This interview with Aaron Levie, co-founder and C.E.O. of Box.net, an online file storage company, was conducted and condensed by Adam Bryant.
Q. Talk about the culture of your company.
A. Everyone has a start-up mentality still, and we’re small enough where you get the right kind of energy and dedication, so everyone feels really a part of what we’re doing. People are able to question each other about strategies, whether they’re in marketing, engineering or product.
We try to keep it fairly low on hierarchy. Everyone is encouraged to be entrepreneurial and people tend to be extremely passionate, but it’s not about taking credit or being arrogant about what we’re doing.
We’ve been able to do away with just a lot of the corporate kind of things that I think slow down organizations and don’t result in productive behavior, and instead we’ve been able to get a lot of people focused on really having a good time, which helps us stay fast and innovative. And I think that ultimately is the only reason that people even want to go to work or want to stay in business — to have a good time while collaborating to accomplish a big vision.
Q. So what are some specifics?
A. We had our first ever “hackathon” at Box a few months ago. The engineering team pulled an all-nighter, from 8 p.m. until noon the next day, on projects outside their daily job description. We then had a judging panel at lunch, and the entire company got to watch the engineers present some amazing new features. It was fun and people goofed off but it was also really inspiring, and I think it brought the whole group together.
Q. What were some important leadership lessons for you?
A. In middle school, I did magic shows. It actually applies to what I’m doing now because it’s all about getting in front of people and telling a story, something that people buy into that is hopefully entertaining. It’s all about capturing people’s imaginations and getting them excited about what’s possible.
Q. What about as a C.E.O.?
A. I think a big jump was to managing or helping the managers of the people doing most of the hands-on work on projects — being one degree away from the action and figuring out and understanding what that means in terms of leadership.
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By Jon Swartz
SAN FRANCISCO — A surge in social-media use by small businesses reflects a shift in how they operate and their comfort with increasingly easy-to-use technology. In growing numbers, small-business owners are adopting social-networking services, location-based services, Twitter and online video to promote products and services, according to a new study by MerchantCircle, a social network for small businesses. It polled a fraction of its more than 1.3 million members.
The survey results are the strongest evidence yet that small businesses — which account for more than 90% of all U.S. companies and fuel the economy — are accelerating their use of social media at the expense of traditional media such as newspapers, the Yellow Pages and radio. Even e-mail messages have taken a beating. More
By Bruce Bigelow
San Diego’s life sciences companies continued to raise big money, which is a good thing, since a survey shows that venture funding for biotech and medical device companies accounted for more than 80 of all second-quarter VC deals in San Diego. We’ve rounded up all that and more for you here:
—An expert panel that advises the FDA voted 10-6 against approving an obesity drug developed by Mountain View, CA-based Vivus (NASDAQ: VVUS), saying the negative effects outweighed the weight-loss benefits. After the ruling, shares of San Diego’s Arena Pharmaceuticals (NASDAQ: ARNA) climbed toward its 52-week high of $5.93 a share, but San Diego-based Orexigen Therapeutics (NASDAQ: OREX) continued to trade around $4 a share. Both San Diego biotechs are developing obesity drugs of their own.
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Where are They Now?
What happened to the young entrepreneurs who have appeared on our annual 30 Under 30 List in the past? Book deals and big paydays are among the updates.
Box.net's (2008) Aaron Levie and Dylan Smith grew their company more than 535 percent in 2009 and tripled revenue in the first half of 2010 compared to the same period in 2009. Box.net allows users to share, store, and access any type of digital file from anywhere at anytime, and now has more than 4 million users, ranging from SMBs to giants like Volvo, Audi and Coca Cola. The company launched one of the first customized business applications for the iPad, developed mobile applications for the iPhone and Blackberry, and also integrated with other mobile productivity applications. Last April, the founders landed $15M in Series C financing, led by Scale Venture Partners, bringing Box.net's total venture funding to $29.5M. Levie and Smith plan to invest aggressively in R&D and will add a significant number of employees. More
By Tim Kopp
ExactTarget, a little-known but powerful email marketing company with more than 600 employees and north of $100 million a year in revenues, closed on $145 million last year from investors including Battery Ventures and Technology Crossover Ventures. It’s looking like money well spent.
Customers of ExactTarget have long used it to send out email coupon offers, fraud alerts and other electronic statements. In March, with the acquisition of Cotweet, the company moved into social media. Now, clients like Home Depot can communicate with and keep tabs on their own customers across a spectrum of social media, from email to Twitter.
