Jail 2.0: Warden uses inmates to start tech blog

Penitentiaries and correctional facilities will often have inmates pay their debt to society by working for it. Much of the unskilled labor traditionally done by chain gangs is obsolete, like railroad building. Other work has been automated, like license plate stamping. One California state facility has found modern, lucrative blue collar work for the 21st century: Tech Journalism.

It all started when Michael Arrington was locked up in the drunk tank after the Boxbnb launch party. He was found stumbling around the streets of San Francisco at 4am waiving a half eaten burrito at taxis and bicyclists yelling “Do you know who I am? I’m the CEO of Yahoo!” and then laughing maniacally. Arrington was only locked up for the night, but it gave the facility’s warden, Rudolf Hazen, an idea.

Since this is San Francisco, most of the facility’s guards have their own startups. Hazen invests in most of these businesses, but has trouble getting them coverage. Since Arrington was now under Hazen’s roof until he sobered up, he forced Arrington to teach the inmates how to write about startups. It took a drunk Arrington a few hours to teach the inmates the ins and outs of modern tech journalism:

We focused on rumors and funding announcements. These articles require the least amount of research. Since you want to get them out as fast as possible, we removed proofreading from our process. Readers will post corrections to spelling, grammar, and even content in the comments section. The inmates will respond to comments and can get defensive when readers call them out, sometimes to the point of  violent verbal abuse. We thought this might give them away as criminals or at least amateurs, but nobody seems to have noticed.

Hazen wouldn’t tell us the name of the blog but he did say that it has been acquired and was part of AOL Tech.

The Wanton Wantrepreneur: The foolproof way to calculate your company value

Licensed from 401K on Flickr.

If you are like me, you have put up a LaunchRock page and updated your LinkedIn profile to reflect your new status as CEO. You have a team of crack developers that you recruited away from the Geek Squad at Best Buy. You copied a business model off of DocStoc and put your name on it. It’s time to raise money, but how much is your company worth?

Founders

It has been said that investors invest in the team, not the idea. This is total bullshit. Investors like people that are young and stupid, which explains why they love college dropouts. How much money did Facebook raise anyways? Like a trillion dollars.

Add $100k if you are 27 to 29

Add $200k if you are 22 to 26

Add $400k if you are 19 to 21

Add $100k if you dropped out of college

Team

Your founding team needs to be big so you can prove that you can recruit. The internet is filled with VC’s telling you to always be recruiting, and if you have 4 or 5 cofounders, then everyone knows you can close, and that is worth lots of money.

Subtract $500k if you are a solo founder

Add $50k if you have 2 cofounders with you

Add $100k if you have 3 cofounders with you

Add $500k if you have 4 or more cofounders with you

Customers

This is the worst thing for your business. Customers always feel like you owe them something, mostly because they gave you money, and then they try to tell you what to do. Worst yet, once someone pays you, then you have to tell investors how little the customer gave you. If nobody has given you any money yet, then you are ahead of the game.

Subtract $1k for every paying customer

Skills

Everyone working at a startup has to be good at something. And what is the best way to tell if someone has skills? Where they worked before.

Add $50k for each ex-Google employee

Add $100k for each ex-Apple employee

Add $500k for each Facebook employee

You are probably wondering why Facebook employees are worth so much to the value of your company. Investors only hate one thing worse than losing money, and that is looking stupid. The more Facebook employees you have, the more likely you are to get some newly minted millionaire idiot to invest in your company when it implodes.

Miscellaneous

There is plenty of other stuff that can impact your valuation.

Add $100k if your developers use Apple products

Subtract $100k if you know what Windows Azure is

Add $1m for: The Instagram of X

Add $100k for every five thousand Twitter followers you have

At the end of the day, just remember that entrepreneurship is not about creating value, it’s about raising money and buying a yacht. Follow my guide to valuing your company and you will be on the ocean in no time.

Hell Labs opens doors in Silicon Valley; plans to build startups “within an hour”

Accelerators and Incubators are becoming commonplace in the Startup world. Many cities have them. Two of the most well-known are TechStars and Y-Combinator. The goal of these organizations is to provide an environment, resources and mentors to help take a startup from idea to execution, assisting in the process along the way. Many young co-founders and aspiring entrepreneurs are turning to these organizations for the support they need to get off the ground and leave the program with a cash-flow positive business. Today, a new Silicon Valley accelerator, Hell Labs opens its doors and is now accepting applications.

