Growing like weed: Pot tech startups bloom as Pacific NW becomes hub for cannabis innovation

Growing like weed: Pot tech startups bloom as Pacific NW becomes hub for cannabis innovation

11:58am, 20th April, 2019
An example of iUNU’s computer vision technology for monitoring cannabis and other indoor agriculture operations. iUNU’s cameras and AI monitors minute movements in plants to increase greenhouse efficiency. The company is based in Seattle. (iUNU Photo) If you happen to be searching for pot sales analytics today, on the annual celebrated by marijuana aficionados, look no further than the Pacific Northwest. Seattle startup , a marijuana retail business data intelligence provider, knows that sales grew by 111 percent on this day last year. , a Kirkland, Wash.-based cryptocurrency company serving the cannabis business, found that dispensaries in Washington, Colorado, and California saw a 91 percent increase in customers during last year’s festivities and a 22 percent increase in average transaction value. Headset and POSaBIT are just two of countless cannabis-related startups based in cities such as Seattle, Portland, and Vancouver B.C. Not only has this region been “the epicenter of cannabis culture in North America,” but it is also a “hub for innovative tech companies,” said , who recently an executive role at Amazon to become CEO at Seattle-based marijuana discovery platform . As a result, Leslie said Seattle is “well positioned” to be a cannabis tech hub. That’s helped along by the Northwest’s granola-crunchy, free-spirited culture, which is also somehow home to a Type-A, finish-it-yesterday tech culture. “People in this area get it,” said , POSaBIT’s co-founder and CEO. “They understand [cannabis] is a true business opportunity. As I travel around the United States … it blows me away on how the social stigmas and everything around cannabis are so much stricter.” Hamlin said he loves being in Washington, an epicenter of technical talent thanks to homegrown companies such as Amazon and Microsoft, for giants including Google, Facebook, Oracle, Uber, and others, and hundreds of smaller startups. Sure, the Bay Area is seeing a similar cannabis tech renaissance thanks to its own blend of expertise and culture. But Washington legalized recreational pot six years before California. That gave Northwest cannabis tech companies a head start in learning the industry’s needs and developing their products and business models. One of POSaBIT’s cryptocurrency point-of-sale units for cannabis retailers. (POSaBIT photo) The cannabis business is growing up — the legal marijuana industry grew to in the U.S. last year — and the tech companies serving pot enterprises are growing right along with it. And where cannabis-tech companies have typically sought to connect a fragmented, cash-only business emerging (more or less) from the black market, many are now talking about even more sophisticated systems — AI, computer vision, cryptocurrency and big data. Cannabis tech is entering a new era, and the Northwest is a key hub. Call it “Northwest Cannabis Tech 2.0.” “You’re seeing a second wave of noise,“ said , the co-founder and CEO of , a Seattle-based company that uses artificial intelligence and computer vision to increase the efficiency of greenhouse operations, including indoor cannabis farms. ”What you’re seeing is a market that’s become much more mature than the other markets around the country, around the world.” In Seattle alone, there’s Leafly, the online cannabis directory, which was bought by Seattle cannabis investing firm in 2011. Just across downtown in Capitol Hill is , another online cannabis directory, acquired in 2016 by Nesta.co, a Canadian pot private equity firm. In March, , a Redmond, Wash., provider of cannabis point-of-sale and tracking software, Seattle pot sales software company Soro, which came out of beta only last year. Together, the companies have set out to build what Soro founder and current Dauntless chief product officer calls “an entire ecosystem around what it means to be a cannabis business.“ There are plenty of British Columbia tech companies as well, and they’re theoretically on steadier ground because Canada legalized recreational pot at the federal level last year. One of the most prominent is , the medical marijuana manufacturer also owned by Privateer Holdings and helmed by Privateer co-founder , who upwards of $31 million in compensation last year — more than Satya Nadella or Jeff Bezos. And to the south, there is, of course, Portland, which has its own celebrating the city’s Bohemian sensibility and is perhaps an even pot-friendlier town than Seattle. There, you’ll find , a point of sale product for dispensary owners, as well as the pot genetic testing company , among others. Phylos Bioscience sells a kit that identifies cannabis plant seedlings seven days after germination. The company is based in Portland. (Phylos Bioscience Photo) Anyone who got a front-row seat for the dot-com boom of the 1990s will surely recall all the hype — big words and jargon that, as it turned out, weren’t backed by actual revenue. By the end of the decade, tech stocks imploded, wiping out a wave of tech 1.0 companies whose shares had once soared. While there hasn’t been a pot-tech implosion (at least not yet) and there is certainly still plenty of hype, Greenberg said cannabis customers are demanding better tech, which is placing more demand on vendors to move beyond talk and develop fast, powerful software. “You have to really perform in Washington,” said the IUNU CEO, adding that pot tech companies in this new phase increasingly face “pressure to put up or get out.” That pressure, and the expertise of startup founders and workers jumping ship from Microsoft and Amazon to work in the cannabis business, means Northwest tech companies typically build very solid pot software, Greenberg said. POSaBIT CEO Ryan Hamlin. (POSaBIT Photo) “I’d definitely put the companies in the Northwest in a favorable position,” said Greenberg, whose company $7.5 million in February in a round led by Bootstrap Labs and NCT Ventures. Total funding in IUNU is more than $13 million. “You’re going to have a lot of winners and successful companies in the Northwest around that tech,” he added. POSaBIT began trading April 8 on the Canadian Securities Exchange under the ticker symbol PBIT. It opened at $0.28 per share and closed Friday at $0.37 cents per share. U.S. pot companies such as POSaBIT have been flocking to the CSE because it’s far more liberal than other exchanges when it comes to cannabis stocks. POSaBIT makes it possible for customers to walk into a cannabis store and convert their cash to Bitcoin, which they can then use to buy pot. Because of federal prohibition, legal cannabis is still a cash-only industry, which has produced any number of headaches, from difficulty banking cannabis revenues to the security concerns that come with any cash enterprise. Hamlin, POSaBIT’s CEO, said a lot of those problems can be solved with cryptocurrency. POSaBIT was born during a campfire chat with friends about about the technology needs of the emerging marijuana business. “It was the combination of, OK — cash-only problem, massive industry, cryptocurrency. How could they all come together?” said Hamlin, a former Microsoft general manager. “And that’s when the ‘aha!’ moment was. Well, you can use a debit and credit card to purchase cryptocurrency. And you can use cryptocurrency to buy cannabis.” Leafly co-founder Cy Scott and his colleagues celebrate the App of the Year award at the 2014 GeekWire Awards. (GeekWire File Photo) POSaBIT launched in 22 Washington cannabis stores in 2017. In 2018, it had expanded into Colorado, California, Oklahoma and Nevada. By the end of the year, POSaBIT had processed nearly $22 million in sales through its payment system. Like Greenberg, Hamlin said his cannabis industry customers are demanding a new level of sophistication from his software. One of the ways he’s trying to meet that need is to leverage bitcoin transactions to gather anonymous customer spending data and provide his clients with market research, a much-coveted service in an industry that has been cash-only since, well, at least the Monterey Pop Festival. “I can tell you precisely who a manufacturer is,” Hamlin said. “I can tell you (the ages and genders of those) buying. Males from 45 to 55 tend to buy edibles and they tend to buy them on Thursday night and they also live in these zip codes … that’s a gold mine.” Headset, the Seattle pot analytics and market data company started by Leafly co-founder , is providing similar metrics. Last month, Nielsen, best known for its TV ratings, and Deloitte forged a with Headset to provide U.S. and Canadian pot manufacturers with one of their first looks into how their customers think about cannabis, how often they use it and which brands they buy, among other data. Headset is an example of a Pacific Northwest pot tech ecosystem that’s already maturing. Scott originally founded Leafly in Irvine, Calif., but the company relocated its headquarters to Seattle after Privateer Holdings — the Seattle-based marijuana investment firm — acquired Leafly. Scott has stuck around town and is building another fast-growing cannabis tech company. Hamlin, POSaBIT’s CEO, noted that “you come to Washington and you don’t think twice.” “It’s part of doing business, so to speak,” he said.
More cash for Pacific Northwest startups: Founders’ Co-op raises $25M fund, its largest ever

