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Aurich Lawson / HBO

This week, as revelations about the extent of National Security Agency (NSA) spying continued to unfold, Ryan Gallagher brought us an article about the types of hardware that agencies outside of the NSA use to gather information from mobile devices. These agencies, which include local law enforcement as well as federal groups like the FBI and the DEA, use highly specialized equipment to gain information about a target. Still, the details about that hardware is largely kept secret from the public. Gallagher summed up what the public knows (and brought to light a few lesser-known facts) in his article, Meet the machines that steal your phone’s data.

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A local shop is part of an ecosystem — here in England we call it the High Street. The owner of a local shop generally has no ambition to become a Tesco or WalMart. She’d rather experience steady growth, building relationships with customers who value what she brings to the community.

People often mourn the disappearance of their “local shops.” I’m sure it is the same in many parts of the world. Large chains move in, and the small local businesses, unable to compete on price, close. As the local shops disappear, customers win on price, but they are losing on personal service.

At local shops, they know their customers by name, remember the usual order of a familiar face, are happy to go the extra mile for a customer who will come through the door every week. It’s most often the business owner who is behind the counter filling bags and taking money.

This direct and personal relationship with the people that their business serves quite naturally provides the local shop with information to meet the needs of their customers. Customers come in and ask if they stock a certain product, one that they have seen advertised on TV; or that is required for a recipe on a recent episode of a cooking show. The local shop owner remembers that three people asked for that same thing this week, and adds it to their order. We’re not dealing with the careful analysis of data collected from thousands of customers here. The shop owner could name the customers that asked for that item — she will point out the new stock to them next time they come in.

One single store is unlikely to attract much footfall, so the business of one store relies on being part of a vibrant community. Within this community the local shops and tradespeople support each other. A customer pops into a store and mentions while paying that they are having trouble with their car; the shopkeeper recommends the garage down the road — “don’t forget to tell Jim that I sent you!”

As the co-owner of a bootstrapped digital product, I often feel like we are that local shop on the web. I know many of our customers by name, I know the sort of projects they use our software for. I follow many of them from my personal account on Twitter. I love the fact that they come to speak to me at conferences; that they feel they know us, Drew and Rachel from Perch. This familiarity means they tell us their ideas for the product, and share with us their frustrations in their work. We love being able to tell someone we’ve implemented their suggestions.

We’re also part of this ecosystem of small products. Unlike the village shops we are not bound together by location, but I think we are bound together by ethos. When selecting a tool or product to use in our business, I always prefer those by similar small businesses. I feel I can trust that the founders will know us by name, will care about our individual experience with their product. When I get in touch with a query I want to feel as if my issue is truly important to them, perhaps get a personal response from the founder rather than a cheery support representative quoting from a script.

This is business. We make a thing, and we sell it at a profit. The money we make enables us to continue to create something that people want, and to support our customers as they use our product. It also enables us to support other people who are running businesses in this digital high street we are part of, from the companies who provide the software we use for our help desk and our bug tracking system, right through to the freelancers who design for us.

I am happy with my small shopkeeper status. I talk and write about bootstrapping because I want to show other developers that there is a sane and achievable route to launching a product, a route that doesn’t involve chasing funding rounds or becoming beholden to a board of investors. I love the fact that decisions for my product can be made by the two of us, based on the discussions we have with our customers. If we had investors hoping for a return on their investment, it would be a very different product by now, and I don’t think a better one.

I think it is important for those of us succeeding at this to talk about it. As an industry we make a lot of noise about the startup that has just landed a huge funding round. We then bemoan the disappearance of products that we use and love, when the founder sells out to a Yahoo!, Twitter, or Google. Yet we don’t always make the connection between the two.

Small sustainable businesses rarely make headlines. So we, the local shopkeepers and tradespeople of the web, need to celebrate our own successes, build each other up, and support each other. I’d love there to be more ways to highlight the amazing products and services out there that are developed by individuals and tiny teams, to celebrate the local shops of the web. Let’s support those people who are crafting small, sustainable businesses—the people who know their customers and are not interested in chasing a lottery-winning dream of acquisition, but instead are happy to make a living making a good thing that other people love.

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Nate Anderson


The ghost of Steve Jobs will not be pleased to see this.

Zack Henkel

Robert Silvie returned to his parents' home for a Mardi Gras visit this year and immediately noticed something strange: common websites like those belonging to Apple, Walmart, Target, Bing, and eBay were displaying unusual ads. Silvie knew that Bing, for instance, didn't run commodity banner ads along the bottom of its pristine home page—and yet, there they were. Somewhere between Silvie's computer and the Bing servers, something was injecting ads into the data passing through the tubes. Were his parents suffering from some kind of ad-serving malware infection? And if so, what else might the malware be watching—or stealing?

