This was probably inevitable: the minute that Dodd-Frank cracked down on the fees charged by credit cards aimed at students, some other bright financial innovation would crop up. This time, a debit card aimed at students. Which carries lots of fees. Ylan Mui reports that a company called Higher One has started signing up colleges around the country, taking on the burden of providing cash to students. In return, it gets lots of fees:
Students say several of the fees associated with Higher One’s card are particularly irksome, including the $19 inactivity fee, a 50-cent charge for using a PIN to make a purchase rather than a signature, and a $2.50 fee for using other banks’ ATMs…
Higher One said that only 1 percent of customers have been charged an inactivity fee and that more than half are charged the 50-cent fee only once. All fees are listed on Higher One’s Web site, along with tips on avoiding them.
“We have a big effort with educating students on how to use the account,” Smith said. “We’re very passionate about financial literacy.”
If the fees are listed on Higher One’s website, they’re not exactly prominent. I did find this page, eventually, via this blog entry, but it just says that “when you swipe & sign, you won’t be charged the PIN-based transaction fee”. I haven’t been able to find a page showing a 50-cent transaction fee anywhere*, although I did manage to find this page, showing a $25 fee for domestic wire transfers and a $50 fee for international wire transfers. “Higher One offers less costly alternatives for transferring funds”, it says, without giving any indication what they might be; I suspect that what they’re talking about is transfers to or from people who have already registered somehow with Higher One.
It should go without saying that any firm which is “very passionate about financial literacy” would encourage, rather than penalize, simple, cheap and safe PIN-debit transactions. It would not give students a debit card and then tell them that if they want to avoid fees they should select the “credit” option rather than the “debit” option when they come to pay.
And I can’t think of any good reason to charge a $19 inactivity fee to people who haven’t used their cards in 9 months.
The fact is that students are often very naive when it comes to money, and it’s easy to gouge them once or twice before they learn that banks are not necessarily on their side. If you can get your card accepted by a majority of freshmen every year, and then come up with all manner of weird fees to hit them with, that’s a great way of making money out of ignorance.
Meanwhile, all students should have a bank account: giving them a debit card instead only serves to maximize the number of unbanked students. So while I’m sure cards like this are attractive to colleges, it would be great if either the colleges or else the Consumer Financial Protection Bureau started being a lot more critical of them. Prepaid cards only ever make sense if the alternative is being completely unbanked; that should not ever be the case for students.
*At Southern Oregon University, Higher One agreed to waive the 50-cent PIN-debit charge, but only if there was a simultaneous “swipe-and-sign” campaign. If the campaign is unsuccessful and students do the sensible thing by using PIN debit, then the university can be charged $2 per student for “PIN fee elimination”.
Update: Higher One’s Donald Smith responds:
Higher One was founded 10 years ago by three college students (undergraduates at the time) who were looking for streamlining the way financial aid refunds were distributed to students. Today we work with more than 675 campuses across the country, have a 97% client retention rating, and an A+ rating with the BBB.
The OneAccount is Higher One’s optional, no minimum balance, no monthly fee, FDIC-Insured checking account created by students for students. We do not offer a stored value card. We are very open with our fee schedule. We post it on every program website for all to access, explain each fee, discuss how to avoid each fee, and provide students with a web page that tells them how to use the account for free (which you’ve already found). Because of this, we believe that our customers pay less than half the amount in fees that the average bank checking account customer pays per year.
Two of the fees you referenced in your blog are the PIN fee and the Abandoned Account Fee. The PIN fee is easily avoided by choosing a signature based transaction at the checkout. The majority of students uses it in this manner and is in turn protected by MasterCard’s Zero Liability Policy against fraudulent charges (a safer way of purchasing than a PIN based transaction). We do not have an inactivity fee on our fee schedule – we don’t penalize students who do not use their accounts. We do have an Abandoned Account Fee of up to $19, for those who have abandoned their accounts, but this has been charged to less than 1% of all OneAccount holders in our company’s history because of our proactive outreach plan.
Higher One offers no instruments of credit. As a matter of fact, we’re generally in favor of initiatives restricting students’ access to credit cards and promoting financial literacy. This is why we offer a full range of financial literacy resources along with the services we provide.
