well as meet other companies that had gone through the same process so that we could learn from their experience.

Prepare for landing. Once you’ve found a city that’s a fit, the real fun begins. It’s important to have a pretty extensive game plan prepared in advance — one that is tailored to your business and your destination. With that in mind, stay aware that plans will change. Allow room to maneuver, and be flexible when making tough choices down the line.

Being pragmatic about the cost of investment for us to grow and expand into foreign markets was important from day one. Investors are rightly wary of global expansion and its risks, so we needed to make sure we were realistic with our projected costs and provided ourselves with some runway to operate around unexpected challenges.

Coming in under budget sends a far better message to investors than spending too much. Be realistic, but understand that something always comes up.

Setting up shop. Once you’ve landed and got the basics up and running, your next steps will depend heavily on your company’s unique priorities and objectives. No matter what, your ultimate goal is to get your international office operational and acting as an extension of your organization by expanding upon its culture and values, and continuing to build on the world-class team that got your company this far.

For DoubleDutch, building a team that added to our existing company culture as much as possible and encouraging “hustle” and “creativity” were key goals in the international hiring process. We instituted an interview process that included Skype calls with the U.S. team and hired a full-time recruiter to provide support on the ground and ensure a steady candidate flow.

In interview debriefs we’d measure each candidate according to our core values in addition to their role-specific aptitude. This rigorous approach to hiring may have slowed our initial team growth, but the result was that all of our employees are on the same page whether they’re based in Amsterdam, San Francisco or Hong Kong.

Hiring a great team and establishing culture are significant accomplishments when setting up abroad. Keeping these victories in mind is important while plugging away on the business end, because reaching the same level of hyper growth will not happen immediately.

A global team. In the world of a startup, employees don’t work the standard 9 to 5 — this is even more relevant for teams that work in a totally different time zone. Ensure that your international teams are recognized for what they’re building and their contribution to your business’s growth.

Establishing clear channels of communication and setting up regularly scheduled check-ins can help make sure that teams based abroad don’t feel as though they’re on an island fighting a lonely battle. This is especially relevant when working in a fast-moving technology company where product and processes go through continuous enhancements.

We set up weekly office hours across regions within teams as well as across functions, and shifted the times of company meetings to accommodate the time zones. It’s important that everybody recognizes the time-zone difference — something as simple as having clocks with international times visible in the office can help.

A slow process. In Amsterdam, we had a slow first quarter and felt like we were spinning our wheels for a while. But with continued investment and persistence we began to gain traction and witnessed dramatic increases in revenue the following quarters. After all of the planning and preparation, patience was perhaps the most important skill during those first pivotal months.

As long as your startup is aware of the labor-intensive process of moving overseas, is able to expand without too much distraction from core markets, and able to invest time, energy, and patience into the expansion, the benefits are invaluable.

-Courtesy: Entrepreneur.com

Looop, An Online Learning Platform For Employees, Raises $2M To Enter The UK

Online learning startups are aplenty right now — from heavily-funded U.S-based MOOCS, such as Coursera and Udacity, to more thrifty European players like Iversity and Eliademy— there’s no doubt the edtech space is heating up. Now another startup is throwing its learning wares into the virtual classroom.

Australia’s Loooptopic-editor provides a mobile-friendly platform to enable small-to-medium sized business to deliver training online. Today, the company is disclosing a $2 million seed round from an undisclosed education investor, specifically raised to fuel expansion into the UK, as well as add a native iOS app to its newly-launched app for devices running Android. Looop also plans to make its first forage into the U.S. market, perhaps as soon as next month.

Pitching itself as an easy way to get new or existing company training/learning materials online, in addition to offering tools for tracking and assessment, all in a mobile-friendly format, Looop’s ultimate aim is to disrupt a stale corporate online learning market that relies on outdated desktop software that doesn’t always play well with mobile devices and/or the cloud.

In addition, similar to consumer-focused Coursmos, the company is tapping into the notion of ‘lean’ or ‘micro-learning'; the idea being to offer learning in bite-sized chunks, with easily tested learning outcomes. The kind of learning content that is perfectly suited to on-the-go consumption.

On that note, when asked about existing competitors, Looop co-founder, Ben Muzzell, says: “I genuinely don’t feel there are any other businesses directly competing with us in the same respect and this is because they haven’t been able to convert their training programs to mobile devices effectively, as of yet.”