Around the same time, computer science PhD student Zack Henkel also returned to his parents' home for a spring break visit. After several hours of traveling, Henkel settled in with his computer to look up the specs for a Mac mini before bedtime. And then he saw the ads. On his personal blog, Henkel described the moment:

But as Apple.com rendered in my browser, I realized I was in for a long night. What I saw was something that would make both designers and computer programmers wince with great displeasure. At the bottom of the carefully designed white and grey webpage, appeared a bright neon green banner advertisement proclaiming: “File For Free Online, H&R Block.” I quickly deduced that either Apple had entered in to the worst cross-promotional deal ever, or my computer was infected with some type of malware. Unfortunately, I would soon discover there was a third possibility, something much worse.

The ads unnerved both Silvie and Henkel, though neither set of parents had really noticed the issue. Silvie's parents "mostly use Facebook and their employers' e-mail," Silvie told me, and both those services use encrypted HTTPS connections—which are much harder to interfere with in transit. His parents probably saw no ads, therefore, and Silvie didn't bring it up because "I didn't want [them] to worry about it or ask me a lot of questions."

Read 30 remaining paragraphs | Comments

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Fish image via Ivelin Radkov

The story of Zite has been a whirlwind. We launched on March 9, 2011, and closed our acquisition by CNN on Aug. 30 of the same year — just under six months later.

But acquisition was not our original plan. We never built the company with the intention of getting acquired. When we launched Zite, we were thrilled to get such a great reception from the press and hundreds of thousands of new users. Our goal was to use that influx of users to secure series A funding to build a team and compete effectively in a crowded market. But fate intervened, and we got an attractive acquisition offer from CNN, a company that believed in our vision. In hindsight, I can see that there were a few really smart things that we did that made us an excellent acquisition target.

My goal for this article isn’t to give you a silver bullet for getting your company acquired, but rather to offer some insight into what I think are the key reasons that Zite was able to move from launch to transaction in such a compressed timeline.

  • Have a huge product launch — It doesn’t matter how good your product is if people don’t know about it. Once we believed we had the right product, we marketed it very hard. We spent much more money on PR surrounding our launch than was fiscally prudent at the time (we were risking future payroll) because we realized that we had one chance to tell the world that Zite was awesome. This paid off in spades: On launch day, we had print articles in The Wall Street Journal and USA Today, plus dozens of other fantastic pieces. This yielded us top billing in the App Store for free applications, and 125,000 downloads in the first week.
  • Put your best foot forward — We focused much of our product design on the first minutes of the user experience. We knew that if a user never saw our amazing personalization technology, we’d lose them, and they’d think we were just a “me-too” news reader. We put our technology front and center by designing a simple, intuitive set-up experience that yielded immediate delight and serendipity.
  • Have technology that is incredibly difficult to replicate — You’re not going to get bought if the acquiring company thinks they can build the product themselves. Zite had the advantage of almost six years of R&D (we were formerly called Worio), but until we became Zite, we were a technology company with a product problem. Instead of continuing to use the technology on a failed product, we pivoted to Zite. We also seized the opportunity to launch on the iPad, which is the perfect delivery device for the technology.
  • Have a clear vision — We had a vision to change the way people consume information. Zite (the product) and personalization are components of that vision, but we proved that we were not a one-trick pony, and we were excited about innovating on news delivery.
  • Disrupt the market — CNN noticed Zite after we received a cease-and-desist from major media companies, including Time Inc. (which is a cousin of CNN, since both are owned by Time Warner). My boss jokes, “If all of the media companies were able to get their lawyers to send you a letter, then you must be doing something right.” At the time, we weren’t sure how we would work with publishers, and publishers weren’t sure of the value of Zite. We’re now on solid ground with publishers, since they have realized the value of Zite as a discovery engine — but at the time it was a great boost to our visibility among the exact same executives who would later give us an offer for the company.

I want to stress that none of the above points are a guarantee that your company will get acquired — let alone be successful — but they certainly influenced CNN’s decision to buy Zite and, ultimately, our success to date. Look for ways you can integrate these tips into your start-up, and even if you aren’t acquired quickly, you will certainly build a better long-term offering for whatever market you choose to address.

Mark Johnson is CEO of Zite. He was an adviser to the company for almost two years, prior to taking the CEO role. He brings a strong product and technology background, with experience at several successful search start-ups: Powerset (natural-language search, acquired by Microsoft), Kosmix (categorized search, acquired by Walmart), and SideStep (travel search, acquired by Kayak). Most recently, he led product at Bing in San Francisco.

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Looking for ways to promote your new company? Let’s face it: Some stunts are better than others. You could rent a hot-air balloon and sail across the New York skyline, but that’s a bit spendy (and possibly dangerous). Some small companies might pass out fliers on street corners, but really, who has the time? Here [...]

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