TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
By: Simon Johnson
Via: The New York Times – Economix
Entrepreneurship seems like the quintessential private sector activity. An individual or a small group of colleagues decide to set up a business and raise some capital. If things go well, sales grow and they can hire more people. The business grows based on retained profits – or they may be able to attract funding from venture capital or some other risk-taking investors. Success brings legitimate big rewards to the people who are willing to risk an equity investment, which could rise in value or become worthless, and to those who work hard to make the business growth possible.
What does any of this have to do with the government?
According to an authoritative series of reports on entrepreneurship around the world, the government has a key impact not just on how many new businesses are created, but also – and perhaps more importantly – on the nature of these firms and their ability to grow.
The reports in question are the Global Entrepreneurship Monitor series, which has been running since 1999. I’ll focus here on the 2012 Global Report (from which the quotes below are taken).
Tracking, monitoring and measuring entrepreneurship is not easy, and the Global Entrepreneurship Monitor team deserves a lot of credit for developing a sensible methodology and sticking to it. They survey around 2,000 adults in a random representative sample, and they talk with at least 36 experts in each country. Their goal is ambitious: “GEM provides a comprehensive view of entrepreneurship across the globe by measuring the attitudes of a population, and the activities and characteristics of individuals involved in various phases and types of entrepreneurial activity.”
The focus is on “the incidence of start-up businesses (nascent entrepreneurs) and new firms (up to 3.5 years old) in the adult population (i.e. individuals aged 18–64 years)” (see Page 14).
No measure is perfect, but the strength of this approach provides insight into some fascinating questions. Where do people want to create new businesses? And when do entrepreneurs seek to make these businesses grow, rather than lurk under the regulatory radar?
These are important questions not just for the United States, where we pride ourselves on new enterprises being created, but also in all countries. All societies want jobs and preferably good jobs at high wages. Ideally also, there is a process of productivity improvement, meaning the amount that people can produce goes up every year. (This can be consistent with maintaining a sustainable environment or even using fewer resources, although I will readily concede that is not the path most of the world is currently on.)
The reports are rich in detail, but three points jump off the page regarding the role of government.
First, when the overall environment for business is bad, there are many entrepreneurs. For example, while there is a great deal of variation shown by the data within Africa, it is also clear that this is a difficult place to do business, because, for example, regulation is unpredictable and property rights can be hard to defend against powerful people.
Lack of human capital is also a weakness. You need capable engineers, managers and many others to help companies grow. The education system in many African countries is not in good shape.
Yet, there are plenty of potential entrepreneurs in the study: “Sub-Saharan Africa reported the highest intentions of any geographic region (53 percent), which is consistent with their positive perceptions about opportunities and their belief in their capabilities” (Table 2.2).
The explanation is simple. In such economies, entrepreneurship is a fallback option, when it is not possible to get a decent job in larger business.
“As per capita income increases, larger established firms play an increasingly important role in the economy,” the report says. “This provides an option for stable employment for a growing number of people, serving as a viable alternative to starting a business.”
Second, the negative effects of macroeconomic policy can crush new business creation even in places with plenty of human capital and good perceived opportunities.
For example, the prolonged recession in Southern Europe has reduced the perceived opportunities for potential entrepreneurs: “The Southern European countries show not only a consistently lower level of opportunity perceptions compared with the Nordic countries, but they have mostly showed declines,” the study finds.
Perhaps this will turn around – entrepreneurs are good at dealing with adversity (and that’s the point from Africa). But it’s hard to break into a market when customers are squeezed and investors are cautious.
The Global Entrepreneurship Monitor reports make a fine but appealing distinction: do you see opportunities, and do you plan to do anything about it? These are separate issues. If your current job is good enough, you will stick with it. Or perhaps you don’t have the skills necessary, in your own mind, to make the leap to start a company.
It would not be a surprise if entrepreneurs help countries like Portugal to recover from the euro crisis. But this is going to take awhile.