More cash for Pacific Northwest startups: Founders’ Co-op raises $25M fund, its largest ever

10:15am, 15th April, 2019
Founders’ Co-op Managing Partners Chris DeVore and Aviel Ginzburg. (Founders’ Co-op Photo) More investment dollars are flowing into the Pacific Northwest startup ecosystem thanks to a new fund from . The Seattle-based early-stage venture capital firm just closed a $25 million fund, its fourth and largest ever since launching in 2008. Founders’ Co-op will follow the same playbook it has used in years past: being the first institutional check and anchor tenant in the seed round for companies it bankrolls. The firm focuses on writing checks in the $250,000-to-$750,000 range for budding startups across the Pacific Northwest. It has backed more than 90 startups, including companies such as Remitly, Outreach, Auth0, Crowd Cow, Apptentive, and others. Those companies have collectively gone on to raise more than $1.5 billion in follow-on capital. “We aren’t thematic investors but are focused on technical founding teams solving hard problems into which they have unique insights, which tends to lead us to enterprise software, from developer tools up through workflow automation and systems of intelligence,” DeVore told GeekWire last week. GeekWire previously reported on this fund , when Founders’ Co-op raised the initial dollars. The last clocked in at $20 million four years ago, which followed a $7.7 million fund in 2012 and a $2.7 million original fund. DeVore and Andy Sack started the firm in 2008, along with partner Rudy Gadre, a former Facebook and Amazon.com executive. Sack stepped away from day-to-day duties several years ago, leaving the Seattle firm in the hands of DeVore, who recruited Seattle entrepreneur , co-founder of Simply Measured, to the team as a venture partner. Ginzburg was promoted to general partner last year. Sack and Gadre are still involved as venture partners. Many in the Seattle tech economy have the lack of homegrown capital available in the Pacific Northwest over the years. DeVore is one of the biggest advocates looking to change that imbalance. “Somehow, all of a sudden, it’s ten years later,” DeVore wrote in a blog post. “We’re still doing the same thing we’ve always done, but the world has changed around us.” In his blog post, DeVore noted the growth of Seattle as a tech hub, with Amazon, Microsoft, and a flurry of remote engineering outposts helping increase the talent pool exponentially: “We’ve spent the last ten years honing our craft and building a community of founders, investors and mentors dedicated to our shared mission of making the Pacific Northwest the best place in the world to start a software company. Over the same period, our regional startup ecosystem has grown and changed in ways we never imagined, offering a more diverse and talented pool of potential founders than we’ve ever seen. As with our first fund back in 2008, it looks like we’re heading into another cycle of uncertainty in the global economy. We expect markets to slow, or even contract, over the next few years. We expect the last several years’ run of easy money for startups to end along with it. Putting that all together, we know for sure that the founders we back in this next cycle will be some of the best we’ve ever seen.” in Founders’ Co-op mostly come from the Pacific Northwest and are a mix of founders and tech executives, plus family offices and foundations. The State of Oregon, via its Oregon Growth Board, invested again in the fourth fund. DeVore also runs Techstars Seattle, which its 10th class in February. Ginzburg, meanwhile, leads the Alexa Accelerator, another Techstars program that Amazon helps operate in Seattle. Founders’ Co-op, Techstars Seattle, and the Alexa Accelerator are all run out of the University of Washington’s Startup Hall.
Startups vie for gadget greatness: Vote for the best hardware innovation at the GeekWire Awards

