Trade group launches technology incubator
This month, the National Association of Realtors (NAR) launched REach™, the new real estate technology incubator which seeks companies at all stages of growth, noting that the accelerator program “will be particularly useful to those just now turning a focus to the real estate ecosystem.” The nine monthprogram will accept six to 10 companies per year, is accepting applications through January 10, 2013, and begins in March.
NAR emphasizes that “while other Accelerator programs provide some similar functions and many significant benefits, REach™’s differentiating factor is a focus on education, mentorship and market exposure around access to the trillion-dollar real estate market and the strategic expertise NAR can bring. In the process, NAR will also bring added value to its membership and continue to fulfill its core mission by identifying those technologies, resources and companies that will most benefit the industry.”
The program’s marketing fees
According to the REach™ website, “Participants will be responsible for providing a nominal marketing fee and small percentage of common stock. Contact us for more details.” We asked for clarification from Constance Freedman, Founder, Managing Director at REach(TM) and Managing Director, Second Century Ventures; Vice President of Strategic Investments, NAR. “We are asking that companies reach out to us for details so we can best communicate the value for both sides and answer any questions accordingly,” Freedman said.
When asked for a ballpark figure, Freedman said, “The program is set up so that all parties are aligned. For any further details please just direct questions back to us. I’m not trying to evade the question but purposefully not publishing fees so that we can have a discussion with all qualified applicants to ensure cost/benefits are communicated clearly.”
Outline: the value of the program
Freedman explains the fees in terms of advertising dollars. “The cost is less than what we estimate [for a vendor to have a booth] to go to one show, and the value is equivalent to going to two shows, NAR Annual and NAR Mid-Year, and we are including them in offline as well as online ads for exposure on various channels. We offer access to 150 mentors and 500 beta testers.” Additionally, they “help locate other investors, help startups with their pitch decks.”
“This program puts the $4.5B NAR brand behind [the participants], the most powerful force in the industry, as well as gives access to mentors that are entrepreneurs and CEOs within the industry, collecting $1B in revenue in real estate alone. Also, participants get exposure to potentially 12 million customers, 1 million of which are Realtors.”
Freedman says this program is different than traditional incubators. “It is opening up a market, and we work with the startups to pull out all the stops in that market, it’s a strategic play. It is a longer program than traditional incubators, allowing for real market penetration, whereas traditional incubators’ end game is different, focusing on the value of the company,” and less on market penetration.
How the marketing fees work
When do applicants have to contribute their marketing fees, and is it negotiable? Can they opt out of the NAR Expo, is it based on their current stage and funding status, or is it flat fee? Freedman told AG the fees are non-negotiable, and are a flat fee, due up front.
“After several months of research prior to launching REach,” Freedman said, “we are confident that fees will not be a barrier to entry for qualified companies. There is no opting in/out of things, we’ve built a program that we believe can provide the best opportunities for companies to accelerate their potential growth in this market. The fees are not meant to be a money making element of the program – they are going towards promoting the companies and providing further exposure for them to the market place. The equity component aligns our interests long term. Ultimately the value the companies will receive should far surpass the fees charged from the program; we will have conversations with all qualified applicants to help them assess whether that is the case for them – we only want to work with companies where we have a mutual belief that this is true.”
So why no transparency?
“It is not a figure made public because we want to be able to have a conversation with these companies, and avoiding the gut reaction they may have in response. We would much rather have them direct questions to us in order to make a more informed decision. We don’t want to turn people away,” Freedman said.
REach™ does not offer up front investment in the companies participating in the accelerator program, but Freedman said that “the goal is to graduate them into Second Century Ventures [NAR’s investment arm].”
Dale Stinton, CEO of NAR said, “I think we could better describe it as a program participation fee which is calculated to cover our costs including marketing, our time, and our administrative expenses.”
Another part of the program that many have asked us about is the fact that the incubator will not sign a Non-Disclosure Agreement (NDA), nor a Non-Compete, and some criticize this, but it is actually normal not only for accelerator programs to not sign these documents, but angel investors, venture capitalists, and other programs don’t either.
“…a way for NAR to monetize its cabal”
Bencken added that “Most accelerators invest a mix of cash and intangible services into their accepted companies. I don’t know of any respected ones that charge a fee. Capital Factory invests $20,000 in the companies we accept, along with free office space, legal, PR, design, and access to the advice and networks of our mentors.”
“If history is any guide,” Bencken said, “a fee merely limits you to startups without better options. If your goal is to build a portfolio of sustainable, high-quality companies, hitting startups with fees is a major impediment to that, and historically, is a failed business model. For example, in the bad old days, the DEMO conference charged startups to launch at their show. In 2006, I was invited to launch TenantMarket.com at DEMO, but we declined when we discovered the fee was $20,000. TechCrunch Disrupt and LAUNCH were founded specifically to destroy that business model. And they did. Today, the best startups have their choice of free launch conferences.”