Hell Labs is not your average accelerator. They plan to break the mold and truly innovate the process in a big way, using fear as the primary motivator. “We’re not f*cking around here”, said CEO R. Lee Ermey. “We plan to get some founders in here, put them in an intense environment where they are required to build an MVP [Minimum Viable Product] and get it out to customers in less than an hour. If they don’t get it done, we lock them in a dark room with snakes for the next hour. We then give them one more shot.”

It sounds pretty terrifying. More importantly, it seems unrealistic, but Ermey claims it’s not. “There are 2 key aspects to our program. The first: no planning. These days, there is absolutely no reason to plan your business before doing it. You devise a plan as you go. Got an idea? Perfect. Start building it. The second: get it live. Programming languages such as Ruby on Rails is about quick delivery. Startups spend too much time on details. This is a “no details” accelerator. Build the core pieces that work and launch it. When customers complain, improve it. When something breaks, fix it. Just get it the f*ck out there.”

We decided to test this new model here at Mockcrunch offices to see how it works. We called on 3 of our developers to each build a Delicious competitor within one hour, threatening to chop their arms off if they weren’t able to get it done. After one hour, 2 of the 3 developers were sobbing through the process and couldn’t execute. One of our developers did get a working prototype made. However, it was hardly considered functional. A screenshot is below.

We of course let them keep their arms and told them it was all for research. Boy, was that a dark hour. We’re not sure if Hell Labs is taking the right approach. We certainly don’t agree with their methods. But at the end of the day, if it helps the economy, I’m sure we can all get behind that.

Take turns controlling your city with King For A Day, the Turntable.fm of local government

We have so many options these days for listening to music. Besides just pirating music, you can listen to ad based services like Pandora and Spotify, and there are even a few people that pay for their music. Last year, Turntable.fm gained traction as an application that allows you and your friends to be DJ’s in your very own virtual club. This was an excellent move by Turntable.fm’s creators because all your friends have such great taste in music, and really understand how one track leads into another. More recently, Thefuture.fm launched a service where you can listen to whole sets recorded by professional DJ’s. So, anyone with a laptop. The friend-dj trend has lead tech entrepreneurs to experiment with this crowdsourcing method.

King For A Day allows you and your friends to become leaders of local government. Just sign in with facebook, give permission to post on your behalf, and you have full control of your city. Choose which social services are funded. Plan public transit routes. Raise and lower taxes as you see fit. Force private industry into accepting your terms through rezoning. Think there should be more parks? Build some. Want a mountain vista outside of town? Terraform the land to your liking. City employees are at the ready to do your bidding.

King for a Day’s founder James Sperman is a 21 year old economics student at Grinnell college in Grinnell, IA. We spoke with Sperman about his inspiration for the site.

At King for a Day, we were looking for ways to make government more democratic. I believe that people have their best interest at heart, and most people know what’s best for society. The next time your friends complain about their local government, you can ask them, “Think you could do better?”

Sperman added, “If things get boring, you can always call in a natural disaster.”

Dropbox fires back at Google; launches Search Engine

Today, Google and Dropbox are playing a game of business Battleship. Google just announced a Dropbox clone called Google Drive, a service that allows users to store and share files in the cloud. Now Dropbox, the service that has truly innovated and lead the cloud file storage market for years, unfortunately has to worry about Google stealing some of their market share. That doesn’t mean that Dropbox hasn’t been preparing behind the scenes to make a move of their own.

Shortly after Google made their official Google Drive launch announcement, Dropbox CEO Drew Houston sent this bombshell tweet. We reached out to Drew for more information.

The search engine will be called Searchbox. It is described as the “Dropbox of Google Search”. When we asked Drew to give us some details of the search engine, here’s what he had to say.

We can’t give you all the details just yet. But basically, we made a fantastic multi-platform web search engine. It’s very simple. It has a logo and an input box right below it. You can type in anything you want and within a split second, you’ll receive a paginated list of the most relevant web pages based on your search terms. But the killer feature is that the search results will sync between all of your devices – iOS, Mac, Windows, etc. So for example, I could search for “nyan cat” using Searchbox on my laptop, open up the Searchbox app on my iPhone and view the results. We think this will monumentally change the way you search the web.

A press release is expected to be released shortly with the official announcement.

