Rob Meyerson is director of verbal identity at brand consultancy Interbrand.

The Bay area gets a bad rap when it comes to names. No, I’m not talking about your friends’ babies, Namaste and Venture. I’m talking about brand names — especially the names of startups.

Here in San Francisco, Silicon Valley, and the rest of the Bay area, we’re home to plenty of brand names that sound nonsensical at first, but have since become household names: Google, Yahoo, eBay, and Apple. But for every quirky company name we eventually learn to take seriously, there are a handful of local startups whose silly names never seem to reach escape velocity — names that we never warm up to.

Worst-case scenario, these names can be a hindrance to their companies rather than a leg up. Of course, whether or not a company’s name is “good” is partly a matter of opinion. (Doostang, for example, sounds scatological to me — especially inappropriate given it’s “an exclusive career community.”) But some simple guidelines can add a bit of objectivity when looking at brand names. QOOP, a now-defunct “social commerce network” based in Mill Valley, failed the basic test of clear pronunciation (Koop? Kwoop? Co-op?). Weebly, a San Francisco company that lets users create sites “as unique as they are,” suffers from an unfortunately non-unique name — it fails to stand apart from the dozens of other startups with names that end in “ly” (a trend that started with Libya’s country domain). And Pinwheel, now called Findery, had to recover from the hiccup of changing its name early on due to legal availability issues.

But it’s too easy to get negative about names, especially when they’re taken out of context or with the benefit of 20/20 hindsight after a brand has run into trouble. Instead of nitpicking, let’s correct the Bay Area startup scene’s reputation by highlighting some of the great brand names working their way into our collective lexicon every day. Here are a few brand names — new or just in the news — that get their respective companies off on the right foot.

Curious, a Menlo Park startup that just raised $7.5 million in Series A financing, serves up “hundreds of short, video-based lessons for people who want to learn a new skill or rekindle a favorite hobby.” The name is a short, real word, making it easier to pronounce, easier to spell, and easier to remember than a random assortment of letters. It evokes a sense of wonder and discovery, while also speaking directly to the offering’s emotional benefit. Curious is not just about learning. It’s about satisfying your curiosity.

Based in Palo Alto, Datahero “analyzes patterns in your data…[to] help you unmask the answers within.” The name is a straightforward benefit statement: Use our services, and you’ll become a hero to your organization. By using a novel compound word, they’ve created a name that’s easy to remember and hard to confuse, even with other data-related startups like GoodData and DataSift. And by having a little fun with the name (the recently launched site is chock-full of hero-themed vocabulary including a “secret Data Decoder”), they’re already carving out a distinctive brand personality in what could otherwise be a relatively dry category.

Retrace is also based in Palo Alto, and just launched at Disrupt NY. Here’s another real-word name. But unlike Curious, the word “retrace” isn’t used very often, which makes it easier to lay claim to. One of the few places it does show up in everyday speech is in the phrase “retrace your steps” — advice given to those who have forgotten or lost something important. That makes it the perfect word for an app described by its CEO as “the best way to remember and organize everything about the meetings you have.”

Sometimes a straightforward, descriptive name works best. Fremont-based Tactus just released a reference tablet for OEMs demonstrating their product: Tactile Layer. This B2B company needed a name that clearly describes the product, a “tactile user interface for touch-screen devices” with “completely transparent physical buttons that rise up from the touch-screen surface on demand.” (And yes…it looks pretty cool.)

After recently getting acquired by Facebook, Parse, based in San Francisco, can probably no longer be called a startup. But its name will apparently live on beyond the acquisition (at least for now), and it would be a shame to do away with it. An interesting, easy-to-pronounce, one-syllable verb, this name has a double meaning. For laymen, “to parse” means analyzing, understanding, and uncovering deeper meanings. But computers also parse code, making the name more relevant to its intended audience: app developers.

Are these startups guaranteed success because they have good names? Of course not. Obviously, success or failure is more directly determined by other factors, like the company’s leadership team, its competitive set, or the economy within which it operates, all of which are more likely to change, however, than the name. But can a great name get attention, stick in people’s minds, and send the right message? Yes. And does that boost a startup’s chances of success? Absolutely.

Baby image via Babble

As director of verbal identity at Interbrand San Francisco, Rob Meyerson works with business leaders to build identities for their organizations, products, and services.

Adam Miller is CEO of Cornerstone OnDemand.

Remember 1999? Silicon Valley was overflowing with hundreds of millions in venture capital, thousands of dot-com business plans, and foosball tables up and down the San Francisco peninsula. I was about 3,000 miles away, incubating my own startup – a technology company designed to help democratize education by aggregating all of the training content littered across the Web – out of my one-bedroom apartment in Manhattan. At the time, I had zero customers, little funding, and only a group of friends and former colleagues committed to my idea.

Startups are tough, and one cold, rainy day the thought occurred to me that I should move somewhere less expensive (and warmer), since I could really start a company anywhere. But when I shared this idea, my colleagues and advisors said that I really only had two choices: either stay in New York, where they were, or head for Silicon Valley.

So I packed my bags for sunnier climates and headed west, with one minor adjustment: instead of finding a place near Palo Alto, I landed about 400 miles south, in a place better known for beautiful beaches and Hollywood than emerging technology companies. My belief was that LA would be a less expensive place to start a company than New York or Silicon Valley, and finding high-quality business services providers would be less competitive. But more importantly, I believed that a great technology company could not only survive but thrive outside of Silicon Valley.

It turns out to have been a great decision. It’s been almost 14 years, and we’ve been through the dot-com boom and bust, September 11, and the worst economic recession in a century – and I haven’t once considered moving our headquarters out of Santa Monica. We’ve grown from a seed of an idea into a global public company with more than 11 million users around the world, and I’ve got to credit Los Angeles, my neighborhood and my neighbors for much of our success.

Setting down roots in Silicon Beach, before anyone called it that

When I started in LA, nobody called it “Silicon Beach.” Today, LA’s once sleepy tech scene is on fire, with over 500 startups lining its shores and incubators popping up regularly to turn out hungry new entrepreneurs. It makes sense that LA would become the next hotbed of tech talent. Local universities graduate more engineers than anywhere else in America. We’ve got cheaper rents, better weather and more space than our neighbors to the north. And running a cloud company for the last decade has convinced me more than ever that location, in fact, isn’t everything. We may not have the same volume of investment or caliber of success stories as Silicon Valley, but give us some time.

If you are starting a company, there are challenges to turning your back on the obvious choice of location to put down roots in lesser-charted territory. Here are four suggestions on how to succeed outside the Valley:

1. Concentrate on building greatness, not your exit strategy

In the early days, right before the bubble burst, I had flown to San Francisco to meet with AOL after months of working on a deal with them to sponsor their Research & Learn Center. This would have been quite the coup for a bootstrapped business to land such a sought-after contract. At that point in time, AOL was king – they were the ones who decided who won and lost. I was sitting at their boardroom table after months of working on this deal, and they handed me the contract and walked out of the room. I had one hour to sign. AOL was famous for doing this at the time.