Third, the most difficult question is for what the report calls the innovation-driven economies, most of which are already among the richest countries in the world. What, if anything, should the government do to promote entrepreneurship?
Perhaps the answer is: not too much. All kinds of plausible schemes are put forward to help entrepreneurs at various stages of their development. No doubt some of these are effective, particularly when they involve private sector mentors and building networks of contacts. Also, helping companies at an early stage reach foreign customers can be helpful, so, for example, a business in Portugal does not have to worry so much about local or even regional macroeconomic conditions.
But what strikes me from the report is its data on the fear of failure. Part of what drives these numbers may be cultural, but there must also be economic incentives at work here, like the consequences of going bankrupt for a company or an individual. Compared with other countries, the fear of failure is high in Japan and also in South Korea. This fits with other evidence from those places. (For further thinking on why this matters, I recommend “Entrepreneurship and the Stigma of Failure,” a paper by Augustin Landier.)
The fear of failure is even higher in Italy and Greece. Although we should worry about how precisely we can compare such attitudes across countries, the United States has one of the lowest fears of failure among rich countries.
Reducing the fear of failure for potential entrepreneurs is not any kind of panacea for economic development. Malawi, a poor country, has a very low fear of failure.
Government is responsible for the overall infrastructure in a country, and this includes access to education, decent roads and other transportation links. There is also a case for supporting basic technology development, like at the university level, for example, because of the spillovers or externalities throughout the economy. (I work at M.I.T., which benefits greatly from such support and which has had a major impact on new business creation.)
In innovation-based economies (as the Global Entrepreneurship Monitor classifies them), what governments really need to do is to encourage people – entrepreneurs and the equity investors who back them – to take risk and ensure that failure is seen in a positive light, rather than as some kind of stigma.
The message should be: Go out and start a business, based on your best idea. Find a technology with a new application or develop a different way to make customers happy. If it doesn’t work out, you have still developed important skills and made a major contribution to society.
By: Katherine Rampell
Via: The New York Times
The Affordable Care Act is expected to produce a sharp increase in entrepreneurship next year, according to a new report from the Robert Wood Johnson Foundation, the Urban Institute and Georgetown University’s Health Policy Institute. The number of self-employed people is expected to rise by 1.5 million — a relative increase of more than 11 percent — as a direct result of the health care overhaul.
One major barrier to entrepreneurship in the United States — beside the usual risks involved with starting a company — is that it has been difficult to get health insurance on the individual market. Those who do end up founding or joining a start-up are often able to do so because they have a spouse with employer-sponsored insurance, or because they are keeping a day job with a bigger company. (This was the case, for example, for most of the people involved with Leap2, a Kansas City start-up that I profiled last fall.)
Economists have looked at whether this insurance-related job lock is deterring self-employment and the formation of new businesses, and the data suggest it is. A Journal of Health Economics paper, for example, found that business ownership rates jumped sharply from just under age 65 to just over age 65, when people become newly eligible for Medicare. Using Current Population Survey data, the same paper also found that wage and salary workers are more likely to start businesses from one year to the next if they have a spouse with employer-based insurance.
A working paper from the Upjohn Institute looked at a change in the law in New Jersey that expanded access to individual health insurance. It found that the law seemed to increase self-employment, particularly among “unmarried, older, and observably less-healthy individuals.”
The report released Friday applies those findings to a model of what will happen in 2014, based on the Affordable Care Act’s provisions for “universal availability of non-group coverage, the financial assistance available for it, and other related market reforms.” The authors also adjusted their numbers depending on the access that residents of various states already have to individual health insurance. (Vermont, for example, already has a statute that allows the self-employed to obtain small group coverage.) Over all, they found, the ranks of the self-employed are likely to rise 11.5 percent, from about 13.1 million to 14.6 million. A table with their state-by-state estimates is below.
By the way, the paper does not mention this, but the same forces that will make it easier for workers to become self-employed may also make it easier for workers to retire early. I have heard anecdotally about people in their late 50s or early 60s who would like to retire but can’t do so because they’re basically uninsurable (for now) on the individual market; I wonder if we’ll notice a wave of retirements in this age group come 2014.