Ridiculously photogenic guy gets his own photo app

Zeddie Little was just another runner until he was caught on camera running a 10K. Zeddie’s photo stands out among the more serious and focused faces of his competitors. Zeddie is now ready to go the distance with his own mobile application.  “RPG and Me” inserts Zeddie’s beaming face into your personal photos. Take Zeddie to the zoo. Zeddie at Mt Rushmore. Zeddie at Aunt Cathy’s birthday party at Bucca di Beppo. Zeddie does love Italian. 

Ironically enough, Zeddie was planning on becoming an app developer anyway. Although he thought he was learning Objective C, he was actually just completing reCAPTCHAs for 6 months, meaning that time was not entirely lost. Zeddie’s original revenue model was to create value for users that they would pay for, but he will now be using the much more reliable aquisition strategy. Dave McClure of 500 startups has lauded this strategy as genius, and is planning on giving the fourth offer to buy RPG and me.

Zeddie’s business partner and startup homeless person Brody “TheBomb” Dotcom is handling these negotiations.  “In order to maximize the profit for our investors, we will be turning down the first six offers without hearing them.” One of the essential parts of the business strategy is to keep the actual number of users secret. “Traditionally, the cards you hold close to your chest are revenue. Since revenue isn’t even a factor anymore, we have to be able to keep some kind of secrecy. We’re going to do that by not releasing the size of our userbase, or the location of our developers. We’ve actually moved them from Daly City to a third world country to keep them from being poached”

When asked if this revenue strategy might not work if there is a new tech bubble, Dave McClure responded by putting a black bag over my head, throwing me in a van, and I was never heard from again.

Macaulay Culkin Becomes Latest Celebrity Startup Investor

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Macaulay Culkin is most well-known for starring in the blockbuster Home Alone movies in the 1990’s. Macaulay has since explored many acting roles, none of which could help sustain the initial super-stardom the actor experienced as a child. His latest move has taken him into the world of angel investing, as Macaulay has now funded more than 14 companies.

Macaulay is starting to create some waves in the startup world, quickly taking on many new investments, seemingly with no regard for financial or market potential. His latest investments include Paint Can Pendulum, LLP, a color swatch sharing social network, Mini-Auto Trader, a Hot Wheels marketplace, and Dancing Mannequins, Inc, a natural-language machine learning algorithm.

We asked Culkin what he looks for in a Startup. “I look for technologies I can associate with. If it means something to me, it will likely mean something to many others. I’m an emotional investor, and there’s a real need for that in this industry”, he said.

What will Culkin invest in next? “I’m looking for some companies that are disrupting hardware retail, pizza delivery and feather machine distribution channels. These are ripe for innovation.”

Top 7 Reasons To Start Another Daily Deals Site

If there is one business model that has proven successful over the last few years, it’s the daily deals model. Spearheaded by the billion dollar juggernaut, Groupon, daily deals offerings have become commonplace among local restaurants, spas, entertainment venues, and much more. Groupon’s massive adoption spawned daily deals clones; many of them finding their own success, such as LivingSocial. So why should you build a website to compete in this market?

1. Only 1,791 clones

In a recent article from DailyDealMedia, there is said to be 1,791 Groupon clones in the U.S. However, on average, every new startup idea has been done 3,128 times.  Odds are already in your favor. Also consider that the current U.S. daily deals market is sitting around $2-3 Billion and projected to at least double within 3 years. Now, even if all 1,791 competitors obtained an equal share of the market, you’re still looking to pull in over $1.7 Million annually. Not bad, champ.

2. People are desensitized to email

Between Facebook notifications, coupons, newsletters, questions from your parents, updates from sites you don’t visit, and spam, people have moved from unsubscribing to anger to acceptance. There’s no better time to blast the poor saps with daily local coupons to their sad, uncontested inboxes.

3. The name doesn’t matter

Groupon – group coupon. Clever, right? They set the bar pretty high. Then LivingSocial bursted on the scene, giving Groupon a run for its money and becoming the number two daily deals site. LivingSocial tells me nothing about anything. It has absolutely no relevance to deals, coupons, emails, or discounts. I’m also failing to understand how being an extrovert is a qualification for 50% off tacos.

Nonetheless, the service is continuing to grow at a rapid rate. Name your daily deals site whatever the hell you want. Megadealioso? FaceMonster? It doesn’t matter.

4. You can be CEO and wear nothing but Whitey Tighties

Take a look at Andrew Mason, Groupon’s CEO hard at work.