I was holding the prize in my hand, but something just didn’t feel right. I put down the pen and walked out. A couple months later, the bubble burst. Had I signed, it would have likely put the company out of business. Instead, I got back on the plane, headed home to LA and didn’t look back. It was one of the hardest decisions of my life at that point. Sometimes instincts play the most vital role that forces you to think about the big picture. We determined very early on that building a strong technology company wasn’t necessarily about how much money you had in the bank or a quick exit. The fact that we bootstrapped the company for the first seven years of existence continues to influence many decisions we make today.

2. Hire for potential, not experience

When I was first building my company more than a decade ago, there were no other enterprise software companies in Santa Monica. There were no other cloud computing companies. We had to teach everyone we hired how to do it. We had to build it ourselves. So we hired for potential instead of prior experience. This forced us to think extremely carefully about our hiring decisions and invest early in folks who had the drive and the long-term vision to get us where we wanted to go.

If you’re not in Silicon Valley or New York, you likely won’t have the same abundance of skills and experience at your disposal. It’s just a question of resources. You’ve either got to scour the local talent landscape for people that have the right attributes or potential for the job, if not the exact experience, or you’ve got to broaden your search and offer the right incentives to folks in other markets who do have the skills to pick up and move.

3. Put yourself out there

It seemed like everyone around me worked in entertainment, so I made a concerted effort to meet other people dealing in tech. It was critical to find people who understood the issues I faced and the decisions that had to be made. Make sure you proactively network in your community and beyond to understand the competition, the landscape and new developments on the horizon. In the Valley, there’s a lot of osmosis going on, and everybody seems to be in the know, so you have to work harder to make those connections elsewhere.

On the flip side, there’s less competition and you’re in a smaller community, so it’s easier to get to know your neighbors better and become an influencer.

4. Surround yourself with the best

One huge challenge when getting started was raising money. Ten years ago, there was extreme resistance for Silicon Valley VCs to invest in LA. At the end of the day, they’d have to get on a plane to attend a board meeting instead of driving down the street. And there are plenty of opportunities to invest right down the street. The bar is set much higher when trying to attract those top investors. Which is why it pays to fight for those big names.

Picking your partners and service providers wisely is essential, because they’re going to become your advisors. Set your bar high and don’t settle for less. It’ll be a struggle for sure, but it’ll make you stronger in the long run.

LA skyline image via Shutterstock

Adam Miller is the founder and CEO of Cornerstone OnDemand, a leading provider of cloud-based talent management solutions. Since starting the company in 1999, Miller has led Cornerstone through over 13 years of consecutive growth and a successful IPO in 2011. Today, it is one of the world’s fastest growing publicly traded SaaS companies, with over 11 million users. In 2011, Miller was honored as an Ernst & Young Entrepreneur of the Year award winner. Miller has a JD from the UCLA School of Law, a MBA from the Anderson School of Business, a BS from the Wharton School, and a BA from the University of Pennsylvania.

This is a guest post by Nikhil Behl, founder and CEO of Zoostores.com and Supplizer.

One of the many challenges a business must face is the decision to buy a pre-packaged solution or to build a customized version that meets the business’s exact specifications.

The latter often requires extraordinary time, money, and human capital resources. In the entrepreneur-friendly environment of today, it can seem like the best option. However, as many former “build your own solution” enthusiasts can attest, it’s often easier said than done.

During my stretch as VP of sales and operations for HPShopping.com, I learned the entire process of building our own solution was not only disruptive to our internal business process, it was also incredibly expensive. Having had that experience, if I were evaluating buying a solution versus building one today as a CEO or CIO, it would be a no-brainer — I would prefer to buy it.

But, before you go rushing down the proverbial shopping aisle, here are a few things to consider and some questions you should ask:

1. Is the solution I want to build a core competency of my business?

I have found that the answer is typically no. Current resources should not be stretched to do something outside of the business core competency or focus. Before deciding if you are equipped to tackle your own solution, first look at what you are trying to build and the resources you have available.

For example, if I am an e-tailer, do I build my own credit-card-processing engine or do I integrate an existing solution from CyberSource or Braintree?

2. Do I have the subject matter and technical expertise to build the solution?

One of the most critical considerations you can make is to determine whether you have enough subject knowledge internally to solve your problem.

Ask yourself: Are you really the expert at this? Can your team identify what solution needs to be built? And it’s not just subject matter experts you need to worry about — it’s also your technical resources. Do you have in-house expertise to utilize the latest technologies and capabilities to effectively build out and maintain the solution? If not, you may need to leverage external expertise to make this happen.

For example, in supply chain automation you need very specific subject matter knowledge. It’s a specific need set and the solution requires standard integration capabilities allowing customers rapid deployment at low to no initial cost.

Do you really need to build this capability in-house and will you have long-term value for it or does it make sense for you to adopt an existing solution built by experts who will continue to invest in it and make it better? Not to mention monitor the solution and make it scale without you worrying about it so you can focus on your core business.

3. Do I have the team to support the solution, as well as provide custom updates in the future?

Not only must you understand what the solution is going to look like today — you also need to know what your future requirements might be. You don’t want to address only your customers’ current needs. You need to find solutions as they evolve. Think about whether you have people available who can both support the solution and provide custom updates down the road as they emerge.

4. What is the total cost of ownership?

As a business, you need to carefully evaluate the total cost of ownership of your solution. Building your own solution means making ongoing internal tradeoffs. It all boils down to whether you are committed to making the sustained investment required in the DIY method or making the upfront investment required to buy the decision.

Part of this equation also relates to scalability. Can you continue to invest in scaling your platform as your business grows, or do you want to leverage a platform provider’s ongoing investment? When you work with a solution provider that has multiple customers, that provider learns from each of them based on each customer’s unique needs and requirements. So, if you end up buying instead of building your solution, you’ll have an insurance policy that your needs will be constantly invested in and updated.

5. Is the time to market faster if I use an existing cloud-based solution?

Though you may have determined from the questions above that you’d prefer to build your own solution, don’t forget time to market, which includes the time to design and architect the solution, build, and test. These steps all take time and if not done correctly result in a poor output.

Ask yourself: Do you have time to build a custom solution, or do you need rapid deployment? If it’s the latter, investigate whether there’s a comparable cloud-based solution that already exists in the marketplace. When there’s a need for speed, it may make more sense to pay for an existing system such as Salesforce for sales force automation or Zendesk for customer service.

6. Can you offer security and the ability to control data?

Security is a key component to the dialogue today for any customer solution. People need to ensure that their sensitive data can be stored securely. A decade ago, I would have advised being wary of cloud solutions, emphasizing the importance of maintaining control. But we’ve come a long way in the last decade, and as SaaS solutions have evolved, security has increased; sometimes they’re more secure than what an internal team can create.

For example, look at credit-card processors. Today, many processors prefer e-tailers integrating with their services, allowing the credit-card data to go directly to the processor, bypassing the e-tailer and their database. That’s because not all e-tailers have the core competency of managing payments and protecting their customers’ data. Likewise, by going with a service provider, your data may actually be safer because you’ll be buying their security capabilities and expertise.

From an adoption standpoint, people are putting fairly sensitive data into cloud solutions. For example, Salesforce is a leader in its space; small businesses are uploading customer data and market information into the cloud. NetSuite runs financial accounting for many companies, including publically traded companies. Finally, Workday houses private HR-related data for thousands of companies in the cloud. This trend reveals a shift in mindset that proves there is a greater comfort in the security of SaaS solutions.