By: Marcus Wohlsen
PayPal co-founder Max Levchin faced some flak recently when he announced he was starting a new company in the already crowded field of digital payments. Levchin is one of several Silicon Valley luminaries who have talked big about the tech industry’s timidity. So starting yet another payments company seemed decidedly unambitious.
Yet plenty of companies out there are still taking a run at the next moonshot. Their technologies don’t let you share photos or offer you a deal on your next manicure. Instead, these companies could change the world in deep ways by solving tough problems, rather than the kind of “problems” too many startups make up as justifcations for the “solutions” they’re trying to sell. Not that photo-sharing isn’t great (Levchin did that, too). Unlike what the companies that follow are trying to do, however, it’s not exactly shooting for the moon.
Above: Emotiv Lifescience
You don’t get much closer to a moonshot than “let’s build a machine that reads people’s minds.” Even if Emotiv Lifescience’s brainwave scanner was just for use as a videogame controller, the company’s aspirations would still be ambitious. But when you start talking about a brain-controlled wheelchair, you’re entering the territory of technology that matters.
While still a grad student, Immumetrix scientist Christina Fan developed a way to diagnose Down syndrome in a fetus through a simple test of the mother’s blood, rather than the far riskier, unpleasant use of amniocentesis. She and her colleagues are working to perfect the technique, as well as developing ways to use high-speed DNA sequencing to analyze individuals’ immune systems for the eventual development of custom treatments.
Fan says: “In the far future, knowledge about the immune repertoire could even inform genetic engineering to give a person super-immunity or to reverse immune disorders.”
Wind and solar power are great, except when it’s not sunny or windy. But wunderkind Danielle Fong, who graduated from college at 17, has developed a new way to store green energy that claims new benchmarks for efficiency. Her system uses compressed air and a fine mist of water to pump electricity back into the grid during times of peak demand. LightSail backers Peter Thiel, Vinod Khosla and Bill Gates have poured more than $37 million so far into the Berkeley-based company.
Photo: Sam Howzit/Flickr
Unlike most companies on this list, Huawei is anything but a scrappy startup. The one-time importer of Hong Kong telephone equipment has grown into a telecom giant and one of the world’s leading smartphone makers. Though not widely known in the U.S. (yet), Huawei has succeeded not because of its phones’ features but the lack of them.
Huawei’s low-priced Android handsets are a key reason smartphones have become less of a luxury and more of a commodity in China and other parts of the world. According to one recent estimate, about one-seventh of the world’s population uses smartphones. Imagine what happens when the other six billion do.
Photo: Jim Merithew/Wired
In much of the developing world, credit and debit cards have never caught on, since the telecom networks needed to support their use doesn’t exist. In those same places, however, mobile phone use has exploded. In a phenomenon known as “leapfrogging,” the wires needed to power traditional card-based transactions might never get installed, since everyone will just use their phones instead.
In Kenya, mobile operator Safaricom has developed M-PESA, a way to transfer money and make microloans using text messages — no bank account required. Unlike in, say, the U.S., mobile payments have taken off in Kenya thanks to M-PESA, with millions of users. The company is working on rolling out the service to other countries where a lack of financial and technological infrastructure could cease to be a barrier to joining the 21st-century economy.
Photo: Sipa via AP Images
Saving energy is good. Saving energy without having to think about it is better. The buildings we inhabit are among the greatest sources of greenhouse gases. Nest’s smart thermostats seek to shrink this carbon footprint by learning our habits to automate indoor climate control.
The design software juggernaut Autodesk recently partnered with Organovo to make human organs designed by computer and printed by machines a future reality. Already, Organovo’s 3-D bioprinters are being used by medical researchers to print tissues for experimentation. Organovo co-founder Andras Forgacs went on to start Modern Meadow, a company developing printable meat and leather.
