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Archive for December 2011

Series A Crunch And The Lean Funding Model

Duncan Davidson of Bullpen Capital recently presented a very interesting concept at the December 2011 TechCrunch conference in Tokyo. At the conference he discussed how the lean startup model had given rise to a lean finance model for venture capital.

The concept: keep funding lean for as long as possible, until the startup has validated its model and is beginning to scale. Usually it takes around six months of metrics to be in position to raise a big round. That “shovel-in” round is where the lean model catches up to the traditional venture model, as shown in the chart.

 

 

 

 

 

 

Image: BullPen capital

By using this process, the founders have preserved more ownership as well as their options. Most startups are not suited to become billion-dollar babies, and exit via M&A, often quickly (a “quick flip”). Lean funding makes the quick flip attractive both to the founders, who often each pocket at least $10M, and the funders, who make larger multiples on their invested capital by putting less in. If this happens quickly, the IRR can be quite attractive to the LPs who invest into the lean venture funds.  They have learned to be wary of big venture, where their capital is tied up for ten or more years.

To learn more, read the TechCrunch article and view the interview with Duncan, click here!

-DF

Written by David Frederick

December 6, 2011 at 5:57 PM

SoLoMo And What It Means For You And Your Business

Oh SoLoMo…..

What’s SoLoMo you say? SoLoMo (social, location, and mobile) is a trend larger than any single app or company, and it will encompass every industry on the planet. The future of mobile location will see the integration of location-enabled features and insights into every product you touch and every process you engage in during the course of your life, providing great efficiencies and incredibly valuable insights.

Every industry is, and will increasingly be affected by mobile devices and location-sensing technology. What we’re seeing today in the arenas of local commerce, deals, and productivity is only the beginning. With Internet and location-enabled phones in the hands of billions all around the world, the future of mobile location is rapidly becoming our future as an advanced civilization. As many of you know however, I am very concerned about the security responsibility and privacy issues around SoLoMo. Like all technology, there are always ethics issues involved in its development, deployment, and  utilization. But that’s a future blog posting!

Regardless, Fast Company has a really interesting article on SoLoMo and Mobile. You can check it out!

-DF

Written by David Frederick

December 6, 2011 at 5:26 PM

UPDATE – Carrier IQ

Here is a brief update on the Carrier IQ debacle. Check it out!

-DF

A group of three law firms late last week announced (via BGR) the filing of a class action lawsuit against Apple, Carrier IQ, and five other companies over privacy issues related to Carrier IQ’s logging software. The list of defendants also includes hardware manufacturers HTC, Samsung, and Motorola, and carriers AT&T, Sprint, and T-Mobile.

The carriers and manufacturers last month were caught willfully violating customers’ privacy rights in direct violation of federal law. A technology blogger in Connecticut discovered last month that software designed and sold by California-based Carrier IQ, Inc. was secretly tracking personal and sensitive information of the cell phone users without the consent or knowledge of the users. On Nov. 30, 2011, the United States Senate Committee on the Judiciary said in a letter to Carrier IQ that “these actions may violate federal privacy laws.” It added, “this is potentially a very serious matter.”

While it appears that the version of Carrier IQ’s software installed on iOS devices is much less capable than that found on Android devices, concerns have still arisen over just what information is being logged and transmitted back to Carrier IQ to be passed on to carriers. For its part, Apple has claimed that it has stopped supporting Carrier IQ in iOS 5 and that it will remove all remaining traces of the service in a future iOS update.

Much of the focus has been on Carrier IQ itself and the carriers that have partnered with the company, but hardware companies have also become involved in the controversy. German regulators have already begun pressing Apple for details on its usage of Carrier IQ data, and other authorities will likely also turn to Apple and other hardware companies as the story continues to develop.

Written by David Frederick

December 6, 2011 at 1:59 PM

Posted in Business, Security

Mobile Spyware And Why You Should Be Concerned

Technology is truly a marvel, and like many “marvels” it can be used for good and evil. Apparently, the good folks at our mobile carriers are very interested in what you do with your mobile/smart phone. Consensual Data Capture is one thing, spying…. yes spying is another. No this isn’t a three-letter government agency doing this, but our mobile carriers or literally anyone else who happens to buy the right software to access the embedded spyware.