The takeaway

While some of these things may sound simple, they require planning and resources. The devil is in the details. You have to make sure that you’re committed, that you have the capability set, and that you have the right team in order to execute on your plan. Your technical resources need to be strong enough to architect and code the solution, and you need to have the ability to scale it based on your business needs in a timely manner.

If you keep all of this in mind at the front end, then it shouldn’t take a herculean effort to accomplish your goals or require an expensive rebuild to get it right.

With 15 years of e-commerce and technology experience, Nikhil Behl is a successful entrepreneur and the founder and CEO of Supplizer and Zoostores.com. Prior to Zoostores.com, Nikhil spent 12 years at Hewlett-Packard (HP) where he held a number of executive-level positions, including vice president of sales and operations for HPShopping.com. Nikhil is best known for being a part of the founding team that built HPShopping.com and turned it into one of the Top 5 of the IR 500 retailers in just seven years.

Businessman with two roads via ollyy/Shutterstock

I’m a big fan of business networking (and I’ve even written a book about it!), but there’s often a misconception that networking events have to be big business card exchanging bonanzas.

Don’t get me wrong, business cards are a valid way to exchange information, but networking events should be much more than speed dating for your business.

Last week I attended my 54th Nashville Geek Breakfast (or that’s what Wolfram Alpha tells me). Together with new and old friends, we discussed topics such as mobile apps, Twitter, Foursquare, WordPress, co-working, and travel. This was just with the few people at my end of the table. Each breakfast always leaves me energized and excited. It was particularly special because a Geek Breakfast was also taking place in Conway, Arkansas; Tampa, Florida; and Grand Rapids, Michigan. Four Geek Breakfasts across the country on the same day — with people prioritizing bacon over business cards.

What I love about Geek Breakfast is the random networking that occurs with the people you end up seated with. You never know who you will meet or what you will end up talking about. There are no sponsors and no membership fees. Just coffee, bacon, eggs, and fellow fans of all aspects of technology. Originally, I started it as a way to keep attendees of BarCamp Nashville and PodCamp Nashville — the city’s two big, free tech “unconferences” — connected between each annual event.

That said, here’s a few tips I’ve learned for keeping the conversation flowing beyond your business card:

1. Always make new people feel welcome. Ask their name and introduce them to others in the group. Bonus points if you can introduce them to someone who works in their field.
2. Arrive early. Try to be the first to arrive to welcome people as they join you.
3. Read your feeds before you go, so you can be up to date on any technology news to talk about. Bonus points if you are already subscribed to VB.
4. Ask open-ended questions to attendees and listen carefully to the answers. Focus on listening more than speaking.
5. Search your event name or hashtag on Twitter before and after the event. Interact and answer the questions you find.
6. Follow up. This one keeps the conversation flowing after the event. If you met someone you want to get to know better be sure to shoot them an email or give them a call and set up a coffee.

Networking isn’t a bad word. It’s about connecting with like-minded people. Business can certainly come as a result, but even better are the long-lasting friendships that are built from meeting in real life.

Bacon photo via Shutterstock

Dave Delaney is President of Delaney Digital Marketing Consulting in Nashville, TN. He writes frequently about new and traditional methods of business networking at New Networking on his blog. Dave is also the founder of PodCamp Nashville, an annual gathering of people who love digital media and want to share their experiences with the community and  Geek Breakfast, a multi-city tech meetup where locals congregate over bacon, eggs, and plenty of coffee once a month to discuss topics like social media, digital marketing, design, programming, and ways to better their communities. His new book, New Business Networking: How to Effectively Grow Your Business Network Using Online and Offline Methods, comes out in June.

This is a guest post by Elizabeth Smith Kulik, the co-founder and CEO of crowdfunding incubator ProHatch.

Crowdfunding has once again become a hot topic in the financial world, given the recent one-year anniversary of the JOBS Act on April 5. The JOBS Act legalized equity- and debt-based crowdfunding in the U.S. However the SEC has missed congressionally mandated deadlines to complete the rulemaking process to the detriment of capital-seeking entrepreneurs.

While the parts of the JOBS Act that legalized equity crowdfunding for accredited and unaccredited investors may not be implemented until late this year, the crowdfunding movement has seen explosive growth.

The entire crowdfunding market grew by 81 percent last year, funding more than one million campaigns, according to Massolution, which recently issued its crowdfunding report for 2012. Western countries accounted for approximately 95 percent of the total market. Carl Esposti, CEO of Massolution, says that he expects the crowdfunding market to nearly double again in 2013.

If anything, these figures demonstrate that communities around the country (and around the world) are hungry to support and contribute to issues and organizations important to them. Everything from film and TV projects to natural disaster relief has been funded with the help of the crowd.

No one can now plausibly deny that crowdfunding (be it equity-, donations-, or rewards-based) is not filling a crucial gap in capital formation for businesses, social impact, and communities. The fact that entrepreneurs are finding it more difficult than ever to raise funding, which the JOBS Act was designed to address, is perhaps one of the motivating factors behind not one, but two separate hearings about Titles II and III provision delays in the House of Representatives in April.

The House Small Business Committee quizzed SEC officials on the delay, where witnesses stated that while they did not have a firm date set for completing the process. It was understood to be a top priority by both Congress and the new SEC chairwoman, Mary Jo White. Another hearing followed in the House Oversight Subcommittee regarding Title II, featuring SEC Commissioner Elisse Walter. These are encouraging developments.

So while there may be more political battles to come on the domestic front, crowdfunding is booming, and enterprising small businesses and nonprofits can still leverage their social networks to fund today’s most pressing causes and tomorrow’s most innovative ideas with donation and rewards campaigns. Investor protection and fraud prevention are top priorities not only for regulators, but for those of us deeply involved in the industry.

In addition to significant measures taken by the majority of legitimate crowdfunding portals to implement industry best practices and accreditation, my own company and others have their own vetting standards and procedures. And let’s not forget the crowd itself: part of the beauty of crowdfunding is bringing those who understand an idea, a company or an industry together to air any and all concerns to other would-be investors.

Even though the JOBS Act anniversary has come and gone, I’m not at all disappointed with the state of things as they are. Although a solid regulatory framework that protects entrepreneurs and investors will take time, with crowdfunding gaining so much attention and traction around the world, there is even more reason to be optimistic about the future of social enterprise and community-supported initiatives.

Elizabeth Smith Kulik is the co-founder and CEO of ProHatch, a crowdfunding incubator that offers best-in-class business and social advisory services, and partners with entrepreneurs, start-ups, SMBs and communities to optimize their crowdfunding goals. She has created and executed development, acquisitions, dispositions, repositioning, and growth strategies for more than $75 billion of institutional operating company and real-estate investments.

Tyler Muse is founder of LingoLive.

Hours after April Fool’s day, LiveMocha CEO Michael Schutzler announced that his company was being acquired by the behemoth he had battled for five years: Rosetta Stone.

There are 5 reasons why you should be skeptical this acquisition will save Rosetta Stone, which has been running in the red for the last few years.

1) It’s all about mobile

LiveMocha does not have an app. Their users have been begging for it. Competitive language learning apps have nailed design and usability for a fraction of the cost, including Duolingo, a free app that is enjoying rave reviews and even beating Rosetta Stone at their own game.