Photo: Dave Bullock / Wired
Few startups have had as much success in the war on cancer as Plexxikon. The company has shown dramatic results with a compound that targets a mutation found in many advanced-stage melanoma tumors (above, seen under a microscope). The next time you try to talk yourself down from work stress by saying “It’s not like we’re curing cancer,” remember: These guys actually are.
Photo: Pulmonary Pathology/Flickr
In much of the world, mosquitoes remain one of the most virulent vectors for infectious diseases. Oxitec’s genetically altered bugs fight Dengue fever by passing down a lethal gene to their offspring that kills them before they can reach adulthood. Curbing an entire species has raised concerns about unintended ecological consequences. But the use of genetic engineering as a public health tool is only likely to grow if Oxitec’s modified mosquitoes help eradicate this deadly disease.
Forget about the moonshot. How about a Mars shot? Of all the members of the PayPal mafia, which includes Levchin and Thiel, Tesla and SpaceX founder Elon Musk has done the most to chase innovation on a truly grand scale. Musk not only wants to put humans on Mars; he wants 80,000 of us to live in a Martian colony. And SpaceX is his launching pad.
In the meantime, the company is busy making privatized space travel a reality. Most recently, SpaceX showcased a rocket that takes off and lands vertically—just like the ships in every sci-fi movie ever. Another SpaceX craft just docked with the International Space Station.
Photo: Space X
By: Sarah Max
Via: The New York Times – DealB%k
When Will Fuentes planned an extended business trip to Seattle last year, he tapped into the local chapter of a national networking group there. Within hours, Mr. Fuentes, who founded the Arlington, Va., software company Lemur Retail, had secured a work space, introductions and even restaurant recommendations via the group, the Startup America Partnership.“Before I flew out there, I already had five or six meetings set up with potential clients and other key contacts, as well as one potential acquirer,” Mr. Fuentes said.
A couple of years ago, entrepreneurs would have needed several trips to make similar connections outside their own cities. Even in this era of social networks and venture conferences, start-ups are still surprisingly disconnected on a national level.
“Each region has its ties, but in many cases, entrepreneurs are operating in silos,” said Carolynn Duncan, the chief executive of Portland Ten, a mentoring program for early-stage companies, mainly in Oregon. “An entrepreneur in Oregon doesn’t have an easy way to network with entrepreneurs in Washington D.C.”
Startup America, a nonprofit organization with an all-star cast of deep-pocketed backers, is trying to bridge the gap. The organization, which was started in January 2011 as the brainchild of AOL’s co-founder, Steve Case, and the Ewing Marion Kauffman Foundation, wanted to bring a private-sector support to start-ups — without financial strings attached.
“Supporting start-ups throughout the country is the only way to make sure the American economy is firing on all cylinders,” said Mr. Case, who is the chairman of the partnership.
Start-ups are a crucial driver for job creation in the United States. From March 1994 to March 2010, businesses less than one year old created 3.9 million jobs a year on average, according to the Bureau of Labor Statistics, though that number has declined during the recent economic weakness.
The Small Business Administration and United States Chamber of Commerce have long been a resource for start-ups, but these government agencies have a broad mandate. There is a “growing recognition,” said Mr. Case, that high-growth start-ups — those with the potential to be national or international companies — have different needs and requirements than traditional small businesses.
Startup America’s initial focus was to provide support to start-ups through deals on goods and services, like 40 percent off FedEx shipping and free flights on American Airlines. But the group quickly realized that start-ups needed more practical help, like sharing best practices and networking.
Soon after the partnership’s start, entrepreneurs around the country starting contacting Startup America, asking how they could create their own networks and reach out to counterparts in other states. “Most of these regions were already coming up with their own initiatives or thinking about them,” said the organization’s chief executive, Scott Case, a founder and former chief technology officer of Priceline.com (and no relation to Steve Case). “We’re helping to stitch together all these parts.”