I particularly dislike the implication, here, that PIN-based transactions are unsafe. They’re not; they’re just less lucrative, in terms of interchange fees, than signature-based transactions.
Today Y Combinator is holding its sixth Startup School, where a roster of Silicon Valley’s most experienced and successful founders and investors come together to lecture hundreds of eager entrepreneurs. The event is always extremely popular, and today is no exception — the lecture hall on Stanford’s campus is packed to the brim.
Today’s event will feature eleven talks, including lectures from the likes of Paul Graham, Mark Zuckerberg, and Ron Conway. The first session — which featured Andy Bechtolsheim, Paul Graham, and Andrew Mason — just ended. You can find my notes from each talk below, and we’ll be posting more later today on each cluster of speakers. You can also watch a live stream of the event right here.
Andy Bechtolsheim
Sun founder Andy Bechtolsheim’s talk revolved around innovation. He kicked off with a brief history of the incredible changes we’ve seen in the computer industry in a brief period of time, with the number of transistors on a chip increasing a million fold since 1970 and networking technology seeing similarly impressive gains.
Bechtolsheim says that there are a few key lessons from what’s gone on in terms of web innovation: first, the time from innovation to adoption can be remarkably short (see Google’s rapid adoption, for example). And the key to success isn’t to be first (after all, there were many search engines available before Google came out). Instead, it’s important to be the first to solve the right problem.
So why is there so much focus on web companies? Bechtolsheim says that it’s primarily because starting one is so cheap, relatively speaking. You no longer need to have your own infrastructure — with AWS, you can get up and running for cheap. It’s also cheaper than ever to raise awareness due to the proliferation of blogs, Twitter, etc.
Paul Graham
YC founder Paul Graham’s talk focused on one of the all-important problems facing budding startups: raising money. And he had good news, at least as far as entrepreneurs are concerned.
There’s an increasing tension between so-called Super Angels and Venture Capitalists (which manifested itself in AngelGate). Unlike traditional angel investors, Super Angels are investing other people’s money, which makes them similar to the VC camp. But, unlike VCs which have historically invested large sums of money (usually $1M+), Super Angels are happy to make many, much smaller investments.
This gives entrepreneurs more control — they can raise exactly how much they want instead of having to take a giant Series A round. It’s also led to larger VCs making small (~$100K) investments to compete more directly with the Super Angels.
This has another consequence: because VCs are mostly price-insensitive at this point (they view these seed investments as options to invest larger sums down the road), they don’t mind if the startup valuation grows higher than it would have. Which is great for the entrepreneur, but is bad for Super Angels who do care about the startup’s valuation. This, Graham says, could lead to what looks like another bubble with skyrocketing valuations, but hopefully without the pop at the end.
In the long term, this probably isn’t sustainable — Graham says that VCs and Super Angels will increasingly become one and the same, as the top VCs who add value are weeded out from the rest. But he thinks that process will take time, since the VC industry moves at a “glacially slow” pace. Until then, we’ll keep seeing those sky-high valuations for companies that appeal to both VCs (who think the company has a chance to IPO) and Super Angels (who think the company has a chance at an early, lucrative exit).
For more on this topic, see our post on The $4 Million Line. Graham will also be publishing an essay covering his talk, which we’ll post a link to as soon as it goes live.
Andrew Mason
Groupon founder Andrew Mason decided to take a different approach with his talk: he gave an old pitch for his original startup The Point, which eventually evolved into the wildly successful Groupon. The Point was a collective action platform that would let users take action together — for example, to raise money to build a dome around Chicago to block out the city’s frigid winter weather (yes, this was an actual initiative on the site).
But Mason’s (old) pitch wasn’t a good one, and The Point never really gained traction. So what went wrong? Mason pointed out some of the original company’s main flaws: it was about a vision more than making a tool that was actually useful. Mason was thinking of what the Point could become five, ten years down the road, without figuring out how to get people to actually use it.