2) Rosetta Stone and LiveMocha have entirely different users, pricing and acquisition channels

LiveMocha provides a freemium model which allows users to connect with other native learners in the hopes they can upsell them on the site’s premium materials (at ~$99). The problem was simple: they gave too much away for free.

Rosetta Stone puts a large price stamp (~$300) on their shiny yellow boxes of CD-ROM’s (yes you are reading this thirteen years into the 21st century). The company spends well over $100 million per year “selling the dream” and maximizing on the buyer’s point of least resistance, a concept LiveMocha never seemed to grasp. They’ve also excelled at landing governmental contracts and institutional sales. All this despite what people have to say about their product (more on that next).

Unfortunately, neither strategy is moving the needle: privately-held LiveMocha sold to Rosetta Stone for about half of what they raised in capital over their 5 years of existence. Former LiveMocha product and marketing executive Clint Schmidt gave me an interesting perspective from the lens of venture capital, telling me this is a “good deal for LiveMocha investors. They made a bet on the executive team and on a thesis that didn’t bear fruit. Getting half your money back in those circumstances is not a bad outcome. But I’m not sure that RST shareholders should attribute much upside to this.”

RST has been running in the red over the last few years. A former president at Rosetta Stone told me this week that the deal doesn’t compromise RST’s two biggest strengths, their breadth of languages (34 total) and brand awareness, yet brings them an active community of language learners that are integrally linked to social media. However, rumblings in the online community indicate that these users won’t stick around for what RST has to offer.

3) Rosetta Stone needs credibility in the online community

Users can easily be informed not only of Rosetta Stone’s shortcomings but also of the countless lower cost and/or free competitors. Today’s buyer only needs to type “rosetta stone review” in Google and watch the red flags flood their screen. As more informed buyers slide increasingly into Rosetta Stone’s demographic “strike zone” (affluent 30-50 year olds), the company’s ability to execute the sale at the buyer’s point of least resistance will crumble.

4) LiveMocha doesn’t provide the missing piece that will make Rosetta Stone’s product more effective

LiveMocha doesn’t bring a lot of credibility beyond being an easy way to connect with other native speakers (and not infuriating people with their price tag). The problem is these natives aren’t teachers so they won’t have the patience or skill to teach you how to speak their language. As Tim Ferriss points out, native English speakers suck at teaching English; it’s merely second nature to them.

So what ends up happening? It’s likely the buyer will just take up a class at the local community college, or meet with a low-cost tutor at a coffee shop. Even more likely is that they’ll just drop the dream altogether rather than “wasting their time and money.” I put this in quotes because I talk to these people every single day… which leads us to our last and most important point.

5) LiveMocha doesn’t meet the single biggest need identified by today’s paying language learners

We’ve interviewed hundreds of language learners, from middle-aged parents to college students and corporate employees alike, and have listened closely to the one consistent, resounding piece of feedback: “I want to learn from a native”. Learn from a native, that’s a pretty simple concept.

Rosetta Stone’s TOTALe platform offers the ability to meet with a live teacher in a group class, only after you’ve progressed past a certain point in their software (long after most users have given up). As for LiveMocha, the site’s native tutors are prohibitively expensive (~$40 per hour) and are provided through a European company called Learnissimo, thereby marginalizing the number one desire of most language learners. Why can’t learning from a native be convenient and personalized without costing an arm-and-a-leg?

Rosetta Stone’s $8.5 million price tag for LiveMocha, while paltry, would have been better spent developing a more robust platform for one-on-one instruction from native teachers.

Translation image via Shutterstock

Tyler Muse is founder of LingoLive and blogs at lingolive.wordpress.com. You can find him on Twitter (@tylermuse) and LinkedIn.

This is a guest post by Chris Crowell, president and CEO of Enterasys.

The rate at which doctors are choosing to bring mobile devices to work continues to rise at an alarming rate. In fact, a recent study from Jackson & Coker found that four out of five physicians regularly use their mobile devices for medical purposes.

At the same time, patients and guests are also increasing their use of personal wireless devices in hospitals and healthcare facilities. While there are proven benefits in these situations, such as quicker access to patient records, the influx of devices also has some serious drawbacks.

Most often, those looking at the negatives are quick to point out patient privacy issues and the fact that patient information could be jeopardized. But a host of other concerns are also associated with this movement, such as the enormous burden it puts on the network and IT resources.

To help alleviate the side effects from the transition to mobile, hospital IT organizations across the globe are beginning to deploy bring-your-own-device (BYOD) strategies. In order to provide the flexible resources required to manage a comprehensive BYOD strategy that maintains costs, control, and security, IT must be prepared to face the following five issues head on.

Network support

A recent report from Spyglass Consulting Group found that 69 percent of surveyed hospital nurses use smartphones for personal and clinical communications while on the job. That, added to the statistic above about physicians, equals a huge strain on the hospital’s network.

With the influx of end-user devices accessing the hospital network comes the demand for consistent, reliable, and continuously available connectivity, especially on the hospital wireless LAN. Federal standards call for institutions to deploy a single network to handle the needs of the medical devices as well as provide a standard of interoperability for securing all data on the clinical wireless LAN. Moving forward, hospital IT professionals must explore next-generation networking solutions that are highly available, scalable, and ubiquitous.

Lost devices

If you work for a company where you’re given a mobile device, the assumption is that IT bears the responsibility for the tracking and replacement of those that go missing. Healthcare organizations must rethink this traditional model as more devices brought into the workplace are personally, not company, owned.

Mobile device management (MDM) of personal devices is something that has historically kept health IT professionals up, yet most are only doing the bare minimum at best to control it. There must be a balance in strategy that takes into account the need to be noninvasive, yet law abiding. When dealing with patient information, anything that contains data covered by HIPAA needs to be secured, and those devices need to be able to be wiped clean.

Mixing personal and professional use of mobile devices

In the near future, mobile computing devices in clinical environments will be just as common as they are in real life. Those devices will serve a dual purpose, as doctors and other professionals use the same mobile phone to call/text home as they do to access patient information.

We’re already hearing concerns from clinicians about BYOD around the loss of privacy for personal communications, the idea that personal devices may compromise professional behavior, and the concern that procedures may not be clear around professional vs. personal use on personal devices. BYOD in this environment requires a shift in culture that revolves around transparency. Without it, policy-makers and users will butt heads and neither side will achieve what they’re after.

Application deployment

Currently, there are more than 20,000 mHealth applications in the marketplace, and that number is growing across all mobile platforms. Most hospitals are using application layer firewall and unified threat management in order to deploy and monitor applications safely and securely, and remain in compliance with HIPAA.

These strategies have proved to be beneficial when it comes to personally owned devices. However, they also raise concerns about performance degradation and scalability. Deploying and supporting diverse applications can be troublesome, especially with the magnitude of devices involved. IT and the mobile workforce must have the same goal in mind — patient safety and protection. From there, they can put clear policies in place.

Ruggedized devices

Hospitals are not the safest place for a mobile device. There are fluids and other harsh operating conditions that can be challenging. The conditions are drastically different from those of a standard office. At the same time, it’s unlikely that clinicians have the safeguards in place to protect their devices from cross-contamination from hospital to hospital.

The question is, should the responsibility of the sanitation and hardening of the personal device fall on IT, or should the clinician assume responsibility when deciding to use their own device in the treatment of patients? This factor cannot be ignored when deploying a BYOD strategy.

