Videos

Memphis Soul Boosts Startup Economy

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Last month, the Engine production team took a trip down South to experience for ourselves the vibrant local startup economy we’d been hearing about in Memphis, Tennessee. We had the opportunity to meet a number of local entrepreneurs, some based full-time in Memphis and some just in town for the summer, participating in an accelerator program at StartCo. Across the board, we found a group of extremely dedicated tech entrepreneurs, many working seven days a week, more than 12 hours a day, to ready their companies for launch -- and a community taking shape that is passionate about building a better future for the city.

Some founders were lifelong Memphians who had chosen to keep their companies there, aiming to bring jobs, vitality, and a new phase of entrepreneurship to their hometown. These founders spoke of Memphis’s rich business history and entrepreneurial spirit. St. Jude, FedEx, and Autozone are among the companies that call Memphis home, and many founders spoke about these companies with an excitement that seemed to inspire their own hard work and dedication. Within the community, we met logistics startups, saw innovation in the healthcare space, and heard about medical device accelerators in the area. These were companies obviously attracted to Memphis for the resources already built into the local economy.

We also found teams from all over the country who had come to reside in the center of downtown Memphis and take advantage of the startup ecosystem that has taken shape there within the last few years. Teams from places such as NYC and Silicon Valley had come to Memphis to focus on building their businesses, looking for a different pace and a less saturated market. They described their year-round homes as having a lot of noise, and they had come to Memphis for the summer to focus on building their product -- finding real benefit living in a place where they could find a little more calm. They were astounded by the abundance of resources at their disposal: talented mentors, investors, and other startup founders -- all ready and willing to help.  

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This is not to say that Memphis is lacking a noise of its own -- we were able to meet with entrepreneurs in a variety of backdrops -- from their offices, to blues clubs on Beale Street, to the tops of their tents at BBQ Fest alongside the Mississippi River. The StartCo accelerator uses Memphis in May, an international festival showcasing arts, food, and music, as a networking opportunity for its companies. As one entrepreneur put it, “What better way to build relationships than over beer and barbeque?” By the end of our visit, we had to agree. There was a liveliness and enthusiasm -- at the festival on the river, as well as in the office, that was contagious.

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As with the barbeque, startup founders have taken notice, and taken advantage, of the Southern hospitality they have encountered in Memphis. A very common theme in the interviews we conducted was the sense of community, kindness, and the willingness of anyone and everyone to help out. We spoke with the founders of eDivv from NYC, who told us “the best thing about Memphis is everyone knows each other, and everyone is willing to help. They want to see Memphis succeed. It’s a small community within a big city.” Layla Tabatabaie of BarterSugar agrees: “Of all the meetings I’ve had with local residents, professors, and others in the area, they’re all willing to help and they’re all very kind. I think that is something that is sometimes harder to find in places like New York.”

As a Memphian for the vast majority of my life, it was no surprise to hear about the close-knit community as well as the kindness of complete strangers. What I was surprised to hear, though, was how these ingredients of a place I lived for 18 years are fueling a new phase of growth in the local economy. I left for San Francisco without any knowledge of a startup community in Memphis, and it was not until I spent a couple of years involved in the community here that I began to take notice of the activity in my own hometown. It was very exciting to return to Memphis and discover such a vibrant community there -- one so diverse and different than that of Silicon Valley, and one that had not existed in the Memphis I knew.

Whether a lifelong Memphian, or a founder just in town for the summer, everyone we met had a personal interest in boosting the local economy. They hoped to create jobs and bring growth to local businesses, with a heartfelt interest in improving the community they had become a part of. Though the concept of technology startups reviving the local economy may be a fairly new one for Memphis, the passion and dedication of Memphians to make Memphis a better place is not. When we asked locals to sum up Memphis in one word, one we heard quite often was “soul”. It’s easy to see how the history and soul of Memphis are finding their way into a new chapter.  

Watch our Startup Cities, Memphis video here:

There Are Lessons To Be Learned Outside Silicon Valley

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Skip Newberry, President of the Technology Association of Oregon, co-authored this post.