Another problem: you need to recognize and embrace your constraints, and figure out what’s practical. You also need to realize that you’ll probably fail. Many people who are thinking of launching startups are very smart — they’ve succeeded in the past and the notion of failure isn’t really conceivable to them (Mason fell into this camp when he was working on The Point). Now, at Groupon, he constantly reminds himself of ways he could fail — the company has a bunch of magazine covers hanging on the wall near the entrance featuring companies that have gone downhill after massive success, like MySpace and AOL.
Image by Robert Scoble/Scobleizer on Flickr
robert shumake hall of shame
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
robert shumake detroit
This was probably inevitable: the minute that Dodd-Frank cracked down on the fees charged by credit cards aimed at students, some other bright financial innovation would crop up. This time, a debit card aimed at students. Which carries lots of fees. Ylan Mui reports that a company called Higher One has started signing up colleges around the country, taking on the burden of providing cash to students. In return, it gets lots of fees:
Students say several of the fees associated with Higher One’s card are particularly irksome, including the $19 inactivity fee, a 50-cent charge for using a PIN to make a purchase rather than a signature, and a $2.50 fee for using other banks’ ATMs…
Higher One said that only 1 percent of customers have been charged an inactivity fee and that more than half are charged the 50-cent fee only once. All fees are listed on Higher One’s Web site, along with tips on avoiding them.
“We have a big effort with educating students on how to use the account,” Smith said. “We’re very passionate about financial literacy.”
If the fees are listed on Higher One’s website, they’re not exactly prominent. I did find this page, eventually, via this blog entry, but it just says that “when you swipe & sign, you won’t be charged the PIN-based transaction fee”. I haven’t been able to find a page showing a 50-cent transaction fee anywhere*, although I did manage to find this page, showing a $25 fee for domestic wire transfers and a $50 fee for international wire transfers. “Higher One offers less costly alternatives for transferring funds”, it says, without giving any indication what they might be; I suspect that what they’re talking about is transfers to or from people who have already registered somehow with Higher One.
It should go without saying that any firm which is “very passionate about financial literacy” would encourage, rather than penalize, simple, cheap and safe PIN-debit transactions. It would not give students a debit card and then tell them that if they want to avoid fees they should select the “credit” option rather than the “debit” option when they come to pay.
And I can’t think of any good reason to charge a $19 inactivity fee to people who haven’t used their cards in 9 months.
The fact is that students are often very naive when it comes to money, and it’s easy to gouge them once or twice before they learn that banks are not necessarily on their side. If you can get your card accepted by a majority of freshmen every year, and then come up with all manner of weird fees to hit them with, that’s a great way of making money out of ignorance.
Meanwhile, all students should have a bank account: giving them a debit card instead only serves to maximize the number of unbanked students. So while I’m sure cards like this are attractive to colleges, it would be great if either the colleges or else the Consumer Financial Protection Bureau started being a lot more critical of them. Prepaid cards only ever make sense if the alternative is being completely unbanked; that should not ever be the case for students.
*At Southern Oregon University, Higher One agreed to waive the 50-cent PIN-debit charge, but only if there was a simultaneous “swipe-and-sign” campaign. If the campaign is unsuccessful and students do the sensible thing by using PIN debit, then the university can be charged $2 per student for “PIN fee elimination”.
Update: Higher One’s Donald Smith responds:
Higher One was founded 10 years ago by three college students (undergraduates at the time) who were looking for streamlining the way financial aid refunds were distributed to students. Today we work with more than 675 campuses across the country, have a 97% client retention rating, and an A+ rating with the BBB.
The OneAccount is Higher One’s optional, no minimum balance, no monthly fee, FDIC-Insured checking account created by students for students. We do not offer a stored value card. We are very open with our fee schedule. We post it on every program website for all to access, explain each fee, discuss how to avoid each fee, and provide students with a web page that tells them how to use the account for free (which you’ve already found). Because of this, we believe that our customers pay less than half the amount in fees that the average bank checking account customer pays per year.