Final thoughts

BYOD isn’t a passing fad. It’s here to stay, and organizations need to establish strategies and best practices to handle this ever-changing landscape. The organizations that successfully deploy BYOD initiatives have the ability to transform clinical workflows, streamline processes, improve physician access to information, and improve overall patient care.

Chris Crowell is President and CEO of Enterasys. He works with several healthcare organizations looking to expand WiFi for BYOD. Some notable customers include Henry Ford Health System and Western Maryland Health System.

Doctor using tablet via rangizzz/Shutterstock

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This is a guest post by Oisin Hanrahan, the CEO and co-founder of Handybook, a two-sided marketplace for cleaners, plumbers, and handymen.

Ask a smart investor how they feel about starting a two-sided marketplace, and you’ll likely here the same response: “It’s difficult — maybe impossible.” And they’re right. Two-sided markets, or economic platforms that have two distinct user groups that rely on one another for goods and services, are hard to develop and even more difficult to maintain.

Since co-founding Handybook in January 2012, and a few years prior when I co-founded The Undergraduate Awards, I’ve learned that getting two sides of a market together requires an initial (preferably face-to-face) spark, followed by a unique combination of hack and hustle.

One element of launching a successful two-sided marketplace that is often overlooked is the initial spark, or the little drop of supply and tiny inkling of demand you need to kick your whole idea off into a successful market. There is an over-reliance on using technology to secure these wonderful drips of interest that will eventually turn into the transactions responsible for driving your business.

As a serial entrepreneur, I know we tend to focus too much time on changing increasingly small parts of our product or marketing material, and too much effort on finding ways to scrape listings in the hope that it will somehow negate the need to get out there and just find the right supply. It’s the same as a salesman who thinks that by finding more creative ways to organize his or her files and present materials, it will somehow make the need to do fifty cold calls a day disappear, only to find it won’t — the cold calls still need to be made.

It’s the same with sparking a two-sided market. Technology won’t spark your market. You can scrape listings and figure out clever ways to pull content from other platforms when you’re trying to grow and scale, but you shouldn’t be dependent on these things for multiple transactions. You need something to spark your supply long-term. The right technology and hacks will facilitate growth and scale but it won’t provide that initial spark you need to amplify your supply. You need quality, real-world people who are willing to hustle, both online and in the real world.

When we were first working to develop a scalable two-sided market, it meant going out and scouring to find our initial supply of home professionals. It meant meeting local home cleaning companies and local handymen. It meant spending lots of time in Starbucks buying coffee for maids and asking them who was the best maid they knew and how they cleaned ovens. (I even learned to clean an oven.) It meant meeting local handymen and conversing about the single job they were most proud of.

When Paddy Cosgrave and I launched The Undergraduate Awards, hustle meant we trekked from Dublin to New York to San Francisco and spent time with university presidents, student groups, and professors to explain the value of a global awards program to get our first couple hundred entrants. The tactical way founders of Airbnb, an online community site for finding places to stay, met hosts and photographed spaces to rent in order to build a strong two-sided marketplace. Airbnb’s tactics have since become legendary amongst entrepreneurs.

Is it possible to find this initial spark online? Maybe, but you miss out on so much rich information on the supply side of your market place. If you meet people in person they’ll tell you what they think they want, and from that you can try and infer what they actually think. If you don’t meet them, you’ll miss out on what they think about the other side of your market. But most importantly, by seeking your supply solely online means you compromise quality of your supply, and your future supply will become copies of your current supply. All other things equal, if your current supply is below average then your future supply is destined to be much worse. The bottom line is that you need to find the very best initial supply to seed your marketplace to fuel optimal growth and scalability.

Sparking the right supply on a two-sided market requires an act of magic, as many who have walked the walk can attest. It requires convincing the best supply possible that you will soon have demand and that the initial time-cost of the sign-up and on-boarding process will be well worth it. Then within this tiny window when you have both interest and mind share of quality supply, you need to convince some customers to engage.

A number of startups have successfully launched and maintained two-sided marketplaces, and the ones who took these smart steps from the beginning are seeing the most success now. You can’t start a fire without a spark — and you can’t spark the right supply without hustle.

Oisin Hanrahan is the co-Founder and CEO of Handybook, an online platform for booking household services. Prior to founding Handybook, Oisin founded MiCandidate, a service that provided real-time political content to media companies in 25 European countries. MiCandidate was acquired in 2009. He also founded Clearwater Group, a real-estate-development business in Budapest, Hungary.

Coffee meeting image via LANTERIA/Shutterstock

This is guest post by Francisco Diaz-Mitoma Jr., the CEO of VIRURL.

During the past few months, digital ad companies have been forced to take a hard look in the mirror. Reports from several security companies have pegged that online advertising click fraud is costing advertisers more than $6 million per month. And that’s on the low side when you compare it to other reports that Google’s bot traffic consumes over $1 billion per year.

Click fraud has been around since the beginning

Wherever there is an opportunity to make money, bad actors and click fraudsters are bound to appear. The problem is so big and costs the economy so much that click fraud is actually a felony offense in the United States.

It’s been around a long while.

In 2004, a computer software engineer developed click-fraud software and tried extorting Google unless they paid $150,000, according to the indictment.

In 2009, Facebook — which mostly generates revenues from online advertising — admitted in 2009 that malicious fraudulent clicks had affected their network.

A recent study conducted by London-based Spider.io dismantled a botnet of over 120,000 machines dubbed “The Chameleon.” The botnet would try to mimic human traffic by creating rollovers on banner ads and in some cases click on the banner ads. The botnet is estimated to have cost advertisers (many of them Fortune 100 companies) more than $6 million a month.

Click fraud is an issue that continuously drains the advertising economy and rewards malicious black-hat scammers. There is no single solution to stopping click fraud but there are multiple ways to protect advertising dollars from being wasted.

Time to take action

The surge in startups around marketing metrics helps to alleviate some of the click-fraud problems online. If you are spending more than a few hundred dollars on any advertising platform each month, it could be a wise investment to hire a freelancer or company to help you through the process.

There are two main strategies to battle click spam and click fraud:

1. Technical: Crosscheck server logs and IP information with known blacklists, proxy lists, and spam lists. For example, Project Honey Pot helps coordinate efforts between domain owners to flag potentially malicious IPs. Again, this is not ironclad protection but may prove beneficial.

2. Analytical: Use your analytics and monitor your success metrics closely. Look at patterns with the traffic to assess whether it is human traffic. Do not obsess over click-through rates. Instead, rank your paid advertising channels by return on investment and then prioritize your spending based on that list. If the traffic peaks and your conversion rates do not hold up, it would be a good idea to cut that paid advertising channel off.

Startups like Kissmetrics, Chartbeat, and Kontagent are paving the way for a better understanding on what your traffic is doing once it reaches a webpage. Services like these help you cut your losses faster from a fraudulent traffic source by allowing you to monitor particular events generated from you traffic. Not only do these services catch bad traffic, but they also help you better understand which paid advertising channels are working best for you.

Better understanding your traffic, monitoring peaks and performance, and tapping into existing blacklists are good safeguards to prevent a massive hemorrhage from your advertising budget.