When asked for a general perception of what the startup community looks like, all too often people will volunteer information about bespectacled youths wandering around Silicon Valley with bundles of money, wearing ironic t-shirts, sipping single-origin coffee, and creating apps for you to while away time on your commute. It is, in a sense, the same type of reaction to the Portlandia phenomenon. Neither of these characterizations is entirely false–to be fair there is a lot of bird-related art throughout the Rose City–but there is a truth behind both perceptions: a new birth of economic growth and prosperity that cuts across traditional socio-economic lines that can be an enormous force for good in our communities.

Earlier this year, Engine teamed up with the Technology Association of Oregon to tell the story of Portland’s startup community. It’s the first part of the Startup Cities series that will profile more underrepresented communities around the country where startups are taking root and presenting new avenues for cities to capitalize on the innovation of its citizens to benefit the community as a the whole.

Portland was chosen as the pilot first because the city’s long history of entrepreneurship has translated very quickly into a supportive, thriving and prosperous startup community. The technology industry in the Portland Metro Area was the fastest growing in the country during the past ten years. In this same time period, the Portland Metro Area climbed to 9th in the country for startup density, and is attracting increasing levels of talent from Seattle, San Francisco, New York, Los Angeles, and Denver. Large companies such as ebay, Salesforce.com, Walmart Labs, SquareSpace, and Airbnb are also taking notice and expanding into the area.

And we know from Engine’s research that community benefits extend beyond the high wage tech jobs created. For every person a technology startup hires, 4.3 additional jobs are created in the local non-tradable sector. That’s everything from bakers to bankers, plumbers, and lawyers. Within Portland’s thriving startup community, these effects are visible and powerful.

But even more importantly, the community in Portland knows that to succeed everyone must work together. Serial entrepreneurs are becoming angel investors, helping entrepreneurs new to the scene jump in with both feet and grow products into businesses, and creating staying power that will help Portland succeed for years to come.

While no two entrepreneurial communities are alike, and replication of success stories can be a fool’s errand, the lessons of togetherness and support are ones on which Portland can lead, ones they can export, and in doing so become a leading community.

And Portland is just the first stop. It’s important that we start to look at the technology industry everywhere it exists to build a fuller picture of the community that is fast becoming the American electorate at large.

The Dangerous Uncertainty Over Net Neutrality

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Last month, the FCC released a proposal for new rules concerning the open Internet, and now the public has four months to provide comment. Those proposed rules pay a lip service to an open Internet -- something we strongly support -- but their substance tells a different story. One of the most dangerous aspects of the proposal is the resulting uncertainty that startups and investors would face. Unfortunately, until and unless we have real net neutrality rules in place, that uncertainty is unavoidable.

As any business owner will understand, when you’re trying get a startup off the ground, any uncertainty can be dangerous -- enough to spook investors and stunt growth. In this way, startups and other business owners are already feeling the impact of the net neutrality debate.

Jamie Wilkinson is the co-founder and CEO of VHX, an online video distribution company that helps artists connect directly with their audience. Watch Jamie explain how the uncertainty over net neutrality is already affecting his business.

So, a speedy solution is required here. But it must also be the right solution.

FCC Chairman Wheeler’s current proposal is not the right solution. The Chairman has stated his preference to rely on Section 706 to implement so-called open Internet rules. While this sounds fine, this year’s Verizon v FCC decision makes that legally impossible. As a result, the Chairman’s proposed rules would result in years of litigation. Likely to be overturned, we’d be left exactly where we are today

Instead, the Internet needs to be reclassified under Title II as a “common carrier” (like telephone lines, roads, highways, and trains). Only once the FCC has done that can it ensure a true open Internet and deliver the certainty startups need.