Apparently, they like the results they’re getting. ExactTarget, based in Indianapolis, just experienced its 37th consecutive quarter or record growth. I just talked with the company’s chief marketing officer, Tim Kopp, about where that growth is coming from and why.
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ATLANTA, Jun 29, 2010 (GlobeNewswire via COMTEX News Network) -- Alimera Sciences, Inc., (Nasdaq:ALIM), ("Alimera"), a biopharmaceutical company that specializes in the research, development and commercialization of prescription ophthalmic pharmaceuticals, has submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for Iluvien(R), (flucocinolone acetonide intravitreal insert), its investigational, sustained drug delivery system releasing sub-microgram levels of fluocinolone acetonide for the treatment of diabetic macular edema (DME). In the submission, Alimera requested priority review, which, if granted, could result in an action letter from the FDA in the fourth quarter of 2010.
"This is a significant milestone for all of us at Alimera, and represents a major advance toward a rapid and sustained visual acuity benefit for DME sufferers," said Dan Myers, president and CEO of Alimera, adding, "We believe that Iluvien(R), if approved, will provide a needed alternative to the multiple injections of corticosteroids and anti-VEGF therapies used off-label for extended efficacy in DME. We believe this would be the first ophthalmic drug therapy to be approved for DME and the only DME treatment that works in terms of years, not months."
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By Deborah Gage
(excerpts from VCJ June issue)
VCs invested $6 billion in 870 security companies from 2002 to 2007, but they have pulled back for the past couple of years, even as cybersecurity has become a national security concern. Every month, it seems, there is at least one security incident that leads people to wonder whether cybersecurity has finally gotten out of control.
Upside to Less Investment
Not everyone thinks the funding decline is a problem. VCs “invested in dozens of competing companies thinking the enterprise security market was much bigger than it was,” says Alan Paller, director of research at the SANS Institute, a non-profit security training and research organization in Bethesda, Md. “Less money that is targeted better will make a lot more money than the mindless investment of the last decade.”
In any case, there are signs that security investments and security problems are becoming better aligned, and that security is once again a place where VCs could look for good returns. Exits for security companies are more than twice as high as they are for other information technology companies—about 4 times revenue vs. 1.8 times revenue, according to Randy Hawks, a managing director of Claremont Creek Ventures.
ScanSafe, for instance, whose service blocks malware encountered on the Web, was acquired by Cisco in October for $183 million in cash and retention incentives. It had previously raised $32 million from Balderton Capital, Benchmark Capital, Montagu Newhall Associates, Scale Venture Partners and others.
Eldar Tuvey, co-founder and CEO of ScanSafe, says Rory O’Driscoll of Scale Venture Partners helped the company by applying his business knowledge of software as a service. “They have at Scale what they call the magic number,” Tuvey says. “They ask questions about productivity-per-head, your retention rates for customers and your marginal cost of service. Only somebody who knows SaaS knows how to think about it this way. Nobody knows it like Rory. You use it as a guide for how you’re tracking.”
By Timothy Hay
(Editor's note: This story is part of a series of profiles that examines venture-backed companies with at least $100 million in revenue, an oft-mentioned threshold used by investment bankers to determine whether a company is IPO ready.)
As PlayPhone Inc. has proven, selling a smorgasbord of mobile content for the world's best-known news, retail and entertainment companies can be lucrative. It also requires constant reinvention.
The San Jose-based company has grown quickly on the back of simple feature phones by selling content like ringtones and wallpaper. But in the past couple of years, U.S. consumers have grown to expect more elaborate content -- like games, music, apps and video -- for the small screen. Playphone has had to forge new partnerships with content providers, and adapt its business model to keep up with fast-changing consumer demand.
"People used to pay $3 for a 30-second ringtone," said Sharon Wienbar, managing director at Scale Venture Partners and a PlayPhone board member. "Now it's 99 cents for a full song. And people with iPhones don't need wallpaper. So life is not always a cakewalk at PlayPhone."
Maybe not, but venture-backed PlayPhone, whose revenue doubled to more than $100 million in 2009, occupies a catbird seat in the fast-growing mobile-content market. Wireless carriers have been unable to keep up with the ever-growing demand for content on smartphones, and this has prompted the appearance of a number of independent app stores and content clearinghouses like PlayPhone. It has also caused movie studios, retail chains, music labels and other companies to attempt to sell their own mobile goods.