Two of the fees you referenced in your blog are the PIN fee and the Abandoned Account Fee. The PIN fee is easily avoided by choosing a signature based transaction at the checkout. The majority of students uses it in this manner and is in turn protected by MasterCard’s Zero Liability Policy against fraudulent charges (a safer way of purchasing than a PIN based transaction). We do not have an inactivity fee on our fee schedule – we don’t penalize students who do not use their accounts. We do have an Abandoned Account Fee of up to $19, for those who have abandoned their accounts, but this has been charged to less than 1% of all OneAccount holders in our company’s history because of our proactive outreach plan.
Higher One offers no instruments of credit. As a matter of fact, we’re generally in favor of initiatives restricting students’ access to credit cards and promoting financial literacy. This is why we offer a full range of financial literacy resources along with the services we provide.
I particularly dislike the implication, here, that PIN-based transactions are unsafe. They’re not; they’re just less lucrative, in terms of interchange fees, than signature-based transactions.
Today Y Combinator is holding its sixth Startup School, where a roster of Silicon Valley’s most experienced and successful founders and investors come together to lecture hundreds of eager entrepreneurs. The event is always extremely popular, and today is no exception — the lecture hall on Stanford’s campus is packed to the brim.
Today’s event will feature eleven talks, including lectures from the likes of Paul Graham, Mark Zuckerberg, and Ron Conway. The first session — which featured Andy Bechtolsheim, Paul Graham, and Andrew Mason — just ended. You can find my notes from each talk below, and we’ll be posting more later today on each cluster of speakers. You can also watch a live stream of the event right here.
Andy Bechtolsheim
Sun founder Andy Bechtolsheim’s talk revolved around innovation. He kicked off with a brief history of the incredible changes we’ve seen in the computer industry in a brief period of time, with the number of transistors on a chip increasing a million fold since 1970 and networking technology seeing similarly impressive gains.
Bechtolsheim says that there are a few key lessons from what’s gone on in terms of web innovation: first, the time from innovation to adoption can be remarkably short (see Google’s rapid adoption, for example). And the key to success isn’t to be first (after all, there were many search engines available before Google came out). Instead, it’s important to be the first to solve the right problem.
So why is there so much focus on web companies? Bechtolsheim says that it’s primarily because starting one is so cheap, relatively speaking. You no longer need to have your own infrastructure — with AWS, you can get up and running for cheap. It’s also cheaper than ever to raise awareness due to the proliferation of blogs, Twitter, etc.
Paul Graham
YC founder Paul Graham’s talk focused on one of the all-important problems facing budding startups: raising money. And he had good news, at least as far as entrepreneurs are concerned.
There’s an increasing tension between so-called Super Angels and Venture Capitalists (which manifested itself in AngelGate). Unlike traditional angel investors, Super Angels are investing other people’s money, which makes them similar to the VC camp. But, unlike VCs which have historically invested large sums of money (usually $1M+), Super Angels are happy to make many, much smaller investments.
This gives entrepreneurs more control — they can raise exactly how much they want instead of having to take a giant Series A round. It’s also led to larger VCs making small (~$100K) investments to compete more directly with the Super Angels.
This has another consequence: because VCs are mostly price-insensitive at this point (they view these seed investments as options to invest larger sums down the road), they don’t mind if the startup valuation grows higher than it would have. Which is great for the entrepreneur, but is bad for Super Angels who do care about the startup’s valuation. This, Graham says, could lead to what looks like another bubble with skyrocketing valuations, but hopefully without the pop at the end.
In the long term, this probably isn’t sustainable — Graham says that VCs and Super Angels will increasingly become one and the same, as the top VCs who add value are weeded out from the rest. But he thinks that process will take time, since the VC industry moves at a “glacially slow” pace. Until then, we’ll keep seeing those sky-high valuations for companies that appeal to both VCs (who think the company has a chance to IPO) and Super Angels (who think the company has a chance at an early, lucrative exit).
For more on this topic, see our post on The $4 Million Line. Graham will also be publishing an essay covering his talk, which we’ll post a link to as soon as it goes live.
Andrew Mason
Groupon founder Andrew Mason decided to take a different approach with his talk: he gave an old pitch for his original startup The Point, which eventually evolved into the wildly successful Groupon. The Point was a collective action platform that would let users take action together — for example, to raise money to build a dome around Chicago to block out the city’s frigid winter weather (yes, this was an actual initiative on the site).