In a recent letter to the FCC, Venture Capitalist Brad Burnham explained that without the certainly Title II reclassification brings, Union Square Ventures (and other VC firms) will not invest in Internet startups like they have been to this point:

“Investors like us will need to extract a risk premium before supporting an unproven service, which will hurt the creators who are ultimately responsible for innovation. Worse, investors like us will decide not to risk our partners' capital at all to back an applications layer start-up, because an incumbent could easily copy the basic elements of a new service and beat them in the market by paying for a faster connection to consumers. We will also be very reluctant to fund companies building services that compete with current or future offerings of the cable or telecommunications companies that can directly impact a consumer's experience of a new service.”

Not only would the proposed rules allow for pay-to-play schemes, but they would allow ISPs to make “commercially reasonable” deals to prioritize certain content. This violates the concept of net neutrality, and -- potentially even worse -- determining what is and is not “commercially reasonable” would require the kind of legal budgets and lawyers on staff that startups just don’t have. If you’re a startup and can ISP proposed a “commercially unreasonable” deal, would you have the time and resources to bring a case at the FCC? This added layer of uncertainty is another reason we cannot support Chairman Wheeler’s proposal.

Give Congress a Second Chance

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This post is by Ted Henderson, Founder of Capitol Bells.

congressional approval rating hovering around 13 percent suggests a failure to engage the public in the legislative process, but technology can provide a solution by giving citizens and politicians a new way to interact. Representatives need to know what we think in order to represent us.

Public engagement means sharing your voice with your community and elected leaders. Unfortunately, it’s not as easy as pulling your elected official aside and telling them what you think. But what if it was that easy? What if there was a way to communicate with your community and your elected officials right from your laptop or smartphone?

The primary means for public engagement with Congress has been calling, emailing, or writing letters. But the volume of constituent mail has exploded in recent years. Over 10,000 advocacy organizations now direct millions of e-mail form letters to congressional offices, and as a result the value of each voice has been devalued.

Social media and crowdsourcing technologies provide new channels for engagement and direct communication with the political and social decision makers. Anyone can share their positions on specific bills through social networks, connect with communities, and amplified their voices.

Capitol Bells quantifies the voices behind a certain position, then uses those tallies to score politicians on how well they are representing. For instance, a user interested in immigration reform can use CapitolBells.com to express their support for H.R. 15 -- the House’s comprehensive immigration reform legislation. By creating and sharing a “Motion” with friends, this user can explain why the bill is important, try to collect more support,  and push her Congressman to cosponsor H.R. 15.

Hundreds of Members of Congress and thousands of congressional staffers already use Capitol Bells to promote their own legislation. Congresswoman Grace Meng wrote in support of H.R. 15:“It is well past time to fix our dysfunctional immigration system that has hurt too many people for far too long. The American people will not accept any more excuses. The time for CIR must be now.” Every time a constituent agrees with her position on the platform, Ms. Meng’s overall score as a Representative goes up.

Congressional approval ratings may be low, but our opportunity to engage with Congress has never been higher. With social media, and tools like Capitol Bells, lawmakers have a chance to take our voices into account like never before. Let’s give Congress a second chance to represent us.

Watch Ted's Startup Speak video:

Startups Speak: Ted Henderson on Vimeo.

Engine Discovers Tech Cities Across America

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This year, Engine is hitting the road to tell the stories of entrepreneurial communities in cities and towns all across America. With a video series, produced by our own Daniel Schwartzbaum, we’ll shine a light on founders and entrepreneurs, asking them why they do what they do, and what it is about their community that gives them the support they need.

We chose Portland for a our pilot project -- just a short flight from our home here in San Francisco, but light years away in terms of community building. What we found was a collaborative atmosphere where founders, capital investors, city and state government, and other local organizations came together to build, with intention and thoughtfulness, a community that feeds on the boundless energy of its proponents.

With the generous support of the Technology Association of Oregon, and their President, Skip Newberry, we have started to put together the film on what we found.

Here is just a taste: the preview trailer we produced for TAO’s office opening party last week. The full episode will be out soon. During the rest of this year, we want to discover more tech cities around the country -- let us know if you and your community want to be involved. We can't wait to hear your story.