Taking cues from the entrepreneurs, Startup America has turned its attention to building such a network. Nearly 12,000 members are now affiliated with local Startup America initiatives in 30 states. The partnership expects to add another 10 states this year.
Each Startup America region is spearheaded by local “champions” who come together several times a year at national conferences, communicate via Google groups and have access to an online “idea center” where they can brainstorm about, say, bringing in outside capital or hosting a start-up conference. These envoys are all “founder types” at different stages of their careers, Scott Case said. “Some have exited companies and are looking to continue to feed that creative drive. Others understand that if they can strengthen their community, they can strengthen their own company.”
Brooks Bell, founder of an eponymous 22-employee digital consulting business based in Raleigh, N.C., became involved with the partnership in 2011 after realizing that many potential clients considered her area a backwater. “I realized that was impacting my company’s brand, too,” she said.
Mrs. Bell pointed out that other national groups, like Entrepreneurs’ Organizations, offer resources for high-growth companies. Yet, their emphasis is typically on supporting individuals rather than elevating the region and networking nationally. “They also tend to focus on early-stage companies,” she said. Until Startup America, she added, “there weren’t a lot of opportunities for early-stage companies to interact with funded companies.”
Though Startup America regions work off the same blueprint, each takes a slightly different approach. In Maryland, the staff and champions volunteer virtually. Startup Tennessee partnered with the Entrepreneur Center in Nashville, which runs a nonprofit incubator program. Startup Colorado works out of Silicon Flatirons, a center for law, technology and entrepreneurship at the University of Colorado Law School, and finds partners to finance specific projects.
Although the regional chapters operate independently, they benefit from the credibility of a national organization. “It’s helping elevate our start-ups nationally and get them in front of audiences we never would have,” said Andy Stoll, an entrepreneur in the Iowa City, Iowa, area, where rebuilding from the floods in 2008 has helped generate a boom in start-up activity.
“To have the opportunity to sit in a room with their board and have Steve Case ask me, ‘What are the three things that those of us at this table can do to really help support the Indiana community?’ is amazing and a humbling experience,” said Michael Coffey, a partner at DeveloperTown, an Indianapolis design and development firm that works with companies of all sizes.
In the end, it’s all about business.
Aaron Schwartz, a co-founder of the San Francisco-based Modify Watches, initially joined Startup America for the discounts. Now, he’s also tapping into the partnership to network, including finding corporate clients who order custom watches and vendors. “I now have a contact in Tennessee who has offered to look into manufacturing our watches there,” he said.
Mr. Fuentes of Lemur Retail found two potential clients, both national chains, through his connections in Seattle last year; he’s currently in talks with those companies. He’s also helping his Northwest counterparts make inroads in the Washington area. He likens the experience to a fraternity or alumni organization of entrepreneurs.
“When people contact me from my high school or college, I pick up the phone,” he said. “This is no different.”
By: Ariel Schwartz
The sharing economy is growing rapidly, and this year saw its expansion into all sorts of new parts of the economy. But how will we deal with this reshaping of the idea of ownership?
Collaborative consumption, the peer-to-peer economy, the micro-entrepreneurship economy, the sharing economy: whatever you want to call it, this was the breakout year for digital platforms that let people share their personal assets, and in many cases carve out a decent side business from them.
Home-sharing service Airbnb is perhaps the best-known platform, but it’s hardly the only one that has found success. Peer to peer carsharing marketplaces like Relayrides and Getaround also grew in popularity over the past year; Relayrides is now available nationwide; Getaround is only available in select cities, but it recently launched a service that lets people rent their idle vehicles for months at a time.
Even for those with no home or car to rent, the sharing economy has ballooned to include almost anything you could want to loan: your driveway, cooking mastery, IKEA furniture-building expertise, waffle maker. But as with any new industry, some of the kinks have yet to be worked out. Trust is still an issue, especially when you’re taking a ride in someone’s car or sleeping in their home.
Check out our picks for Co.Exist’s best collaborative consumption stories of the past year:
1. 3 Rules For Building A Collaborative Consumption Business
The cofounder of Zimride talks about the keys to building a business that hinges on experience instead of ownership.