Brands, agencies, and ad networks must stand together

Click-fraud bots have a severe effect on the economics of online advertising. As CPM numbers are driven up by click bots, the real click becomes more expensive. Even if click bots are tailored to click through on ads, the actual spending customer becomes more expensive to acquire.

Problems with click fraud at major sites points to an industry-wide problem that needs immediate attention. The online advertising industry needs to continue to work together and collaborate on a shared database of perpetrators.

This hard look in the mirror is creating startups and an entire industry around click fraud, better marketing metrics, and real-time behavioral monitoring. This concerted effort will pour millions back into the advertising industry, making advertising more efficient and creating more advertisers willing to open up their wallet.

In the end, it is not only an advertising industry issue. Combating click fraud helps anyone who consumes content online. More real clicks on advertisements will also recalibrate traditional banner ads — making them more efficient and less annoying.

Francisco Diaz-Mitoma Jr. is the co-founder and CEO of VIRURL. VIRURL is a paid content distribution platform with over 115,000 influencers and publishers. VIRURL helps small and large content creators find the right audience.

Silhouetted image of someone typing on laptop via maradonna 8888/Shutterstock

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

This is a guest post by Cimarron Buser, vice president of business development at Apperian.

Many companies have begun to embrace the concept of “Bring Your Own Device” (BYOD). This starts with the agreement that your company’s email, calendar, and contacts can be used on an employee’s personal device and you may reimburse the employee via a stipend. But this is the easy part.

The challenge begins when companies want to move business processes to mobile apps or enable the sharing of corporate data out to a mobile end-point. Now, security issues take a sharper focus, and the mobile device management (MDM) solution that might have been installed a few years ago that allowed IT to check off the box for compliance is not enough. Device wipe and restricting users to specific apps doesn’t work.

So, how do businesses provide real, usable, and fun (yes, fun is important) apps to employees while securing corporate data? There are many solutions pitched today, and while each approach offers benefits there is probably no “one size fits all” approach as new technology evolves.

The latest approach to gain buzz is “dual personality,” which can be seen in the recent BlackBerry announcements, and will be launched soon by Samsung with its KNOX initiative. VMWare, Enterproid, and others have solutions in the market, but the trend towards building in the dual persona into the hardware stack and OS is likely going to raise the stakes.

The challenge for these systems lies in the heterogeneous nature of mobile: you can’t expect every employee and user to use the same hardware or OS. Another challenge is that the dual personality model chafes against the user who has been conditioned (let’s just say “iPhoned”) to a simple, elegant model where all apps run seamlessly together in the same environment. The user never has to remember which mode they are in, and sending mail or making calendar appointments just work.

If the jury is out (both in terms of market adoption and technology approach) on the dual personality solution, what else can a business do? Another approach is to treat each app and its data as an individual, secure “container,” thus making sure that personal and business apps and data are separate. However, from the user viewpoint, the apps are easily accessible and the experience is familiar. There are several ways to do this, but the most prevalent is “app wrapping” where policies such as authentication, copy-and-paste restrictions, integrated VPNs, and data-at-rest encryption can be applied to any app with the click of a check box.

Adding to the fun is that beyond iOS and Android (still the dominant platforms when it comes to the new enterprise app ecosystem), we will see BlackBerry and Windows Phone entering the fray. Any solution that needs to be applied to all your company devices needs to play well across the board. This is an additional challenge to the dual persona model, where unless everyone is using the same technology it may not be feasible to have universal policies, and training and support costs increase. We sometimes forget why we’re all building apps for employees in the first place. It’s all about employee productivity, convenience, and ultimately ROI for the business.

Apps — and their security model — should be easy to use. User engagement should be encouraged, and include consumer-like features such as app rating, comments, crowd-sourcing for new ideas, and even the (future) ability to build your own app with corporate data. Ultimately, security issues should be handled in a way which is seamless and based on user roles.

We still need to deal with lost devices or the circumstances when an employee leaves the company. However, security policy must be combined with employee education and forward-thinking companies make sure employees buy into the solutions, and not try to do workarounds to get their jobs done because no solution is offered.

Businesses have a great opportunity today to make all their employees more effective with these fancy gadgets, and industry leaders have already seen multi-million dollar ROIs on mobility investments.

The good news is that enterprise mobility works.

Cimarron Buser leads Apperian’s products and marketing for enterprise solutions. He has worked in technology for over 20 years, providing creative and visionary leadership for products and services in the technology, web and mobile arena.

Businessman using tablet via ollyy/Shutterstock

The information contained in this article should not be construed as legal advice.

The third and final wave of provisions of the America Invents Act (AIA) will become effective on March 16, 2013, completing the overhaul of United States patent law that began with enactment of the AIA on September 16, 2011. These provisions will move the United States to a first-to-file system, greatly expand the definition of prior art and usher in the use of post grant review.

First-to-File

Beginning in mid-March, the United States Patent Office (Patent Office) will use a first-to-file system rather than the first-to-invent system that is currently in place. This means inventors will no longer be able to “swear behind” the date that they first conceived of their invention. Rather, priority will be determined by the patent application’s effective filing date — the date the application was filed or the filing date of the earliest application for which the application can claim priority. As a result, once the AIA takes full effect on March 16, 2013, speed to the Patent Office will be paramount, and clients will likely need to file patent applications earlier and may need to file follow-on applications more often than their current procedures require.

One way to avoid the AIA is to claim priority to an application filed before March 16. Non-provisional applications filed on or after March 16 will remain under current law if they claim priority to an application that was filed before March 16 and contain the same material as that prior application. If the non-provisional application filed on or after March 16 includes new material, it will be subject to the AIA and its first-to-file system, expanded prior art provisions and other procedures.

For private venture-backed companies, this will mean that they may need to spend money on patents, the patent process and the development of patent strategies earlier and more often than what is typical in the first-to-invent system.

Expansion of Available Prior Art

Under the AIA, prior art is defined as any invention that was patented, described in a printed publication, in public use or on sale or otherwise available to the public before the effective filing date of the patent application. There are no geographic requirements for prior art, thus, for applications filed on or after March 16, prior art can come from anywhere in the world and be in any language. Even more expansive is the catch-all phrase “otherwise available to the public,” which inserts a great deal of uncertainty as to how it will be interpreted.

There is a very narrow exception for disclosures that are made within one year of the effective filing date by the inventor or an individual who derived his/
her invention from the inventor’s disclosure. However, this exception should not be relied upon due to, for example, the uncertainty surrounding interpretation of “derive” and the difficulty one is likely to encounter when trying to prove derivation.

Post Grant Review

Anyone who has not first initiated a civil action will be able to challenge a patent filed after March 16 through post-grant review. In order for review to be granted, the petitioner must request review within nine months after the patent is granted and demonstrate that it is more likely than not that one of the patent’s claims is unpatentable.

The combination of the expansion of available prior art and post-grant review means that obtaining a patent for an application filed on or after March 16 will likely be much more difficult than under current law. On the other hand, petitioners will be estopped from bringing a civil action or proceeding in the Patent Office on any ground that was raised or reasonably could have been raised during the postgrant review.

Takeaways and Recommendations

• Avoid the expanded prior art provisions and the uncertainty of the new AIA procedures by ensuring that the company’s patent is subject to the current first-to-invent rules.
  • For inventions that have early invention dates, file patents before March 16.