 

 

Startups Speak: We’re Changing the Narrative of the Patent Troll Story

Startups Speak: We’re Changing the Narrative of the Patent Troll Story

If you’ve been following the patent troll epidemic in the news at all, you’ve probably also heard of the company I work for. Six months ago, I started working at FindTheBest. Two days after I started, we were served with our first demand letter from Lumen View Technology LLC. The next A day, Lumen View Technology filed a lawsuit in the U.S. District Court for the Southern District of New York.

Startups Speak: Democracy Requires a Right to Privacy

Startups Speak: Democracy Requires a Right to Privacy

To date I have been operating on a rather simple premise. If democracy equals freedom and freedom equals privacy then - by the transitive property of mathematics - democracy and privacy must be intricately linked. Like all constitutional queries, the discussions we are having about privacy - and those yet to be had - are centered around a single question: what kind of country do we want to live in?

Startups Speak: I'm Here to Contribute, Build, Collaborate and Learn

Startups Speak: I'm Here to Contribute, Build, Collaborate and Learn

Pedro Sorrentino hails from Sao Paolo, Brazil, and is currently living in San Francisco working for SendGrid. While attending graduate school in Boulder, Colorado, Pedro started and sold his first business. Once he graduated, however, Pedro had a hard decision to make. Based on his visa class, and the fact that he came from Brazil, the rules stated that it was mandatory for him to return home upon graduation. Would he go back to Brazil to work for his company? Or could he find an employer who would sponsor his H-1B application to stay in the United States?

Startups Speak: The Entrepreneur Visa is Key

Peruvian born, Fulbright scholar, engineer, entrepreneur, and Hattery Co-Founder and Managing Director, Luis Arbulu, takes us through his perspective on current immigration policy and the Senate “Gang of Eight” bill. The highlight? The visa specifically for entrepreneurs.

In his spare time, Luis works with the White House Office of Science and Technology Policy and USCIS as an Entrepreneur in Residence, advocating for growing companies and entrepreneurs right at the center of it all.

If you have a story to tell, email editorial@engine.is

Startups Speak: We Won't Be Hiring in the U.S.

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Sumit Suman is the co-founder of Mentii, an online mentoring platform connecting successful mentors with aspiring young people. Sumit started the business both in New York and Bangalore in order to benefit from capital, talent and the market across two startup hubs. But, as the co-founder of Mentii, it was imperative that Sumit could work on the U.S. side. This is where the trouble began.

The whole visa process was an expensive distraction, especially during the early bootstrapped stage when the team needed to devote all their resources to finding and proving the market. After receiving a protracted Request For Evidence (RFE), where responding to it would have resulted in further legal expenses, Sumit had no choice but to withdraw his visa application. This is despite the fact that Mentii had already invested 40 percent of their total expenditure on immigration-related costs!

Now back in India, Sumit explains that his decision was the only option for his business; even if there was a legal (though uncertain) way to stay in the U.S. in order to grow the company, the cost of doing so was too prohibitive. While the Mentii team will still find a way to engage the U.S. market, and U.S. investors, the team will not be growing here -- in other words, no additional jobs will be created in America.

Startups Speak: Sumit Suman

from Engine Advocacy on Vimeo.

If you have an immigration story to tell, email editorial@engine.is

Startups Speak: Immigration and the Innovation Economy

This post is by Fabien Beckers, Co-Founder at Morpheus Medical.

I am a foreign-born entrepreneur in America. My company, Morpheus Medical, has created the first cardiac diagnostic tool that provides 3D interactivity, flow and pressure inside the heart. And all it takes is a ten minute MRI exam. But since I am a French citizen, I faced deportation, and the possibility of losing the chance to build this life-saving company. Understanding the importance of immigration reform is understanding what innovators, of any nationality, are capable of achieving.

Heart-related diseases account for more than a third of all U.S. deaths, and in 2010, the total cost was estimated at around $444 billion; treatment of these diseases accounts for about $1 of every $6 spent on health care in this country. These numbers are second only to oncology -- the diagnosis and treatment of cancer.