2. The Rise of the Micro-Entrepreneurship Economy
Are you making money renting your apartment on Airbnb? You’re a Micro-Entrepreneur. As more and more services let people monetize their own assets and knowledge, it’s creating a new sector of the economy.
3. What’s The Future Of The Sharing Economy?
As more and more businesses start that are based on using existing resources instead of selling new ones, how can those businesses mesh with an economy built to facilitate consumption?
4. Not Driving? Getaround Lets You Make Cash By Renting Your Idle Car For Months At A Time
Formerly concerned just with short-term rentals, the peer-to-peer car sharing service is moving into new territory.
5. Start Your Engines: Peer-To-Peer Carsharing Is Now Available Wherever You Live
Covet your neighbor’s car? You might get a chance to get behind the wheel, as RelayRides has expanded nationwide, potentially taking the idea of all of us sharing cars to a new level of popularity.
6. The Potential For Pitfalls And Success In The Sharing Economy
It seems like every day sees the launch of another collaborative consumption startup. Most recently: Sidecar, which is akin to Uber with non-professional drivers. Are we really good enough people to be sharing everything?
7. Can The Rise of Micro-Entrepreneurs Force Companies To Be More Human?
When the business landscape isn’t just corporation versus corporation, but corporation versus real human being, our values are going to be forced to change.
8. A Retailer For Free Stuff, Created By Walmart, Saatchi & Saatchi, and Zipcar Vets
Yerdle–a new site where you can list things to give away–hopes to change how we view consumerism and make it easier to give unwanted purchases a second life.
By: Jessica Bruder
Via: The New York Times
Small-business owners are like Swiss Army knives: expected to handle dozens of specialized tasks without falling apart. But even the sharpest entrepreneurs have it tough this time of year — inevitably, some will outsource part of their workload to other enterprising people.
CHALLENGE Your to-do list is crammed with tiny tasks. How can you delegate them cheaply?
ONE SOLUTION For $5 you could drink a large latte and work through the night. Or you could hire a minion at Fiverr, which bills itself as “the world’s largest marketplace for small services.” Starting at $5 apiece, tasks include designing business cards and letterheads, sending out handwritten cards, editing newsletters, making short commercial videos and throwing darts at a picture of your rival.
“Pretty much anything you imagine can be found on Fiverr,” said the company’s chief executive, Micha Kaufman, who set out in 2010 with Shai Wininger to build what Mr. Kaufman calls “an eBay for services.”
“It’s giving people the tools to do business with the entire world,” he added.
Fiverr, with headquarters in Tel Aviv and offices in New York and Amsterdam, has more than a million active buyers and sellers across 200 countries, Mr. Kaufman said. He would not disclose revenue or the number of sales his site has brokered so far. Fiverr has raised $20 million in financing and has 60 full-time staff members. The company collects a 20 percent commission on each sale.
THE COMPETITION Fiverr’s success has inspired an army of imitators, including Gig Me 5, Gigbucks, TenBux and Zeerk. Building and selling Fiverr copycat sites has also become a cottage industry for online software developers. Asked whether he took this as a compliment, Mr. Kaufman replied dryly, “One of my friends said, ‘It may be flattering, but it’s a very annoying way to flatter you.’ ”
CHALLENGE You want to delegate complex, highly specialized tasks, but it’s hard to find people whose expertise matches your needs.
ONE SOLUTION SkillPages connects skilled workers with those who want to hire them. The site showcases an array of specialists — beekeepers, tree surgeons, witches, clog dancers — along with professionals with more conventional business skills, like payroll administrators, social media marketers and typists.
Iain Mac Donald decided to start SkillPages after seeking a tree cutter online to do work in his yard. “This guy arrives with a huge truck, and he could have taken down a forest,” Mr. Mac Donald said. “He was going to charge me $3,000. It just wasn’t right.”
