10 Startups to Watch in 2014

 

If you only focus on the multi-billion dollar valuations of young companies like Pinterest, Uber and Snapchat, you might assume 2013 has been a very good year for tech startups. In reality, it has been more of a bittersweet year. 

Many early-stage companies struggled to raise a Series A rounds of funding, a phenomenon commonly referred to as the "Series A Crunch," which for some meant to fight for their survival. Meanwhile, several later-stage companies like Fab and Rdio laid off large portions of their staff to rein in costs.

Even so, plenty of promising startups raised funds and launched (or teased) exciting features this year in markets ranging from mobile payments to media. What's more, the success of Twitter's IPO has boosted investor interest in other social startups and may help revive the market for tech IPOs, which suffered after Facebook's troubled public offering in 2012.

We've rounded up a few notable startups that have the capital, talent or ideas — often all three — to succeed. Some may thrive for years, some may get acquired and some may go nowhere, but all will be worth watching.

1. Circa
Circa launched its iPhone app in late 2012 with the goal of rethinking the breaking news experience for the mobile era. This year, the startup proved that wasn't just an ambitious pitch. Circa poached Reuters' social media editor Anthony De Rosa to serve as editor in chief of a team that now includes 10 reporters. It also launched a new Android app and updates to its iPhone app which make it easier to find and track breaking news stories as they develop.

2. Level Money
It's not every day that a personal finance startup attracts a lot of buzz, but Level Money may be the exception. The San Francisco company was cofounded by Visa's former manager of global emerging products and aims to make it easier for users to budget on the go from their phones. Think Mint, but with a simpler design, boiled down to the essentials and targeted more toward younger users. The startup raised a $5 million round Series A round this year led by Kleiner Perkins, with investments from some big names in the finance industry including former Citigroup CEO Sandy Weill.

3. Routehappy
If the mark of a good Internet startup is addressing a basic pain point among consumers, then Routehappy is certainly a startup worth watching. Routehappy, which launched its website out of beta in May, relies on a team of data experts to help travelers compare flights not just by price and times, but by seat types, amenities and perks. The startup has since raised $1.5 million in funding and launched a mobile app.

4. Flipboard
Flipboard has been around for a few years, but in 2013, the startup took three big steps towards achieving its full potential as a curation platform. The company gave users the option to create their own magazines, embraced ecommerce with the introduction of shoppable magazines and added support for Windows 8.1, meaning it is now available on all major mobile operating platforms. These efforts, combined with the additional $50 million it is reportedly close to raising, should help Flipboard continue to grow its user base and ramp up monetization.

5. Oyster
A year ago, the concept of e-book subscriptions was just that: a concept. But this year saw the launch of several notable e-book subscription ventures, including an offering from Scribd, the popular document scanning service, and Oyster, a younger startup that raised $3 million in 2012 from Founders Fund.

The two services offer a comparable number of books, but Oyster and its team that includes former Google employees has tried to differentiate itself with a gorgeous user interface like a modified version of Netflix. Both Scribd and Oyster believe that the e-book subscription market could be a multi-billion dollar opportunity just like movie or music subscriptions. If that proves to be even slightly true, expect to see more money and possibly some acquisitions in this space.

6. Uber
Uber has survived regulatory battles and the occasional bad headline to become a fixture in some of the biggest cities in the U.S. and abroad. In August, the ride sharing service announced raising a $258 million funding round led by Google Ventures to help expand into new markets and fight the inevitable legal battles. What makes Uber really worth watching though isn't just its success with the ride sharing model, but the hints from its CEO Travis Kalanick in recent months that the company may expand into other areas like same-day delivery, a hot space right now. In other words, Uber isn't just coming after taxi companies; it's coming after business like Amazon.

7. DataSift
It may not be the sexiest startup on this list, but Datasift finds itself in a space that is becoming increasingly high-profile thanks to Twitter's IPO: social data. Apple recently acquired Topsy, a social media analytics company, for more than $200 million. One day later, Datasift announced that it had raised another $42 million in a Series C round, bringing its total funding up to more than $70 million.

8. Clinkle
Clinkle will either go down as the next big thing in mobile payments or the next big bust, but either way, it will be big. The startup and its 22-year-old founder have raised more than $25 million in June and more big name investors continue to flock to the company. In late September, the company revealed that more than 100,000 people were on the wait list to use the app, even though no one really knows what it does. The app, which is rumored to use a high-frequency sound to process payments, is expected to roll out to more colleges in the coming months. Yet, the company also recently laid off a quarter of its staff, suggesting that there are some problems behind the scenes.

9. Circle
Before Bitcoin started to gain tons of press coverage and approach the $1,000 mark, some of the startups in the space were essentially homegrown operations. But now, some well-known VCs and tech founders are entering the space. Perhaps the most notable is Circle, a company founded by the man behind the Brightcove video platform. Circle raised a $9 million Series A round at the end of October and plans to develop services that make it easier for consumers and merchants to purchase and use digital currencies like Bitcoin. Expect to hear more about Circle in the coming year, assuming Bitcoin sticks around that long.

10. SmartThings
SmartThings is one of the leading startups in the Internet of Things space. The company provides tools to help users connect their homes to their smartphones, which would potentially shut the garage door remotely and send updates when the heat is on too high or when too much water is under the sink. SmartThings recently raised $12.5 million in Series A funding.

By Seth Fiegerman

When should you give up on your business?

By Jack Preston

There comes a point in most entrepreneurs’ lives when they have to admit defeat...