“…the market will decide if charging startups is a good idea”
Which brings us to today. “Many angel networks used to charge startups application fees up to $1,000 simply to apply to pitch. Today, the best companies and angel investors connect primarily via AngelList, and most angel groups have abandoned their application fees,” Bencken said. “Ultimately, the market will decide if charging startups is a good idea, but given that there are only 3-4 billion dollar companies founded each year, as an investor, you’re better off by opening your doors as wide as possible to ensure that you get a shot at them.”
Finally, Bencken said, “The cynic in me says this is a way for NAR to monetize its cabal. It’s not hard to read NAR’s pitch as, ‘Hey startup founder, want to sell your product to Realtors? Just pay NAR a small marketing fee, give up some equity, and you can join our ‘accelerator’ program. You’ll get the NAR stamp of approval, and all your sales will take care of themselves.’ Good accelerator programs offer a lot more than a brand name, and NAR would be foolish to devalue its brand in that way.”
“More like a marketing partnership than an incubator”
Jonathan Eyler-Werve, VP of Technology at MoxieJean.com which helps busy mothers reuse baby and childrens’ clothes, simply said, “this smells badly.”
Having recently graduated an accelerator program, Eyler-Werve said, “There are a lot of accelerators firing up right now, with no corresponding scale up of VC or angel funding, no sudden increase in the pool of qualified people willing to mentor. So there is a boom bust cycle to this. If I were signing, I would ask some hard questions of any accelerator. Questions about tone, about their track record, and of course about money.”
Regarding the REach program, he noted the program sounds “more like a marketing partnership than an incubator. “This place wants cash – which investors should be providing, not taking – committed to a marketing buy that may not have anything to do with the business model you commit to? If you have a product and marketing strategy locked in, what is the value add exactly?”
“It does not sound like an incubator to me”
ReachFactor CEO, Suresh Srinivasan has created numerous startups over 15 years, and has been an angel investor in tech startups for the last five. “I’ve never heard of the typical incubator asking for cash or marketing commitments up front,” he said. “Usually they put (very little) money into the company being incubated in exchange for early equity on merits of the idea & the founders’ willingness to grind it out. I can’t imagine how much cash is lying around an idea-stage company, but those booths at NAR are pricey!”
Srinivasan adds that the fees could be a way of vetting the field. Because they don’t put money into the company, he opines that “it sounds more like they offer the promise of guidance & access to the market. Asking for financial commitments from participants probably helps them vet the field a little and prevent a flood of applicants who’re not 150% committed.”
Under the current model of the accelerator, he says it is “more like a brand’s preferred alliance program with a dash of mentoring and advice to boot. It does not sound like an incubator to me.”
Incubator brings the most valuable assets possible to bear
Simon Justice Hall, Realtor and Branding/Multimedia Consultant at AustinCondoMania said that exposure, market penetration, mentorship, and beta users that are offered are “the most significant ways to support a budding company in the real estate business.”
Hall added, “Fortunately, unlike the restaurant business, you don’t need $100k in restaurant equipment and a physical location to start cooking grandma’s recipes in real estate. I would consider mentorship the most valuable contribution in the arsenal.”
Incubators are typically run for the good of the entrepreneur ecosystem
Cannon said, “I cannot recall ever seeing “fees” as part of the requirement to be in an incubator, those are more program styled groups and should not call themselves incubators. If they want to charge fees, then have a class or specific marketing program to assist the industry.”
“It has been my experience that those involved in incubators like myself, do it because we are passionate about entrepreneurs,” Cannon added. “We are not in it for money and the vast majority of the time, we never see any money! We do it because it is the right thing to do for the entrepreneur ecosystem. The hope is that over the years of incubated companies, that one might actually rise to the top and if not, then we are still satisfied with what we have all done to impact entrepreneurs.”
Loss of internet access is used as punishment for those who abuse it
(TECH NEWS) Internet access is becoming more of a human right especially in light of recent events –so why is revoking it being used as a punishment?
When one hears the word “punishment”, several things likely come to mind—firing, fees, jail time, and even death for the dramatic among us—but most people probably don’t envision having their access to utilities restricted as a legal repercussion.
Unfortunately, that’s exactly what’s happening across the country—if you consider Internet access a utility.
In the past, you’ve probably heard stories about people awaiting trial or experiencing probation limitations being told that they are not to use the Internet or certain types of communication. While this may seem unjust, the circumstances usually provide some context for the extreme nature of such a punishment; for example, it seems reasonable to ask that a person accused of downloading child pornography keep off the internet.
More recently–and perhaps more controversially—a young man accused of using social media to incite violent behavior during country-wide protests was ordered to stay offline while awaiting trial. This order came after the individual purportedly encouraged people to “[tip] police cars”, vandalize property, and generally exhibit other “riot”-oriented behaviors.
Whether or not one reads this post as a specific call to create violence—something that is, in fact, illegal—the fact remains that the “punishment” for this crime in lieu of a current conviction involves cutting off the person involved from all internet access until a verdict is achieved.