PlayPhone has concentrated on building the architecture for such transactions, and it enables downloading, billing and the other necessary pieces of the puzzle, said Chief Executive Ron Czerny. The company hosts a Web site with 10 million registered users that is a clearinghouse for downloadables from brand-name companies like Walt Disney Co., Song BMG Music Entertainment and WalMart Stores Inc.
Playphone's Web site offers two subscription plans, a $5 plan and the "premium" $10 plan, each of which includes a certain amount of free content.
Wireless carriers currently earn about 40% of each transaction, with PlayPhone taking the other 60% and sharing that revenue with content publishers. Those numbers may skew further in favor of PlayPhone in the future, as billing models for mobile continue to evolve. Wienbar said that many carriers are considering reducing the cut they take from such sales, since the increasing number of transactions means they could do so without losing money.
PlayPhone also brings in revenue by licensing its technology to music labels, television stations and game-makers, so those companies can peddle their own mobile content via their own portals.
While adapting its inventory has helped the company's bottom line, it is PlayPhone's global focus that accounts for its speedy revenue ramp, Czerny said.
Founded in 2005, PlayPhone made a move toward international markets in
2008 when it acquired London-based Pitch Entertainment Group, a like-minded company with traction all over Europe, the Ukraine and South Africa. In addition to its Silicon Valley offices, PlayPhone now has operations in London, Brazil and China -- all markets where it does brisk business, Czerny said.
So even while powering mobile-content portals for top brands, and attracting subscribers to its Web site, Playphone has continued to sell ringtones and wallpapers in markets like Brazil, where simple cell phones are still dominant.
While there are a number of independent mobile content sellers competing for the same dollars - for example GetJar Inc., PocketGear Inc. and ThumbPlay Inc. - PlayPhone expects to hold a top position in the market for mainstream premium content, the kind offered by major music labels and movie studios.
And some of its competitors are beginning to explore other niches of mobile content. New York-based ThumbPlay, for instance, is now devoting "a majority of [its] focus" on providing cloud-based, streaming music for mobile, Chief Executive Evan Schwartz said. This means ThumbPlay won't be in the same head-to-head competition with PlayPhone that it once was, he said, adding that the two will still compete in some areas.
Assuming that the world markets are stable, PlayPhone is aiming to go public in 2011, Czerny said. But Weinbar, who along with investors including Cardinal Venture Capital and Menlo Ventures has invested $53 million in PlayPhone, is in no hurry for an exit.
"There is an opportunity for this to be a large exit and a strong return," Wienbar said. "But this is a company you'd be comfortable holding as a private company for a number of years, because there is still disruption going on."
Reply Inc., a San Ramon, Calif.-based platform to buy and sell online clicks and leads, has raised $15 million in venture debt from Hercules Technology Growth Capital. The company is in registration for a $60 million IPO, and has raised nearly $23 million in VC funding from Scale Venture Partners, Outlook Ventures and ATEL Ventures. More
By Tess Stynes
Biopharmaceutical company VaxGen Inc. announced revised terms in its planned acquisition of privately held diaDexus Inc. in the wake of the suspension of diaDexus' cardiac test.
DiaDexus is focused on invitro diagnostics products addressing cardiovascular disease. The company's PLAC test provides additional information over and above traditional risk factors to identify people at risk of heart attack or stroke. The company launches an automated format of the PLAC test in 2008 but suspended the commercialization of another version.
Under the revised agreement VaxGen holders will own a 62% stake in the combined company. The initial deal, announced in April, called for the owners of diaDexus, a joint venture created in 1997 between what is now GlaxoSmithKline PLC and Incyte Corp., holding 61% of VaxGen.
VaxGen under current deal also has agreed to lend diaDexus up to $6 million. If more than $4 million is borrowed, the diaDexus stake will be reduced again. The deal was announced two months after VaxGen, which makes boosters for vaccines, in February had rejected a merger proposal from peer Oxigene Inc. initially valued at $22 million.
DiaDexus raised a $40 million Series E round in early 2007 from Baker Brothers Advisors, Bain Capital's Brookside Fund, Burrill & Co., GlaxoSmithKline, Rho Ventures, Mosaix Ventures and Scale Venture Partners, according to VentureWire archives. The company previously had raised $127.5 million.
http://www.diadexus.com