Mr. Mac Donald figured there had to be a way to help make better matches. To that end, SkillPages identifies specialists whom users’ families and friends may already know through social networks like Facebook, LinkedIn and Twitter. Users can also view work samples online and contact members directly.
Based in Ireland, SkillPages went live in 2011 and opened an office in Palo Alto, Calif., this year. The company’s 35 employees handle traffic from more than nine million users worldwide, 1.5 million of them in North America. The company has received $18.5 million in financing, said Mr. Mac Donald, the chief executive, declining to disclose sales figures.
SkillPages’ basic services are free. To make money, it sells advertising space and offers premium memberships with stand-alone Web sites for those offering services. Next year, Mr. Mac Donald plans to offer a paid matchmaking service for talent-seeking companies. He is also building a “targeted offers” program that will let niche vendors present deals on products and services to members with relevant expertise. The vendors will pay SkillPages a bounty for each sale.
THE COMPETITION Guru, oDesk and Elance also focus on skilled work. LinkedIn added a “skills” component to its profiles last year.
CHALLENGE You are overwhelmed by errands and other location-specific jobs that cannot be farmed out to the other side of the planet. You need an affordable gofer: competent, trustworthy, local.
ONE SOLUTION TaskRabbit is an on-demand service for handling quick jobs: assembling Ikea furniture, packing boxes, wrapping gifts, mailing invitations or even carrying awkward objects like Christmas trees. The company sends requests to a network of “rabbits” — errand-runners screened through video interviews and background checks — who bid for the work. Last month, 80 were hired to wait on Black Friday lines.
Leah Busque got the idea for TaskRabbit one night in 2008, when she was going out to dinner and realized she had no food in the house for Kobe, her yellow Labrador. Envisioning an online service for dispatching errand-runners, she quit her job as an I.B.M. software engineer to build it. A year later, she won a slot in Facebook’s now defunct incubator program and later moved her company, then called RunMyErrand, to San Francisco from Boston.
Now TaskRabbit has 60 employees at its headquarters and more than 4,000 freelancers wrangling tasks for customers in the Bay Area and Austin, Tex.; Boston; Chicago; Los Angeles; New York; Portland, Ore.; and San Antonio.
TaskRabbit has raised almost $40 million in financing, and revenue nearly quintupled this year, Ms. Busque said. She would not disclose sales figures but said the company typically charges users 18 percent on top of its freelancers’ fees. Small businesses, she said, are her fastest-growing group of customers.
THE COMPETITION Agent Anything, Exec., Fancy Hands, PAForADay and Zaarly.
CHALLENGE Your business moved. In days of yore, you would just update the address in the local Yellow Pages. But now that information appears on myriad Web sites like Yelp, Citysearch, Yahoo and Foursquare. How do you adjust them all?
ONE SOLUTION Yext gives business owners a single dashboard for updating directory information and posting special offers across 57 listing sites. After Hurricane Sandy, about 2,300 users logged on to post closings and other storm-related messages, according to Yext’s chief executive, Howard Lerman.
“My favorite was one guy who put up a 24-hour elevator rescue hot line,” he said.
Founded in 2006 in New York City, Yext, in its first incarnation, drove sales leads to other businesses on a pay-per-call basis. In August, Mr. Lerman sold that service, which he said was profitable and generating eight-figure revenue. He wanted to refocus on expanding Yext’s fledgling directory information product, which came out in 2011.
“I’m perfectly happy with the word ‘gamble,’ ” he said. “You should only take big bets in technology.”
Yext has raised $27 million in financing so far for its listings service, which passed the 100,000-subscriber mark this month and generates more than $30 million in annual revenue, according to Mr. Lerman. The full service costs $499, billed annually, and also notifies users when new reviews of their companies appear on listings sites.
“To go to all of those sites individually and try to manage your information or update stuff would take hours and hours and hours,” Mr. Lerman said. “Yext is all about businesses owning their own data.”
THE COMPETITION Localeze, Express Update and CityGrid.