Startups vie for gadget greatness: Vote for the best hardware innovation at the GeekWire Awards

12:12pm, 10th April, 2019
Hardware can be a , but the Pacific Northwest is replete with ambitious gadget makers looking for creative solutions to problems of all sorts. Private email servers, heart monitors, smart home gadgets and a drone well-versed in operating in tight spaces — this year’s crop of finalists for Hardware/Gadget of the Year at the 2019 GeekWire Awards has it all. Led by serial entrepreneurs and alums of some of the world’s biggest companies, the finalists — Bardy Diagnostics, Helm, Lubn, Vtrus and Wyze Labs — are aiming to upend their markets. We’ve opened voting in 11 GeekWire Awards categories, and community votes will be factored in with feedback from our more than 30 judges (see ). On May 2 we will announce the winners live on stage at the GeekWire Awards — presented by — in front of more than 800 geeks at the Museum of Pop Culture in Seattle. Community voting ends April 19. Last year, the high tech manufactured housing startup Blokable took. Other past winners include , , and . Read about the finalists and vote on all the categories while you’re here. And don’t forget to , as the GeekWire Awards sell out every year. The Carnation Ambulatory Monitor, or CAM for short, is designed to be worn comfortably for approximately a week, with the goal of improving patient compliance. (Bardy Diagnostics Photo) Bardy Diagnostics wants to change the way medical professionals monitor heart conditions. The Seattle company makes a non-invasive cardiac monitor patch that helps detect arrhythmia. The Carnation Ambulatory Monitor, or CAM for short, is designed to be worn comfortably for approximately a week, with the goal of improving patient compliance. Last summer, Bardy of undisclosed size to grow its sales team and monitoring services, advance research and development programs and accelerate development of artificial intelligence diagnostic capabilities. The company recently through an alliance with JNC Medical, a medical technologies distributor based in Ottawa, Ontario. News of the expansion came just a few weeks after Bardy said it reached a for the CAM patch in January. Bardy is led by Gust Bardy, a long-time cardiac electrophysiologist who also serves as a clinical professor of medicine, cardiology, at the University of Washington and is the director of the Seattle Institute for Cardiac Research. Bardy sold his previous company, Cameron Health, to Boston Scientific in 2012. The Helm. (Helm Photo) This Seattle-area startup wants to redefine email at a time when privacy and security issues related to hosted by big tech companies in the cloud . Helm, formerly known as Privacy Labs, last year that lets consumers send and receive email from their own domain, in addition to saving contacts and calendar events. The company’s personal physical email server puts it squarely in the crosshairs of tech giants such as Google. The device is about the size of a router and looks like an upside-down book placed on a table. It connects to a home network and pairs with a mobile app that lets users create their own domain name, passwords, and recovery keys. Helm supports standard protocols and works with regular email clients such as Outlook or the Mail app, with encryption protecting connection between the device and the apps. According to the , the device is sold out right now, but Helm promises to make more. Buyers can reserve their spot in line for $99. The idea comes from and , two entrepreneurs who previously sold a security startup. The co-founders, based in Bellevue, Wash., raised from top venture capital firms in 2017. The LTE smart key box by Seattle startup Lubn won a 2019 CES Innovation Award in the smart home category. (Photo: Lubn) Lubn is part of a movement toward a smarter lock-and-key solutions. The Bellevue-based startup is developing hardware and software products designed for property managers, retail store owners and others to remotely manage who comes and goes at their properties. Its main product is a smart key box with visual authentication that connects to the cloud via 4G LTE. The LubnBox was a at the giant electronics show in Las Vegas this past January and last year the company show. Lubn also offers an app and dashboard to let users remotely control who can enter their properties and at what times. As a father who was juggling a career at Microsoft while also managing multiple rental properties scattered internationally, Lubn co-founder and CEO Yuan-Chou “YC” Chung got the idea for the product from his own experience. He wanted a simple solution for controlling and coordinating access to the properties to give him more time for family. He teamed up with fellow co-founders Autumn Li, who is the company’s CTO, and Charles Chang, adviser, to create Lubn. Smart locks are a hot technology, with Amazon’s in-home package delivery program garnering global attention. Bellevue, Wash. startup Drones are everywhere these days, but it’s still unclear what their best use will be. A Seattle startup is seizing on the technology to conduct precision inspections of industrial facilities. Vtrus, based near the Fishermen’s Terminal in Seattle’s Interbay neighborhood, has developed an indoor autonomous drone known as the ABI Zero that can navigate its way around the tricky surroundings of a warehouse environment without the need for a remote operator or GPS waypoints. The company, which has skirted Federal Aviation Administration restrictions on outdoor drone flights because it works exclusively indoors, is to continue refining its offerings. ABI Zero can conduct an aerial survey for as long as 10 minutes, and then return to its base station for charging. The base also serves as a WiFi-enabled link for receiving streaming data from the drone and relaying it to Vtrus’ cloud service. Vtrus takes advantage of a computer vision technique called SLAM (Simultaneous Location and Mapping), which enables drones to build a high-fidelity map of their surroundings. Thirty times a second, the SLAM software keeps track of 300,000 depth points captured by an array of cameras and sensors. , CEO, previously co-founded Surreal Vision, a computer vision startup that , Facebook’s VR subsidiary. He went on to work at Oculus VR for more than a year as a research scientist in Redmond, Wash., then helped lay the groundwork for Vtrus, which he launched in 2017 with chief technology officer and chief design officer . Fresh off earlier this year, Kirkland, Wash.-based Wyze Labs is making waves in the smart home security market with its low-cost camera. Wyze was founded by Amazon veterans Yun Zhang, Dave Crosby, Elana Fishman and Dongsheng Song in 2017. Later that year, the startup launched its camera with 1080p HD video and 14 days of free cloud storage. At $19.99, the price severely undercut the group’s former employer, as Amazon for $119.99 around the same time. Fishman of GeekWire’s Elevator Pitch this past summer and said at the time that the company had sold over a quarter-million units in less than six months. The company launched another piece of hardware, the $29.99 , in May 2018. Join us at the 2019 GeekWire Awards on May 2!
How a lack of regulatory clarity puts U.S. cryptocurrency startups at a disadvantage