• Prioritize applications that have conception dates prior to September 16, 2012 (the date the first wave of AIA provisions became effective).
  • Consider providing as much detail as possible in any provisional applications that the company intends to file before March 16.
  • Before March 16, file applications that add new material to previously filed applications.
  • For child applications filed on or after March 16, consider filing two applications, with one application containing the most well-supported claims, in order to maximize the company’s ability to maintain pre-March 16 priority.

• Consider revising internal policies and procedures to account for the new prior art provisions.
  • Evaluate the company’s policies regarding prior approval of public disclosures to ensure that the company will not need to rely on the one-year exception. This includes policies regarding publications, conferences, press releases and social media. If the company does not currently have such policies, consider putting them in place.
  • Evaluate the company’s procedures for developing and patenting new technology. Updated timelines may be necessary to enable the company to be the first to file. Consider filing follow-on provisional applications for all important developments in order to secure earlier effective filing dates.

Endnotes

1 35 U.S.C. § 102(a), as amended.
2 35 U.S.C. § 100(i), as amended.
3 35 U.S.C. § 102(a), as amended.
4 35 U.S.C. § 102(b), as amended.
5 35 U.S.C. § 325(a)(1).
6 35 U.S.C. §§ 321(c), 324(a).
7 35 U.S.C. §325(e).

Invention image via VLADGRIN/Shutterstock

Richard G. Frenkel: Rick Frenkel is a litigation partner in the Silicon Valley office of Latham & Watkins. He has experience in every aspect of patent litigation, from initial investigations through trial and appeals. Prior to joining Latham, Mr. Frenkel served as the Director of Intellectual Property for Consumer and Emerging Technologies at Cisco Systems.

Shoney H. Blake: Shoney Blake is an associate in the Silicon Valley office of Latham & Watkins. Ms. Blake received her JD in 2009 from the University of Chicago School of Law. In 2006, she received her BA in International Relations from Stanford University.

This is a guest post by Jason Cavnar, the co-founder and CEO of Singly.

Over the holidays, I looked around the living room and saw eight adults over 55 sending text messages, having video conversations with loved ones in other cities, and showing each other the new apps they use.

In our living rooms, at the office, in our classrooms, in our cars, and in our pockets, innovation in software has radically changed the world we know. With this has come a shift in what society celebrates and what we value in the technology world. “Geek” is definitely the new cool.

Do you know what is cool?

Consider that across the world, founders like Mark Zuckerberg, Jack Dorsey, and Kevin Systrom grace magazine covers and television programs as we celebrate their meteoric wealth creation and unique command of the PR machine.

At the employee level, a growing percentage of Silicon Valley engineers are exploiting a red-hot labor market by jumping startup to startup or cashing in on comfortable jobs in large companies that are overpaying to retain workers. Far too many of them are happy to be peddled by recruiters who exacerbate their god-state with terms like “rock stars”, “unicorns,” and “ninjas”. Just as astounding, some are even willing to be auctioned off.

This trend has been evident during interactions I’ve had with many developers during the past year. Many are quick to equate “cool” with wealth, comfort, public recognition, or a combination thereof. They seem far too happy to become a commoditized resource with little regard for their potential to shape the future or ability to take action on issues that truly motivate them.

I am concerned that as we head further down the path of Bravo reality shows, developer-trafficking websites, and tech press coverage that reads more like a tabloid than an industry, we’re perpetuating a false narrative about what motivates technical innovators and what true technical innovation can and ought to be. Fortunately, another class of developer is on the rise, even if they’re not on the cover of Time magazine.

Are you a maker or taker?

For the purposes of this article, I would like to call the class of developers I have described thus far as “takers.” Distinct and separate from them is a developer who is more self-actualized — a “maker.”

Just as Maslow’s Hierarchy would suggest, a maker’s work is characterized by morality, creativity, craftsmanship, and purposed problem solving. They view their work through the lens of service –- what MLK Jr. referred to as “creative altruism.”

Makers don’t need to be valued at the highest end of the market. They don’t need the micro-fame of tech blogs. They don’t aspire to be “acqui-hired.” They don’t ask questions about optimizing their paycheck, their communal fame, or their personal brand. And they don’t need good pick up lines (or apps) at the bar.

Makers choose their work based on impact and happiness. They recognize the truths in the work of people like Daniel Pink and Simon Sinek — that income does not generate happiness or enjoyment, nor alleviate sadness or stress. They concern themselves with doing work that is important. With thinking about what moves society forward. With jobs and startups and weekend hacking and open-source contributions to things that have a real-world impact. They introduce and push fundamentally new technologies.

Makers on the rise

If you look past the noise and the hype, you will find some interesting examples of makers at work:

• The day-to-day altruistic exchange of code is expanding thanks to the sharing mechanics of GitHub.
• Crowd-funding platforms like Indigogo and Kickstarter are empowering people to eschew artificial expectations of investors, or overpaid but underfulfilled jobs and get more runway on more innovative products, based on the merit of their ideas.
• Change.org is giving voice and agency to people who previously would be drowned out in quests for social justice.
• The Arduino, MakerBot, and Drone hacker communities are burgeoning.
• The team at Oblong is re-thinking the way humans interact with computers.
• Sifteo is re-inspiring play that fuels children’s social and cognitive growth.
• Silent Circle’s app is democratizing encrypted file and message sharing.
• Heroic individuals like Ivan Owen in Bellingham, Wash. and Richard Van As in South Africa are teaming up to tackle projects like building robotic hands to help children.
• CodeForAmerica is attracting great talent to play a role in modernizing democracy and data.
• Entrepreneurs like Scott Harrison (Charity:Water) are building purpose-driven startups that attract makers in droves by offering an opportunity for self-actualized work.
• Paul Graham and Y Combinator have also entered the mix by recently funding their first impact investment, Watsi which helps people crowd-fund medical treatment.

The tide is rising for this community of makers, and this work is having a real impact across the world. But we still need more of it.

A Call to arms

A recent study suggests that more than 70 percent of college students and 50 percent of workers are looking for jobs with social impact. Imagine if the narrative for the technology industry focused on makers, not on takers, what types of things they would easily identify and join.

And it’s not just the press who need to make room for more coverage of the bigger, more important work going on.

Investors need to step up and fund more makers instead of adoringly trying to fashion investments to match the patterns of yesterday’s successes, spraying and praying and looking for quick wins.

Our engineering schools need to consider not only teaching students how to do the work, but to think critically about what work ought to be done. We need to be raising passionate problem solvers, not just overpaid laborers.

Finally — we need more developers to take a step back and consider why they are doing what they are doing.

As Jeff Hammerbacher famously put it when he left Facebook to co-found Cloudera:

“The best minds of my generation are thinking about how to make people click ads. That sucks.”

And Alex Payne on why he left Twitter:

“The call for a decentralized Twitter speaks to deeper motives than profit: good engineering and social justice….it’s an architecture that would resist censorship and the corrupting influences of capital and marketing … (that would make) tweeting as fundamental and irrevocable a part of the Internet as email.”

I don’t know Alex or Jeff. But I admire them. And I think secretly, many developers out there do. They took a step back and asked why they were doing what they are doing and who they were working for. And they chose bigger, more creative problems to pursue with their time and talent.