But Mason’s (old) pitch wasn’t a good one, and The Point never really gained traction. So what went wrong? Mason pointed out some of the original company’s main flaws: it was about a vision more than making a tool that was actually useful. Mason was thinking of what the Point could become five, ten years down the road, without figuring out how to get people to actually use it.
Another problem: you need to recognize and embrace your constraints, and figure out what’s practical. You also need to realize that you’ll probably fail. Many people who are thinking of launching startups are very smart — they’ve succeeded in the past and the notion of failure isn’t really conceivable to them (Mason fell into this camp when he was working on The Point). Now, at Groupon, he constantly reminds himself of ways he could fail — the company has a bunch of magazine covers hanging on the wall near the entrance featuring companies that have gone downhill after massive success, like MySpace and AOL.
Image by Robert Scoble/Scobleizer on Flickr
benchcraft company portland or
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
robert shumake twitter
robert shumake twitter
robert shumake twitter
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
robert shumake detroit
This was probably inevitable: the minute that Dodd-Frank cracked down on the fees charged by credit cards aimed at students, some other bright financial innovation would crop up. This time, a debit card aimed at students. Which carries lots of fees. Ylan Mui reports that a company called Higher One has started signing up colleges around the country, taking on the burden of providing cash to students. In return, it gets lots of fees:
Students say several of the fees associated with Higher One’s card are particularly irksome, including the $19 inactivity fee, a 50-cent charge for using a PIN to make a purchase rather than a signature, and a $2.50 fee for using other banks’ ATMs…
Higher One said that only 1 percent of customers have been charged an inactivity fee and that more than half are charged the 50-cent fee only once. All fees are listed on Higher One’s Web site, along with tips on avoiding them.
“We have a big effort with educating students on how to use the account,” Smith said. “We’re very passionate about financial literacy.”
If the fees are listed on Higher One’s website, they’re not exactly prominent. I did find this page, eventually, via this blog entry, but it just says that “when you swipe & sign, you won’t be charged the PIN-based transaction fee”. I haven’t been able to find a page showing a 50-cent transaction fee anywhere*, although I did manage to find this page, showing a $25 fee for domestic wire transfers and a $50 fee for international wire transfers. “Higher One offers less costly alternatives for transferring funds”, it says, without giving any indication what they might be; I suspect that what they’re talking about is transfers to or from people who have already registered somehow with Higher One.
It should go without saying that any firm which is “very passionate about financial literacy” would encourage, rather than penalize, simple, cheap and safe PIN-debit transactions. It would not give students a debit card and then tell them that if they want to avoid fees they should select the “credit” option rather than the “debit” option when they come to pay.
And I can’t think of any good reason to charge a $19 inactivity fee to people who haven’t used their cards in 9 months.
The fact is that students are often very naive when it comes to money, and it’s easy to gouge them once or twice before they learn that banks are not necessarily on their side. If you can get your card accepted by a majority of freshmen every year, and then come up with all manner of weird fees to hit them with, that’s a great way of making money out of ignorance.
Meanwhile, all students should have a bank account: giving them a debit card instead only serves to maximize the number of unbanked students. So while I’m sure cards like this are attractive to colleges, it would be great if either the colleges or else the Consumer Financial Protection Bureau started being a lot more critical of them. Prepaid cards only ever make sense if the alternative is being completely unbanked; that should not ever be the case for students.
*At Southern Oregon University, Higher One agreed to waive the 50-cent PIN-debit charge, but only if there was a simultaneous “swipe-and-sign” campaign. If the campaign is unsuccessful and students do the sensible thing by using PIN debit, then the university can be charged $2 per student for “PIN fee elimination”.
Update: Higher One’s Donald Smith responds:
Higher One was founded 10 years ago by three college students (undergraduates at the time) who were looking for streamlining the way financial aid refunds were distributed to students. Today we work with more than 675 campuses across the country, have a 97% client retention rating, and an A+ rating with the BBB.