How a lack of regulatory clarity puts U.S. cryptocurrency startups at a disadvantage

5:20pm, 28th March, 2019
Kiran Raj, chief strategy officer of Bittrex, spoke about blockchain regulations at the TF Blockchain Conference in Seattle. (GeekWire Photo / James Thorne) Founded by former Amazon and Microsoft security engineers, cryptocurrency exchange defies the Wild West reputation of the blockchain world with an appetite for government oversight. What does Bittrex want more than anything? “Regulatory clarity,” said , chief strategy officer at Bittrex, a Seattle-based company that allows users to buy and sell 200 different currencies, such as Bitcoin and Ethereum. Raj said that current regulations put U.S. startups at a disadvantage. “It’s really difficult to complete with an unlevel platform,” Raj said during a conference hosted by TF Blockchain Conference in Seattle. Raj said the lack of regulatory clarity in the U.S. has hurt innovation and forced startups, including Bittrex, to set up shop in Europe and elsewhere. Bittrex has a European branch that operates within the EU’s legal framework. “It’s not too late for regulatory clarity,” he said. “There are ways to get some of this innovation back to the U.S.” Raj is not alone with his request. Several members of the House of Representatives to SEC Chairman Jay Clayton, asking for plans to regulate cryptocurrency. This past November, Clayton said cryptocurrency ETFs (exchange-traded funds) won’t be approved until “market manipulation” concerns are addressed, according to . Raj’s perspective on regulation isn’t too surprising. He came to Bittrex after working at the Department of Justice and the Department of Homeland Security. Raj was at the DoJ when the FBI was working on taking down Silk Road, an online marketplace known for using Bitcoin to sell illegal drugs. Bittrex co-founders , and bring over 30 years of experience in security engineering at Amazon and Microsoft. “Our executive team is probably one of the oldest teams in crypto,” said Raj. But that experience has also given Bittrex the ability to help other blockchain companies play by the rules, such as by performing background checks on users to comply with anti-money laundering laws. Raj said the founders set out to build an exchange for blockchain-related products with security in mind. After starting Bittrex in 2014, the founders ran the exchange as a side business until leaving their previous jobs in 2016 and 2017. Raj was optimistic that regulated cryptocurrency exchanges will eventually win out over unregulated ones. “We’re hoping for a level playing field in the long term,” Raj said. “We know we can compete. We just have better technology.”
Watch pitches from 13 startups at the Portland Incubator Experiment Demo Day