Important problems looking for important choices

We face, as a society, incredible challenges in the coming decades: balancing social justices like healthcare with a disappearing middle class to pay for it; competing in a global market; generating better energy solutions; ensuring clean water access for large populations; solving health issues that shorten life; moving our planet towards a more sustainable environment; creating organizations and systems of management more in harmony with the human spirit; and many more.

These are all issues that countless entrepreneurs and social enterprises are waking up and thinking about. And they have solutions rooted in critical problem solving and accelerated through software.

On the surface, they seem daunting. They don’t currently receive the limelight. And, sure, they might not pay as well as “making people click ads”. But in them is fertile soil that presents the opportunity for a higher purpose, an existence greater than big salaries and social status: the opportunity to use your talents to shape the world we ought to create. And one could even argue, the prospects for larger long-term gains.

If you’re an engineer, what choice are you making? Are you are just a developer? Or a self-actualized maker?

If you’re an investor, press member, founder, engineering school leader, and influential incubator, what role are you playing in history?

How we answer this question — individually and collectively — will make a huge difference in the overriding narrative of our time and industry. And ultimately in the type of future we experience.

Here’s to the makers.

Jason Cavnar is the co-founder and CEO of Singly, founded in 2011 as the app connection platform empowering a new league of extraordinary developers. Prior to Singly, Jason contributed to the development of a number of innovative projects at social reader and search engine company, Nsyght. Additionally, Jason has over 9 years of experience in entrepreneurial environments, leading and advising companies ranging from large family offices and funds, to healthcare clients to technology startups.

Man with his good and bad conscience via Shutterstock

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Todd Rumberger is a corporate partner with Foley & Lardner LLP and is VentureBeat’s corporate counsel. 

Early-stage companies that have plenty of engineering talent but insufficient investment capital to keep going continue to find opportunities to monetize their talent pool and early efforts by selling to a cash-rich larger technology company. Smaller “acqui-hire” deals (perhaps less than $10 million) are often viewed as no more than veiled, albeit rich, sign-on packages for scarce top-tier talent; larger deals, however, made as part of a “buy vs. build” strategy, allow the larger company to pick up not only a proven team but a product that may fit nicely or even critically into its product development plan.

But whether, just ‘team” or “team and technology,” many acquisition deals fail to close. A number of factors can play into a failed exit deal, but here are the five most common deal-killers I’ve witnessed for startup teams. For the purposes of this article, I have focused my summary primarily on the larger team and technology deals:

1) An important constituency — founders, key employees (i.e., key engineers), or investors — does not support the ‘early’ exit plan.

The critical first question to answer in this regard: Are your key developers/technologists or other key co-founders prepared to continue to work with the technology, the business, and, most critically, the acquirer post-acquisition? Where early-stage exits are involved, the acquirer typically views inventors/developers/visionaries of the acquired company’s technology as a “must have.”

2) The company’s ‘IP house’ is not in order.

In other words, the company has done a poor job in one or more of a number of critical areas relating to its intellectual property, or worse, does not have rights to the IP it is using in its products. At founding, the company should have valid and vetted assignments of any technology the founders are “contributing” to the startup. Signed agreements assigning IP thereafter created in the course of work for the company should be secured from all existing and former founders and employees (e.g., invention assignments and confidentiality agreements). Your team must also obtain similar agreements from independent contractors (the language should be in the consulting or development agreement); without specific assignment language, the contractor typically keeps most IP rights. It’s also critical to maintain a record of consistent use of non-disclosure/confidentiality agreements with third parties to protect the company’s trade secrets, which for many technology companies, is software code.

Best case: There is nothing to disclose to the acquirer about your company’s IP representations or, if there is something to disclose, a thoughtful explanation is provided.

Worst case: During due diligence, the acquirer discovers significant problems that the company was not even aware of.

For many Internet and mobile companies where the technology is code, it is unlikely that patents will have been pursued or, if filed, have progressed very far or are attributed much value at any early-stage exit. So most early-stage companies will rely primarily on trade secret and copyright protection for their IP. For this reason, an acquirer will want well-documented software code that can be integrated with the acquirer’s own technology and understood by the acquirer’s technology team. The acquirer will expect the company’s developers to have tracked and complied with inbound IP licenses (open source, freeware, “copyleft,” off the shelf, and so forth). Note that free software and open-source software often create the most concern, as it can be difficult to observe complicated license terms, and lax documentation can possibly be a “show stopper” for a large enterprise acquirer due to risk.

Similarly, the company’s compliance with well-thought-out and implemented information privacy, processing, and security practices and policies is particularly important to an online business.

3) The company’s capitalization table, which is supposed to be a reflection of its current ownership and rights to acquire ownership, is incomplete and inaccurate.

Issues arise where undocumented promises of equity to contractors or employees have never been reduced to actual grant or purchase documents, approved by the company’s board of directors, and signed by the grantee. A failure to get the “paperwork in order” can lead to serious issues, leaving verbal discussions (or worse, email exchanges) open to interpretation and risking claims by the employee or contractor of greater “promised” equity, better vesting terms, and so forth. Former disgruntled co-founders, contractors, and employees can only compound these complexities during an intensive due diligence process.

4) Assignment/change-in-control provisions in key company material contracts require third-party consent.

If consent from the other party to a key company contract is required, failure to obtain it could jeopardize the acquisition, or certainly any higher purchase price range. It can be tricky to approach a key customer or strategic partner ahead of the acquisition, particularly if it involves IP that’s key to the business, and the selling company is usually reluctant to do so. Not knowing, though, could cause the deal to stall midstream after you’ve already gone through a lot negotiation, incurred significant attorney and advisor costs, and worse, possibly foregone important other business.

Regarding Nos. 2, 3, and 4 above, each situation involves the selling company identifying potential problems and working to remedy them before engaging in the sale process. Once the acquirer offers up the proposed acquisition LOI or term sheet and the selling company’s board and shareholders have negotiated and finally accepted it, however, these issues, which can often be remedied if dealt with ahead of time, are now unaddressed and, when exposed during due diligence, can put the deal in jeopardy.

5) The company engages, sometimes unwittingly, with a single potential acquirer or builds its technology and/or business with a single acquiring company in mind, often due to an early key strategic partnership.

A team wanting to sell (emphasis on “wanting”) and embarking on serious acquisition discussions with only one realistic acquirer is often bound for disappointment. A happy exit for the selling company shareholders does not typically result from acquisition discussions being initiated by the selling company; more often, it develops out of some variety of strategic partnership, customer, or other commercial arrangement.

That said, in spite of the best and often good-faith intentions of the acquirer’s corporate development sponsor of the deal, the acquirer’s CFO or similar deal-approval committee is prepared to push back hugely on price if they think they can, so a more competitive environment can help offset that. Pause as the discussions begin to shift from commercial deal to potential acquisition, and take a good look around. Starting a dialog with other potential acquirers can lead to a much better exit.

Exit sign photo via fmua/Shutterstock

Todd Rumberger is a corporate partner with the Palo Alto office of Foley & Lardner LLP where he focuses his practice on private equity, mergers and acquisitions and venture capital, and Internet, software, mobile, digital media and financial services companies through all stages of their growth. He is a frequent speaker on topics involving startup and venture-backed companies, foreign technology companies relocating to the U.S. and mergers and acquisitions. He is author of The Acquisition and Sale of the Emerging Growth Company: The M&A Exit, published by ThomsonReuters/West Publishing (2012).