Responding to the current lack of accuracy in diagnosis, our technology not only solves the problem, it also reduces the time required by doctors, and therefore lowers the cost. In addition, the non-invasive aspect makes our solution perfectly suited to diagnosing small children with heart defects and diseases.

After studying for my PhD at Cambridge in the UK, I came to the United States in 2010 to attend Stanford’s Graduate School of Business where I certainly benefited from the best education this country has to offer. But when I graduated and wanted to start a business of my own, I faced an additional challenge as a result of my nationality.

Founding a business is already a very challenging and chaotic process. When finding partners, investors and customers is just the beginning, immigration battles present another, totally unnecessary, hurdle.

At Morpheus, we were lucky enough to pique investor interest early, but unfortunately, the investment was conditional upon securing my immigration status. When my H-1B application was denied, my appeal failed, and other avenues were successively closed off, the survival of this company came down to one person in one office in California who thankfully put a stamp on my O1 application.

This is not how the system should work.

No company, community, or country can survive without talent. So we should be helping brilliant innovators who want to build companies that will change lives, here in America. Everyone I’ve spoken to -- Republicans and Democrats -- agrees that this issue needs attention. Now is the chance to act; this bill needs our support. A quarter of all tech startups have an immigrant founder. I think I speak for many of these founders when I say that I want to stay here and build a successful company that creates jobs. We need an immigration system that supports the American innovation economy.

If you have an immigration story to tell email editorial@engine.is.

Startups Speak: Reward Individuals Who Have Contributed

Michael Ang (or Mang as he is better known) is an engineer from Canada. He works for Changemakrs here in San Francisco. In fact, Michael has been working in the United States for over fifteen years -- mostly within the startup community. He was the first employee of Xoom -- a company that is now post IPO and employs hundreds of Americans. Despite Michael’s experience, his masters degree from NYU, and his contribution to the startup community -- and the U.S. economy as a whole, he has only ever been granted a succession of temporary visas. Watch Michael tell his story, and tell us what he’s most excited about in the new immigration bill.

Startups Speak: Michael Ang from Engine Advocacy on Vimeo.

 If you have an immigration story to tell, email editorial@engine.is.

Startups Speak: GoodApril Founder Says Reward Risk-Takers With Visas

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It is a near-universal fact that no one enjoys filing their taxes. It’s usually difficult and most definitely a boring way to spend our too-scarce time.

GoodApril wants to change all that by disrupting the way that Americans plan for and file their income taxes. Like any founder with an idea who wants to make our lives better, Benny Joseph wanted to assemble the best possible team to execute his idea.

So that’s what he did. But right when the company was ready to take the next step, and incorporate as an official business entity, Benny realized that there was no way through the visa issue he was facing with his best engineer. The result? “We had to part ways; we couldn’t go forward together.”

Unable to hire his top-choice engineer, Benny lost the knowledge and talent he wanted, and an individual with the nerve and desire to take the risks associated with starting a company. As a result, it took the team at GoodApril longer to build their first product, and to raise funding to hire the people they needed -- including more engineers, writers, and marketers.

From the perspective of the engineer in question, he was tied, through the terms of his existing visa, to a company he didn’t want to work for. With a soon-to-expire H1B visa, and a stalled green card application, he is still being held hostage as an employee with no freedom to pursue other job opportunities.

From Benny’s point of view, and from ours, we should be rewarding risk takers, and that needs to happen through thoughtful reform. “I think the Startup Visa Act (included in Startup Act 3.0) is a good step in the right direction,” says Benny. “Immigrant entrepreneurs should be encouraged to build new businesses. If you take a look at many of the great companies in our country, a sizable amount are founded by immigrant entrepreneurs. They create jobs and value to the economy and help America keep a step ahead of the rest of the world.”

The current immigration system, with no visas for startups, and caps on existing visa classes for high-skilled workers, is harming entrepreneurs, would-be employees and the American ability to build successful businesses and innovate at capacity.

Startups Speak: Benny Joseph from Engine Advocacy on Vimeo.