Watch pitches from 13 startups at the Portland Incubator Experiment Demo Day

12:35pm, 18th March, 2019
It was Pi Day last week, so naturally, PIE held a Demo Day. The , or PIE, hosted its first Demo Day in five years on Thursday as 13 Portland-area startups pitched their ideas on stage. PIE launched a decade ago as a startup accelerator inside advertising company Wieden+Kennedy, following in the footsteps of organizations like Y Combinator and Techstars. But it that model in 2015 as PIE co-founder looked to help the Portland startup scene in other ways. Last year, though, with a reimagined model as a nonprofit funded in part by Prosper Portland and the Inclusive Business Resource Network. PIE no longer invests capital in participating companies and offers participation and office space for free, with a focus on attracting underrepresented founders. It also moved away from the traditional three-month format, allowing companies to stay in the new space as short or long as they need. After spending several months grooming pitches and tweaking business models, founders from the fifth PIE cohort showed off their ideas last week to a group of investors and other community members. Several folks called out the diversity among CEOs and founders who pitched. “The startups presenting didn’t fit the ‘traditional’ pattern matching of the Silicon Valley startup narrative, which is to say there weren’t any 20-something, white, male coders in hoodies pitching,” noted reporter Malia Spencer. 1/9 I got to see my first demo day Thursday and it was a huge personal reminder for me on how important diversity in background and thought are in the people you surround yourself with — Jesse Reichenstein (@JReichenstein) Here’s a quick rundown of the companies that pitched, in order of when they appeared. You can watch the full pitches at the video above. delivers groceries from local farmers, butchers, bakers, and makers. empowers Latinas to live healthier lives. makes a back support integrated postural alignment system. helps companies create resilient cultures that scale. ​ is a social network connecting student athletes to community. helps support black entrepreneurs with funding. enables commercial architects, designers, owners and contractors to find materials and solutions for their projects. develops high-efficiency vertical farming. produces newsletters in Spanish to help inform voters. creates tools that make shopping according to one’s values convenient. develops cannabis vaporizer technology. ​ hosts the largest database of workspaces for remote professionals ​ provides insights on the comfort and accessibility of public places for plus-size people.
Seattle startup’s path to greatness could be this captivating walk through physical and virtual worlds

Seattle startup’s path to greatness could be this captivating walk through physical and virtual worlds