The OneAccount is Higher One’s optional, no minimum balance, no monthly fee, FDIC-Insured checking account created by students for students. We do not offer a stored value card. We are very open with our fee schedule. We post it on every program website for all to access, explain each fee, discuss how to avoid each fee, and provide students with a web page that tells them how to use the account for free (which you’ve already found). Because of this, we believe that our customers pay less than half the amount in fees that the average bank checking account customer pays per year.
Two of the fees you referenced in your blog are the PIN fee and the Abandoned Account Fee. The PIN fee is easily avoided by choosing a signature based transaction at the checkout. The majority of students uses it in this manner and is in turn protected by MasterCard’s Zero Liability Policy against fraudulent charges (a safer way of purchasing than a PIN based transaction). We do not have an inactivity fee on our fee schedule – we don’t penalize students who do not use their accounts. We do have an Abandoned Account Fee of up to $19, for those who have abandoned their accounts, but this has been charged to less than 1% of all OneAccount holders in our company’s history because of our proactive outreach plan.
Higher One offers no instruments of credit. As a matter of fact, we’re generally in favor of initiatives restricting students’ access to credit cards and promoting financial literacy. This is why we offer a full range of financial literacy resources along with the services we provide.
I particularly dislike the implication, here, that PIN-based transactions are unsafe. They’re not; they’re just less lucrative, in terms of interchange fees, than signature-based transactions.
Today Y Combinator is holding its sixth Startup School, where a roster of Silicon Valley’s most experienced and successful founders and investors come together to lecture hundreds of eager entrepreneurs. The event is always extremely popular, and today is no exception — the lecture hall on Stanford’s campus is packed to the brim.
Today’s event will feature eleven talks, including lectures from the likes of Paul Graham, Mark Zuckerberg, and Ron Conway. The first session — which featured Andy Bechtolsheim, Paul Graham, and Andrew Mason — just ended. You can find my notes from each talk below, and we’ll be posting more later today on each cluster of speakers. You can also watch a live stream of the event right here.
Andy Bechtolsheim
Sun founder Andy Bechtolsheim’s talk revolved around innovation. He kicked off with a brief history of the incredible changes we’ve seen in the computer industry in a brief period of time, with the number of transistors on a chip increasing a million fold since 1970 and networking technology seeing similarly impressive gains.
Bechtolsheim says that there are a few key lessons from what’s gone on in terms of web innovation: first, the time from innovation to adoption can be remarkably short (see Google’s rapid adoption, for example). And the key to success isn’t to be first (after all, there were many search engines available before Google came out). Instead, it’s important to be the first to solve the right problem.
So why is there so much focus on web companies? Bechtolsheim says that it’s primarily because starting one is so cheap, relatively speaking. You no longer need to have your own infrastructure — with AWS, you can get up and running for cheap. It’s also cheaper than ever to raise awareness due to the proliferation of blogs, Twitter, etc.
Paul Graham
YC founder Paul Graham’s talk focused on one of the all-important problems facing budding startups: raising money. And he had good news, at least as far as entrepreneurs are concerned.
There’s an increasing tension between so-called Super Angels and Venture Capitalists (which manifested itself in AngelGate). Unlike traditional angel investors, Super Angels are investing other people’s money, which makes them similar to the VC camp. But, unlike VCs which have historically invested large sums of money (usually $1M+), Super Angels are happy to make many, much smaller investments.
This gives entrepreneurs more control — they can raise exactly how much they want instead of having to take a giant Series A round. It’s also led to larger VCs making small (~$100K) investments to compete more directly with the Super Angels.
This has another consequence: because VCs are mostly price-insensitive at this point (they view these seed investments as options to invest larger sums down the road), they don’t mind if the startup valuation grows higher than it would have. Which is great for the entrepreneur, but is bad for Super Angels who do care about the startup’s valuation. This, Graham says, could lead to what looks like another bubble with skyrocketing valuations, but hopefully without the pop at the end.
In the long term, this probably isn’t sustainable — Graham says that VCs and Super Angels will increasingly become one and the same, as the top VCs who add value are weeded out from the rest. But he thinks that process will take time, since the VC industry moves at a “glacially slow” pace. Until then, we’ll keep seeing those sky-high valuations for companies that appeal to both VCs (who think the company has a chance to IPO) and Super Angels (who think the company has a chance at an early, lucrative exit).