The person involved in this story may be less than sympathetic depending on your stance, but they aren’t alone. The response of cutting off the Internet in this case complements other stories we’ve seen, such as one regarding Cox and a client in Florida. Allegedly, the client in question paid for unlimited data—a potential issue in and of itself—and then exceeded eight terabytes of monthly use on multiple occasions.
Did Cox correct their plan, allocate more data, throttle this user, or reach out to explain their concerns, you may ask?
No. Cox alerted the user in question that they would terminate his account if his use continued to be abnormally high, and in the meantime, they throttled the user’s ENTIRE neighborhood. This kind of behavior would be unacceptable when applied to any other utility (imagine having your air conditioning access “throttled” during the summer), so why is it okay for Cox?
The overarching issue in most cases stems from Internet provider availability; in many areas, clients have one realistic option for an Internet provider, thus allowing that provider to set prices, throttle data, and impose restrictions on users free of reproach.
Anyone who has used Comcast, Cox, or Cable One knows how finicky these services can be regardless of time of use, and running a simple Google speed test is usually enough to confirm that the speeds you pay for and the speeds you receive are rarely even close.
In the COVID era in which we find ourselves, it is imperative that Internet access be considered more than just a commodity: It is a right, one that cannot be revoked simply due to a case of overuse here, or a flaw in a data plan there.
How to personalize your site for every visitor without learning code
(TECH NEWS) This awesome tool from Proof lets you personalize your website for visitors without coding. Experiences utilizes your users to create the perfect view for them.
What if you could personalize every step of the sales funnel? The team over at Proof believes this is the next best step for businesses looking to drive leads online. Their tool, Experiences, is a marketer-friendly software that lets you personalize your website for every visitor without coding.
Using Experiences your team can create a targeted experience for the different types of visitors coming to your website. The personalization is thought to drive leads more efficiently because it offers visitors exactly the information they want. Experiences can also be used to A/B test different strategies for your website. This could be a game changer for companies that target multiple specific audiences.
Experiences is a drag-and-drop style tool, which means nearly anyone on your team can learn to use it. The UX is meant to be intuitive and simple, so you don’t need a web developer to guide you through the process. In order to build out audiences for your website, Experiences pulls data from your CRM, such as SalesForce and Hubspot, or you can utilize a Clearbit integration which pull third-party information.
Before you go rushing to purchase a new tool for your team, there are a few things to keep in mind. According to Proof, personalization is best suited for companies with at least 15,000 plus visitors per month. This volume of visitors is necessary for Experiences to gather the data it needs to make predictions. The tool is also recommended for B2B businesses since company data is public.
The Proof team is a success story of the Y Combinator demo day. They pitched their idea for a personalized web experience and quickly found themselves funded. Now, they’ve built out their software and have seen success with their initial clients. Over the past 18 months, their early-access clients, which included brands like Profitwell and Shipbob, have seen an increase in leads, proposals, and downloads.
Perhaps the best part of Proof is that they don’t just sell you a product and walk away. Their website offers helpful resources for customers called Playbooks where you can learn how to best use the tool to achieve your company’s goals be it converting leads or engaging with your audience. If this sounds like exactly the tool your team needs, you can request a demo on their website.
3 cool ways bug-sized robots are changing the world
(TECH NEWS) Robots are at the forefront of tech advancements. But why should we care? Here are some noticeable ways robots are changing the world.
When we envision the robots that will (and already are) transforming our world, we’re most likely thinking of something human- or dog-sized. So why are scientists hyper-focusing on developing bug-sized (or even smaller!) robots?
Tiny robots could assist in better drug delivery, as well as conduct minor internal surgeries that wouldn’t otherwise require incisions.
We’ve all heard about the robot dogs that can rescue people who’ve been buried beneath rubble or sheets of snow. However, in some circumstances these machines are too bulky to do the job safely. Bug-sized robots are a less invasive savior in high-intensity environments, such as mine fields, that larger robots would not be able to navigate without causing disruption.
Much like the insects after which these robots were designed, they can be programmed to work together (think: ants building a bridge using their own bodies). This could be key in exploring surfaces like Mars, which are not safe for humans to explore freely. Additionally, tiny robots that can be set to construct and then deconstruct themselves could help astronauts in landings and other endeavors in space.
Well, perhaps the most important reason is that insects have “nature’s optimized design”. They can jump vast distances (fleas), hold items ten times the weight of their own bodies (ants) and perform tasks with the highest efficiency (bees) – all qualities that, if utilized correctly, would be extremely beneficial to humans. Furthermore, a bug-sized bot is economical. If one short-circuits or gets lost, it won’t totally break the bank.
Something scientists have yet to replicate in robotics is the material elements that make insects so unique and powerful, such as tiny claws or sticky pads. What if a robot could produce excrement that could build something, the way bees do in their hives, or spiders do with their webs? While replicating these materials is often difficult and costly, it is undoubtedly the next frontier in bug-inspired robotics – and it will likely open doors for humans that we never imaged possible.
This is all to say that in the pursuit of creating strong, powerful robots, they need not always be big in stature – sometimes, the tiniest robots are just the best for the task.
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