11:20am, 24th February, 2019
GeekWire’s Kurt Schlosser and his son find their way through “Wonderfall: Tale of Two Realms,” a Hyperspace virtual reality experience at Pacific Science Center in Seattle. (Jeff Ludwyck Photo for GeekWire) I tried to reach down and pet a cat that wasn’t real. And with that, 15 seconds into a 15-minute walk through the virtual reality world of “Wonderfall: Tale of Two Realms,” I was sold on what has built and continues to build at Seattle’s Pacific Science Center. In a 3,000-square-foot corner of the longtime facility, Hyperspace’s interactive exhibit is part of the broader in which the Science Center is offering space to startups as a way to show off local creativity and innovation to guests. Hyperspace is also looking to show off for and attract a broader investor audience as it has turned to the to raise as much as $1 million. Hyperspace CEO Jeff Ludwyck — who shared his vision on last year — and a team that has grown to more than 20 have been creating both the real-world physical walls and pathways and the in-game experience of “Wonderfall” for a year and a half. Plywood marked with neon tape disappears in game to become the buildings and rooms in a small village. Haptic touches including fans, heaters and vibrating floors are sprinkled throughout, along with touchable props such as books, a spinning globe and a bench to sit on. Jeff Ludwyck, CEO of Hyperspace XR, stands along what turns into the main cobblestone street inside “Wonderfall.” (GeekWire Photo / Kurt Schlosser) “You can’t have this at home,” Ludwyck said during a visit this week. “You’re standing on real cobblestone. Every little trick cements that immersion, without even really noticing. People come in all the time and go, ‘I felt like I was actually there,’ compared to sitting in your home where you know your coffee table is right there.” Hyperspace relies on inside-out tracking and has partnered with Microsoft on its Windows mixed reality platform. “Wonderfall” follows the story of a young girl named Elena inside the fantasy-magical experience. An experiment goes wrong for the would-be inventor and users get to help her fix it as she looks to re-establish contact with her parents in another world. Fifteen minutes of the 30-minute story arc are complete right now. Users do not have fully formed avatars — just virtual hands and a floating head — and there is no dual-player capability yet, so the interaction with the story is yours alone. Wearing a Samsung Odyssey headset and a high-powered HP Z VR backpack, I walked through with my 11-year-old son, Henry, to get a better feel for how the experience might appeal to the many schoolchildren who visit Pacific Science Center. Hyperspace has partnered with with Samsung and Microsoft on “Wonderfall.” Participants carry the computing power on their backs. (GeekWire Photo / Kurt Schlosser) Throughout the 15 minutes (which costs $15), I listened as Henry reacted and exclaimed over different aspects of the virtual world, shouting repeatedly over the dialog in the headset for me to “come here and check this out!” as we explored parts of the set at a different pace. Some of the more captivating touches involved the ability to catch virtual elements in our hands, such as firefly-like bursts of light or a small rotating planet or a little darting purple creature. Reaching toward certain stacks of books also released 3D illusions such as a dragon, a demon and a clipper ship — all swirling past our heads. A split view shows how the village in “Wonderfall” looks in actual reality, left, alongside virtual reality. (Hyperspace Image) “We tried to put sounds in different locations so you’re constantly trying to find things and look around the environment, and I noticed you guys basically got everything,” Ludwyck said after he watched our walk-through while not wearing a headset of his own. After following Elena out onto a virtual dock, where it looked like we were suspended high in the clouds, the experience came to a close and pronounced that the adventure was “to be continued.” It is here that Hyperspace will extend the physical set and the virtual game another 15 minutes in the months ahead. “So coooool,” Henry said as he removed his headset. “I wish it didn’t end!” As a normal kid who already struggles with disengaging from traditional video games, he clearly wasn’t ready to step back out of Hyperspace’s virtual reality. Hyperspace’s goal is to provide the platform for developers to create their content on and to get other venues to build out similar spaces. But the plug-and-play nature of it all could evolve greatly — and keep Ludwyck from expressing his carpentry skills late into the night. “We’re working with an outside manufacturer to build modular pieces so that a venue could have a kit, basically, of parts that could shape together for a bunch of different experiences,” Ludwyck said. “Walls, flooring, doors, props, all that stuff will be part of an almost LEGOs for VR.” Ludwyck said they have three venues lined up and three projects with outside development teams. He said Hyperspace has the team, the technology, the location and new locations and just needs to “hit the gas,” which is why the formerly bootstrapped company is keen on raising a round right now. According to the Wefunder page, the company projects being in more than 50 venues in five years. Hyperspace has placed props throughout “Wonderfall” which line up with what’s visible in VR. (GeekWire Photo / Kurt Schlosser) “We want to create an open platform that allows everybody to jump in,” Ludwyck said. “I mean, you should see the list of people … theaters, aquariums, all kinds of random groups are saying, ‘I want to build something like this, do you have the know-how and technology and everything to to do that?’ We’re excited to enable those.” Hyperspace’s Science Center experience has attracted more than 5,000 “travelers” so far. Other startups showing off their entrepreneurial process include , which brings children’s books to life in VR, and , which spent about a year at the Science Center, and will continue to use the space to demo its interpretive exhibits and educational products. “It’s cool because it matches really well with the Science Center,” Ludwyck said of his company’s work. “The whole mission of the Science Center is igniting curiosity and we do it all the time here. Whether a kid is interested in technology or maybe art side or creative, they get to go into this other world in their brain and go, ‘Man, I could really do this someday. I could build out fully virtual and physical worlds. So I think that’s what’s been so exciting about this.”
Silicon Valley investment firm Alpine SG acquires 6 startups, forms new Seattle-area marketing company

Silicon Valley investment firm Alpine SG acquires 6 startups, forms new Seattle-area marketing company

1:09pm, 14th February, 2019
ASG MarTech CEO Steve Reardon. (ASG MarTech Photo) , a Silicon Valley investment firm that acquires and then operates software-as-a-service companies, is swooping up six startups and forming a new marketing tech organization that will be based in Bellevue, Wash. The new company, called ASG MarTech, will consist of the six acquired startups and an existing Alpine SG portfolio company called Grade.Us. They will continue operating as standalone offerings as part of ASG MarTech, which will serve digital agencies and brands with a suite of marketing tools. Here are the six acquired startups, with descriptions from Alpine SG: and , managed by Mike Ciaglia, are software platforms for brands and agencies that allow firms to effectively and accurately monitor, test, measure and prove SEO strategies to their customer bases. , lead by CEO Ben Carpel, is an all-in-one online performance dashboard that helps marketers easily monitor and analyze vital enterprise data in one place. , founded by Jack Yu and Nori Yoshida, helps businesses operating multiple locations engage customers quickly and identify opportunities to improve through its monitoring and management platform. The business is a powerful complement to Grade.Us’s presence in the online reputation management market. , founded by Zach Anderson and Jeff Schwerdt, is a marketing platform that enables local business owners to easily control and expand their online reputation. , founded by Vitaly Veksler is a full-service social media management platform that offers both social media monitoring and scheduling of content. ASG MarTech will employ more than 50 people and will be led by CEO , who previously oversaw Alpine SG subsidiary Bill4Time and Grade.Us. “We are incredibly fortunate to be partnering with such quality businesses,” Reardon said in a statement. “Each business has been infused with the passion and energy of an incredibly talented founder and are well positioned to accelerate their already considerable growth.” Alpine SG is backed by Alpine Investors, a private equity firm. In September it Seattle startup Record360 and has bought 18 companies since 2016.
Q&A: Techstars Seattle leader reflects on a decade of accelerating startups, unveils 10th cohort