5. No business skills or technical skills are required

By simply mirroring Groupon’s entire business, there is very minimal work required. In fact, we recommend copying Groupon’s HTML (just Right Click on their page and select View Source), paste it on your website, and change the logo. We’ve seen brand new Groupon clones go from nothing to an entire working business in a matter of a few hours.

6. No one has tackled “gotcha” daily deals

There is a wide open opportunity to attack the bait-and-switch daily deals model. The way it would work is simple. You advertise a deal that is seemingly too good to be true, allow users to buy in, and once it becomes “unlocked”, users will be presented with text flashing “You Lose!” on their screen. Though you would legally have to void their transaction, you create a sense of excitement and mystery to every deal.

7. No matter how the coupon performs, you profit

There have been quite a few stories of Groupon deals going horribly wrong. But it doesn’t matter. Your business will make money either way.

Based on our projections, we expect to see 2-3 times more Groupon clones in the coming year. If there was ever a time to ride a trend, it’s now. So put down your Cheetos, pause World of Warcraft and go make a billion dollar company, then finish those Cheetos and level up on a Yacht.

Klout Announces +Kompensate: Prove Your Self-Worth Offline

In an effort to provide more value to its users, Klout is announcing new measures to further its mission. Here is a statement from Klout about the new move:

Let’s be honest. The service we provide is e-peen. So far, we’ve only been able to capture that from the online world. We know some of you also have trouble proving your worth offline. We want to bring your self affirmation from the real world to the online world. Your twitter followers don’t know that you drive a BMW. Your Tumbler readers don’t know that you wear a Rolex, or that you bought your Speery shoes from Zappos, and we know you want them to. We call it +Kompensating.

Now you can get the maximum influence from your overpriced status buys. Klout will be verifying your purchases through a receipt scanning app available on Android and iOS devices. If scanned on an iOS5 or Android ICS device, you will get extra points. If you’re suspected of faking a receipt, or buying knock offs, Klout has hired people to gossip about you online behind your back.

People also work hard for fancy sounding titles, and you’ll be able to translate them directly to your Klout profile. Show off that position that you’ve worked diligently for, like Assistant Floor Manager, Senior Forklift specialist, Executive Bellhop, or CEO/Blogger at your very own sole proprietorship.

Most people define themselves by their crowning achievements, even if they happened 20 years ago. Far be it from Klout to ignore that. We spoke with Rodney Clingerman, who was Prom King and captain of the football team at Hillside High School in 1992.  “I hate that people don’t remember that I won state. It’s like they’ve never been to a high school football game or something. Now with Klout, people have to recognize how much I own, like Pauly Shore.”

Some users will have the option of doing the opposite and taking their online Klout to the real world. Klout is selling stickers and patches with your Klout score on them. The stickers will be a great addition to the backs of laptops everywhere. Another Klout user gave us an interesting use of the Klout patch. “I wear my Klout Score patched on American Eagle shirt to the club.  Now the honeys know that the boss has arrived. “

Airbnb Launches New Service Targeted at the Homeless

Since launching in 2007, Airbnb has grown its userbase and became a wildly successful online marketplace. Its users find the service not only money-saving, but makes travel more interesting. Their service is, of course not possible without homeowners. With homeownership declining, Airbnb has had to get creative to find new markets and revenue streams.

Today, Airbnb announced the launch of Boxbnb, a new service targeted at the exact opposite of its current market; the homeless. Boxbnb allows property owners to list areas around their homes and businesses for vagabonds and itinerants to spend a few days. Feedback can be left for the property owner and the squatter. It is currently being tested in the San Fransisco bay area.

To perspective from the homeless, we spoke with Tarnose Cohen, a former pets.com employee. “Really, my main spot is under the overpass near the 101, but its nice to get a change of scenery every once and a while. I don’t have any money, but sometimes I pay by capturing squirrels or yelling at the garbage men when they don’t put the cans down properly. I paid one nice family in jars of my own feces to use as fertilizer.”

Restaurant owners have even bought in on the new service. Frank Spidelli, owner of Frank’s Diner on Irving Street recently listed the alley behind his diner on Boxbnb. “We had a real stray problem back there. Dogs howling and cats screeching. Then this guy from Boxbnb took care of them. He said his name was Sir Digby Chicken Ceaser. I don’t know what happened to the strays, and I didn’t ask neither. Just happy to have them gone.”

This move by Airbnb has prompted other startups to tap into this previously ignored market. Zipcar will soon be experimenting with Zipcart, where the homeless can use shopping carts only when they need them.