The fact that 90% of start-ups fail tells us that there should be no shame when things don’t quite go according to plan, however that doesn’t make closing down or deciding to sell a business any easier. One man who has had to call time on his fair share of companies is Richard Branson, with the likes of Virgin Brides now consigned to the Virgin Group’s diverse history.

“When you put your heart and soul into your work, it can be very hard to let go. One of the most difficult moments of my career took place in the early '90s, after a couple of years during which British Airways had thrown all its resources into driving Virgin Atlantic out of business. We realized that if we were going to defend ourselves adequately, we were going to need a lot more money. Our only option was to sell Virgin Records, the label that we had used to launch some of the most influential artists of that generation, making our brand a household name,” writes the Virgin Founder in his entrepreneur.com blog.

That’s why, one day in 1992, I found myself running down Ladbroke Grove in London, crying my eyes out, despite the check for $1 billion in my pocket.

“I had loved creating and running Virgin Records - every bit of it. Gritting my teeth and signing the documents of sale wasn’t easy, but it needed to happen. If I had refused or delayed, the Virgin Group would probably be a shadow of the company it is today. That’s why, one day in 1992, I found myself running down Ladbroke Grove in London, crying my eyes out, despite the check for $1 billion in my pocket.”

Before reaching a point where you decide to kiss goodbye to the business you built up from the ground, there are a few checks an entrepreneur must take. Knowing when to let go is important, but prior to that you need to be able to tell yourself that you gave it your all.

“Before you throw in the towel, there are a number of questions you should ask yourself, no matter what industry you’re in - whether it’s selling popcorn or Porsches. Have you done your market research and discovered what your customers are looking for? Have you offered them something that’s not already out there? And perhaps most important, is your business making a difference for them?

If you’re satisfied that your product, branding, marketing and customer service are all spot-on, then think carefully about how and when your potential customers buy the product you’re offering. If possible, you want your shop or your product to be at hand exactly when people find themselves in need of what you’re selling,” explains Branson.

“If you’re not yet making a difference in your customers’ lives, consider helping your community in a way that’s integral to your business. If you don’t know where to start, try leveraging the power of social media. It might seem a little disheartening to start from a small base of followers, but if you give this the attention it deserves, that can quickly change - interactions with potential customers are gold dust. Use them to discover your company’s unique voice and find out what people are looking for. Tell everyone what you’re all about, so that by the time they come to your shop they already know what’s on offer.”

Have you had to sell or close a business? If so, why not share your experiences below, including any tips or checks which an entrepreneur should make when assessing the health of their company.

5 Things Never Heard at the Most Innovative Companies

Kathy Gersch explains that while it may be difficult for your company to generate innovative ideas, high-tech start-ups and other companies we consider to have innovation built into their DNA have just as much difficulty maintaining their innovative edge.

The most interesting thing about the Fast Company Most Innovative Companies 2013 list isn’t who is on it. It’s who isn’t.

Writing about the companies who had fallen off the list (and were obviously upset about it), Robert Safian, Editor of Fast Company magazine said, “It’s not that these businesses suddenly lost their mojo. But in a climate where the velocity of change is accelerating, these companies didn’t have a compelling-enough breakthrough for us to highlight.”

Safian’s remark perfectly illustrates the essential element required for survival in today’s economic environment. If you aren’t constantly innovating, your organization is most likely losing its edge. If your innovations are incremental – not big enough to move the needle – you’re still losing.

What do the companies on Fast Company’s list like Nike, Uber, and Pinterest have that others like Facebook and Twitter don’t? Better new products – which came from innovative ideas, that’s obvious. The mystery is where these ideas come from, how they rise to get noticed, and then how they are brought to market faster than anyone else. This list is a reminder that some of the companies we’ve historically associated with innovation because of their brand name (3M, Facebook, and Twitter) aren’t immune to losing their edge.

While people have spilled much ink on how to create innovation, I’d like to offer an easier way to get there – by process of elimination. Let’s start with five things you will NOT hear at the most innovative organizations. Be on alert for them; These are clear indicators that your company is losing its innovation “mojo.”

1. “Can we do that?” Permission seekers are the mark of unclear company vision. If your company’s vision is clear enough, and has been communicated constantly and consistently, people do not come to you for permission, they come to show you what they’ve already done.
2. “We can’t do that.” On the flip side of the previous comment, you find the limitations or barriers people have set up in reaction to the punishment they’ve experienced for prior failures. If your people see others try, fail, then get punished, you can guarantee that people will remain in the safe spot. No one is going to try to innovate, much less try anything remotely outside the box ever again.
3. “We have to go through proper channels.” A mark of truly innovative companies is that the employees are well-networked, and they are constantly crossing silo walls to engage other departments, gather knowledge, or just get an outside opinion. Though one person may come up with the idea, nobody creates a great innovation solely on their own.
4. “That’s good enough.” In many companies, once significant progress is made, momentum slows and eventually the project fails. This is one of the key reasons 70% of change efforts fail. Yes, it’s important to celebrate incremental wins, but in innovative companies, people don’t let up – they continue to focus on the final prize. This only comes from a relentless focus on winning.
5. “That’s not my job.” This final phrase is the clearest indicator that people aren’t focused on the future of the company. If employees have a clear understanding of the vision set by leadership, no one will be talking in terms of their box on the org-chart. If you hear “us” and “them” language referring to internal teams, beware. Employees at innovative companies know it is always “our” job – we win together.

Stay on the alert to these dangerous phrases that might sneak into conversations in your organization. A great brand name no longer protects you from losing your edge. Remember Kodak?

Kathy Gersch is an Executive Vice President at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations. John Kotter is the chief innovation officer at Kotter International, and is the Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School.