Q&A: Techstars Seattle leader reflects on a decade of accelerating startups, unveils 10th cohort

10:26am, 11th February, 2019
Founders from the Techstars Seattle 2018 cohort after Demo Day last year. (GeekWire Photo / Taylor Soper) The Seattle tech ecosystem has changed plenty in the past decade. New startups have grown or died off; the investment scene looks much different; and hometown tech giants continue to expand their footprint. But one organization has been a mainstay since it launched in 2010, offering a launchpad for early-stage startups to help entrepreneurs turn their ideas into full-blown businesses as part of an evolving tech scene in the Emerald City. today announced its 10th class, marking a milestone for the accelerator that has graduated 100 companies to date. Alumni of the organization — companies such as Remitly, Outreach, Skilljar, Bizible, Leanplum and Zipline — have collectively raised more than $700 million in investment capital. Most have built their startups in the Pacific Northwest, helping expand the entrepreneurial clout in the region. “Staying alive is the hardest thing to do in startup land,” said Techstars Managing Director . “We’ve been around for 10 years and have been lucky to be apart of some really great founder journeys.” Techstars Seattle is part of a larger Techstars network that spans across the globe and also features a Techstars venture capital fund and a . Techstars Seattle is based at Startup Hall at the University of Washington and shares space with the , a separate program co-led by Techstars and Amazon focused around voice technologies. Here are the ten startups in the newest class (Demo Day is set for May 7 in Seattle), with descriptions from Techstars, which provides $120,000 in funding in exchange for 6 percent common stock as part of the three-month accelerator. Continue reading for a Q&A with DeVore as he reflects on the longevity of Techstars Seattle and dishes on how the Seattle tech scene has changed. (Seattle) — interactive, customized machine learning training for industry engineers. (Seattle)— testing automation for complex SaaS tech stacks, made simple. (Denver)— identity & consumer intelligence for Asia-Pacific, built on Blockchain. (Cambridge)— augmenting the human brain with always-on personal assistants. Level — transforming access to credit and savings for the underbanked. (Miami)— customer experience platform for the $1 trillion freight forwarding industry. (Seattle) — access to the decentralized future. (Bay Area)— adding real-time intelligence to online communications. (Austin)— meeting familiar strangers. (Seattle)— the YouTube of AR content. Editor’s note: Interview edited for brevity and clarity. GeekWire: Thanks for chatting with us, Chris. It’s pretty cool Techstars Seattle launched 10 years ago and is still going strong. Chris DeVore: When we started out, the idea for an accelerator was kind of a new thing. Y Combinator started in 2005 and Techstars in 2007. We were the third version of Techstars — first Boulder, then Boston, then Seattle. Now there are hundreds of accelerators around the world and the speciation around the idea has gotten pretty tense. As the noise has grown, it’s been about figuring out what you are uniquely good at. Part of what that comes down to — and a lot of this is why we’re so focused on the role we play in the community — is that Seattle is uniquely excellent at a handful of things. It hangs off our anchor tenant companies and the University of Washington. It’s cloud infrastructure; e-commerce marketplaces; enterprise software; and things powered by data and machine learning. There’s also stuff around the edges — space and aerospace, digital health. That’s sort of the learning over the past 10 years. Just being an accelerator is not good enough. Just being a Techstars accelerator is not good enough. So what can we, in Seattle and the Pacific Northwest, do better than anyone else and how do we make that a promise that if you come to Techstars in one of these vectors, we’re going to give you an unfair advantage — not just regionally but globally. That’s the wheel we’ve been trying to spin. Techstars Seattle Managing Director Chris Devore. (GeekWire File Photo) GeekWire: When you say Seattle is uniquely excellent at certain things — what does that mean, and why does that matter? How does it help entrepreneurs? DeVore: As a founder-centric investor, all you’re really betting on is people. The combination of real domain expertise and enthusiasm for solving problems is the kernel of the founder. Despite the stereotypes, research shows that the highest-performing companies aren’t founded by 20-something kids right out of college. They are founded by people who’ve been in the trenches for a while and learned something about business, about the world, about problems. The kinds of problems in our ecosystem that gets people up to speed on tends to be about how software changes the world of work for developers or business professionals or somewhere in between. Amazon and Microsoft have helped attract amazingly talented people to the region from around the world who have a passion and expertise for those problems. If you look at the mentors and investors who make it work, they also came up often through those pathways. They were founders or they spent 20 years working on enterprise software at Microsoft. Their pattern recognition around what good looks like was hardened at some of the institutions that are producing founders. It’s a group of people that understands each other and communicates clearly and has a lot of built-in trust because they share a cultural foundation and passion for those kinds of problems. GeekWire: There have been so many accelerators and incubators and similar organizations popping up in recent years. How has Techstars Seattle kept it going for so long? What is the secret sauce? DeVore: Staying alive is the hardest thing to do in startup land. We’ve been around for 10 years and have been lucky to be apart of some really great founder journeys. We’ve built a community of founders who are themselves really successful, but who are also grateful for the role Techstars played in their success. They give back. They