It was bad enough that “certain” organizations were tracking Black Friday shoppers without their knowledge in malls via their mobile/smart phones, but now we are learning about a new and very disturbing revelation around the amount of data, communication, and PII (Personally Identifiable Information) mobile carriers are collecting, whose using it, and how they are collecting it.

Don’t get me wrong, I am all for ways in which to drive and capture consensual consumer behavior, KPI’s, market metrics, and behavior to help drive more effective solutions, services, usage, and strategies, but the consumer should be informed AND give their consent to allow the capture and usage of this information. Apparently, this is not the case here.

Remember when Apple was tracking people’s location movements via their iPhone’s and cataloging the data? This is way worse. Of course, Apple was forced to stop that practice. But this new embedded spyware? If you own a non-Apple smart phone you should check out this disturbing article. So far, it effects 100 million of you. Even you do own an Apple iPhone, you should still check it out. This could still be happening with your iPhone.We just don’t know yet.

-DF

Tens of Millions of Smartphones Come With Spyware pre-installed, Security Analyst Says

Over 100 million smartphones are tracking their owners’ every step, Android developer Trevor Eckhart claimed, thanks to software that comes pre-installed on phones from most major carriers.

During a security demonstration revealed on Monday, Eckhart showed how software developed by Carrier IQ tracks virtually everything a user does — going as far as logging individual keystrokes and button presses. The company claims it helps its customers improve quality and performance “by counting and measuring operational information in mobile devices.” Security experts call it spyware.

“I assume that when I SMS my wife on the phone, no one is intercepting that message,” Chet Wisniewski of security firm Sophos told FoxNews.com. He called the whole ordeal is a “serious invasion of privacy.”

“Why do they need to know when I’m logging into Bank of America, when I’m accessing my password? It’s a different level of snooping,” he said.

Developed as a mobile analytics platform, Carrier IQ’s software can be found on most Android, BlackBerry and Nokia phones — over 140 million phones in total, the company’s website boasts. Some reports suggest Apple iPhones may carry the software as well.

The company has flat out denied that its software records keystrokes, a claim Eckhart’s latest video seems to refute.

“Every button you press in the dialer before you call,” Eckhart says in his latest video, “it already gets sent off to the IQ application.”

Eckhart did not return FoxNews.com phone calls, and Carrier IQ declined to comment on his claims. A statement on the company’s website reiterates the company’s claims that its software does not track customers or record keystrokes.

“This information is used by our customers as a mission critical tool to improve the quality of the network, understand device uses and ultimately improve the user experience,” the company said. By evaluating these metrics, Carrier IQ aims to help with issues such as “dropped calls and battery drain.”

In videos showing Carrier IQ at work, Eckhart showed it going beyond such utilitarian monitoring. He showed Carrier IQ’s software monitoring entire text messages, a Google search, and his location, even during sessions protected by HTTPS, a security protocol that encrypts communications for sensitive transactions like online banking.

Sprint has acknowledged using Carrier IQ’s software, but denies having access to personal data.

“Carrier IQ provides information that allows Sprint, and other carriers that use it, to analyze our network performance and identify where we should be improving service,” Sprint told CNET earlier this month. “We collect enough information to understand the customer experience with devices on our network and how to address any connection problems, but we do not and cannot look at the contents of messages, photos, videos, etc., using this tool,” Sprint continued.

While Wisniewski understands the needs for data and metrics, he believes carriers must be more forthcoming about how they are monitoring their users, what data they are collecting, and how they are protecting that data.

“If you’re going to collect that kind of information from people, you have to meet a different standard,” Wisniewski told FoxNews.com.

But for now, most users are stuck, unable to even turn off or uninstall the program.

“The Carrier IQ application is embedded so deeply in the device that it can’t be fully removed without rebuilding the phone from source code,” Eckhart wrote on his website.

“Even where a device is out of contract, there is no off switch to stop the application from gathering data.”

Read more: http://www.foxnews.com/scitech/2011/12/01/is-your-smartphone-secretly-spying-on/#ixzz1fJJ3Zfhk

Written by David Frederick

December 1, 2011 at 2:58 PM