He lists two mains reasons why that hasn’t tended to have happened as the need to wait for technology to catch up and a reluctance by the online learning industry to adopt “cloud technology, thereby slowing down progression in this space.”

In contrast, Muzzell doesn’t see MOOCs as a direct competitor (though I’d point to enterprise MOOCs being a next logical step, such as the white-labeling work being done by Eliademy). “MOOCs don’t fit into specific business objectives. They are also often directed towards students’ learning requirements rather than business learning needs, so we don’t view them as a direct competitor in that sense,” he says.

-Courtesy: Techcrunch

Building a Business Plan: 5 Things Every Startup Needs to Succeed

Your business plan is going to be the first thing that potential investors look at when you solicit them for money or if they are looking for another business to add to their portfolio. Therefore, your business plan is going to be one of your biggest keys to success as a startup. There are going to be a few key things that investors look for in a business plan and you must address them in order to have a winning plan; the following are five things that you definitely need to include on your business plan in order to make it a winning one.

Market Opportunity

How large is your market? Is it growing? Is your market filled with repeat customers? Are there emerging opportunities within that market? Is that market under threat from anything? By addressing these questions in your business plan, you will not only give yourself and investors an idea of what you are looking at for future sustainability and growth, things that will be key in your business’s success.

Size Up Your Competition

Instead of ignoring your competition in your business plan, address them. Include the things that your competitors have to their advantage in your business plan, and state how you are different or how you have an edge over these already-established businesses. This will show your investors that you have a realistic head on your shoulders and are able to look at the big picture; both good signs of success for a business.

Include Projections

At the end of the day, people are investing in your business in order to make money. Having three year minimum projections will show your investors how much your business stands to make versus how much it stands to lose, and will put your investors’ minds at ease about the risk that they are taking in investing in you. These projections will look especially tantalizing if you include market analytics that are well founded and come from good sources.

Cash Flow Statements

Even if you are just starting your business, if you are already gaining cash flow, you should state it on the business plan that you are offering to investors, and tie them into your projections of cash flow. Any sort of positive cash flow is going to be attractive to your investors and will draw them in more than almost anything else on your business plan since these statements have already happened and are not based on abstract statistics of years past or years to come.

Give An Executive Summary Of Your Business

Even though this should go at the forefront of your business plan, it was left for last on this list to make sure that all of the other elements of a good business plan went into your executive summary. These are synonymous with abstracts in a scientific study; they are to give your investors an idea of who you are and what you aim to do, with results included. This should be short, sweet, and to the point, but should be polished and include enough detail to tantalize them enough to read further.

-Courtesy: Inc.com

Flywheel Raises $1.2M For Its Designer-Centric WordPress Hosting Platform

The open-source WordPress software runs a huge chunk of all of the sites on the Internet, so it’s no surprise that there’s also a massive ecosystem that has sprung up around the platform. These days, there’s a specialized WordPress service for virtually any niche you can think of.

Omaha-based Flywheel is one of those services. It focuses on designers, freelancers and creative agencies that need a managed WordPress platform to build and manage their clients’ sites. Today, the company announced that it has raised a $1.2 million funding round.

The round was led by Omaha-based Linseed Capital, with participation from Chicago’s Lightbank and Hyde Park Venture Partners, as well as Detroit-based Ludlow Ventures.

Flywheel tells me it plans to use this new funding to focus on product development. “In the immediate future we have staging sites and an affiliate/referral program launching,” Flywheel CEO and co-founder Dusty Davidson told me earlier this week. “Beyond that it’s things like an API and 3rd party integrations, and other features to improve the workflow of designers and agencies building sites on WordPress.”

The service already focuses on ensuring that its workflow is as straightforward as possible for its users. Creating a new site already just takes a few seconds and once it’s up and running, the service makes it easy to add collaborators, bill clients and do most of the other things that designers and freelancers need to handle when they work on a WordPress project. One nice feature of Flywheel is that users only pay for a site once it goes live — and at that point, it’s likely the client who will pay the hosting bill anyway.

Flywheel’s pricing is mostly based on how many visits a site gets per month and starts at $15/month for up to 5,000 visits. Starting today, the service also offers its users bulk pricing. For $100 a month, they can run up to 10 sites with an aggregate total of 150,000 visits on the service or 25 sites with 500,000 visits for $250 a month.

-Courtesy: Techcrunch

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