For more on this topic, see our post on The $4 Million Line. Graham will also be publishing an essay covering his talk, which we’ll post a link to as soon as it goes live.
Andrew Mason
Groupon founder Andrew Mason decided to take a different approach with his talk: he gave an old pitch for his original startup The Point, which eventually evolved into the wildly successful Groupon. The Point was a collective action platform that would let users take action together — for example, to raise money to build a dome around Chicago to block out the city’s frigid winter weather (yes, this was an actual initiative on the site).
But Mason’s (old) pitch wasn’t a good one, and The Point never really gained traction. So what went wrong? Mason pointed out some of the original company’s main flaws: it was about a vision more than making a tool that was actually useful. Mason was thinking of what the Point could become five, ten years down the road, without figuring out how to get people to actually use it.
Another problem: you need to recognize and embrace your constraints, and figure out what’s practical. You also need to realize that you’ll probably fail. Many people who are thinking of launching startups are very smart — they’ve succeeded in the past and the notion of failure isn’t really conceivable to them (Mason fell into this camp when he was working on The Point). Now, at Groupon, he constantly reminds himself of ways he could fail — the company has a bunch of magazine covers hanging on the wall near the entrance featuring companies that have gone downhill after massive success, like MySpace and AOL.
Image by Robert Scoble/Scobleizer on Flickr
robert shumake detroit
robert shumake detroit
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
robert shumake detroit
robert shumake detroit
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
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The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
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The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
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robert shumake hall of shame
robert shumake hall of shame
robert shumake hall of shame
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
robert shumake hall of shame
Photographs are often taken for posterity reasons. The preservation of moments captured by the camera lens in these photographs are very much loved by all people for years to come. In fact, many families around the world have a camera or two in their household in order for them to take pictures of treasured times. There are also those people who take professional courses in photography and upon completing the course, sets up a professional studio to meet the needs of the society for really outstanding pictures.
But if you are just a simple person that has the talent for taking extremely good photographs, and want to make a living out of it, you definitely can. There are several ways of making money with photography. It has even gone beyond the traditional freelancing opportunity that it was years back when the use of the Internet was still limited to a lucky few. Nowadays, people like you have found a good way in making money with photography online. Here are the three ways that you can earn money from the photographs you take.
1. Selling your photos at stock photography websites is one way for you to earn money online. Stock photography websites stores photos that can be licensed for different purposes. Many magazines, publishers, ad agencies, artists, and designers go to these websites to get the photos that they need instead of hiring a photographer, which entail more costs. As the photographer, the photos you shoot exclusively become your stock and are copyrighted to you. This just means that if a particular person is interested in a photograph, he will have to pay you for it and since you hold the copyright to your photos. The big advantage, and asset here is, you can sell them over and over again, reaping for yourself more profits each time you do so.
2. Another way to earn money from your photos is by selling them through your very own website. Before you complain about all the technicalities of putting up a website, think of the advantages it can bring you. First, having a website will definitely establish you as a photographer. Plus, you can sell directly to your clients without having another entity to get a cut from your sales. And it won't really cost you much to have a company host and maintain your website. In fact, you are looking at about $10 a month for hosting.
3. The third way in getting income from your photographs is through photo-sharing sites. Marketing your photos in these sites will get you the attention that you need to make money with your photographs since many people visit these sites frequently. And though you really can't sell your photos through these sites, you can subtly imply to the users that licenses to your photos are for sale so they can further contact you.
These are just some of the ways to making money with photography online. If you take any of these steps to create a flourishing online business for something that you love doing, surely you will get the profits that are right for your talents. And it won't even feel like work because it is something you enjoy in the first place.
robert shumake detroit
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
robert shumake detroit
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Macsimum <b>News</b> - Apple number 65 on 'Newsweek' environmental ranking
MacsimumNews - Your Leading Apple News Alternative. Apple number 65 on 'Newsweek' environmental ranking. Posted by Dennis Sellers Apple ico Oct 19, 2010 at 7:59am. image Yesterday we noted that “Newsweek” has released its list of ...
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