refer companies to us; they come and speak; they mentor. So over ten years, you build this incredible network of people who feel emotionally connected to the brand and community. I keep thinking about the flywheel — the compounding effect of surviving and thriving and playing a role in great people’s success, that keeps coming back to you in positive ways. GeekWire: You’ve been in a unique spot over the past ten years, launching an early-stage venture capital firm in 2008 (Founders Co-op) and then taking over as Techstars Seattle managing director in 2014. How have you seen the Seattle tech scene change? Is Seattle a better or worse place for a founder now? DeVore: There are two narratives. The first is business related. We got super lucky that Jeff Bezos decided to build his company here in downtown Seattle and is scaling headcount faster than I’ve ever seen. The magnetic pull of a high performing company for high performing people into the urban core across a broad range of dozens of businesses has been a massive injection of talent and energy to the Seattle urban core. Then, after what felt like a lost decade in the Ballmer years, Satya has done a similar thing with Microsoft. It felt pretty moribund, the Boeing 2.0 — the Lazy M instead of the Lazy B. Microsoft has become a more exciting and more fun place to work. Those two things have been incredible. That’s the rising tide that has lifted the boat of the entire region economically from a talent standpoint and and urban standpoint. The second narrative is around the livability of Seattle. When you look at the Bay Area, they have politically failed to deal with issues around growth and transit and housing. Seattle hasn’t gotten it right every time, but at the margin, when pushed, taxpayers and civic leaders have said ‘we really do need build a light rail system,’ or, ‘we really need to reconsider how we zone for scale and allow more housing to grow.’ So as the Bay Area has choked on its own growth, Seattle has made it possible to continue to grow and not price out absolutely everybody. Do we have work to do? Of course. Homelessness is a huge issue. But it’s hard to build a great city for work if it’s not a great city also to live in. Seattle leaders have done a good job of saying, ‘we need to do stuff to make this city a great place to live for everyone and not just a great place to make money.’ I think that’s an underreported narrative about why Seattle is winning more and more as an economic center. It’s because we’re doing stuff at the margins to make it a place that works for families and works for transportation. The partnership between business and civic leaders and taxpayers is what will set up the next 20 years of growth. Sunset over the Seattle skyline. (GeekWire Photo / Kevin Lisota) GeekWire: With all that talent rushing into the ecosystem, you’d think Seattle would turn into a startup factory. But that hasn’t been the case. Why not? DeVore: We are still wrestling with what I call a company town mentality. Most people didn’t come here out of school to start a startup. They go to New York City or San Francisco. Seattle is a place where people who already have a career come to further their career. And if you work at Amazon or Microsoft, you’ve had a great run and have a bunch of stock that is worth more every year. Not only is it a great place to get a job, but it’s a great place to keep a job because the companies here are succeeding. We still struggle with Seattle as a place where entrepreneurially-minded people choose to be, as opposed to just talented people who work in tech. The only way you turn the crank on that is to get more great companies that scale and raise money and go public here. We’ve had increasing success at getting companies to be founded here by folks who moved here to work for Microsoft and scaled their own companies and made themselves and their early employees really rich. That’s the story of how you get people out of an employee seat and into the founder seat. Our velocity is slowly increasing there but we’re still much more of a company town than some of the other major tech cities. I believe founders are people who don’t fit in the corporate world. Some people realize that sooner than later. Sometimes the golden handcuffs make it harder to unwind. But most founders realize they aren’t happy working for other people. In any population, that’s going be a small percentage. With more population of talent, the higher the number of potential founders. But it’s always going to be a tiny slice. Most people are happier having a job. GeekWire: With Techstars Seattle specifically, what have you seen change over the years? DeVore: Getting money into good companies has become easier in the Pacific Northwest. It used to be hard to find $1 million for a startup coming out of Techstars because there wasn’t a lot of angel money in the ecosystem and almost no institutional capital for seed-stage companies. In the last ten years, there’s been this explosion of micro-VC firms, particularly in the Bay Area, . We’ve had increasing success at getting out of town seed investors to commit real money into this ecosystem. Getting $1 or $2 million for a great startup is a lot easier than it used to be. The thing that’s gotten harder — or that we chose to make harder — is the realization of how lopsided the demographics of venture-backed founders have been. Companies aren’t just founded by white and Asian men. There are lots of founders who are women or African-American. Somehow we as a system need to think harder about how we’re sourcing and how we support founders from different kinds of backgrounds. It’s about challenging ourselves as a community and looking at the reasons for why we’re not being attractive to founders who look different. How do we open our doors and build relationships and change the narrative so that founders from different backgrounds see themselves in our work and vice versa? We agree with the consensus view, that it’s really important as investors who are trying to make change in the world, to figure out how to make change in your industry. . It’s a challenge we set for ourselves in the last few years that is a new kind of risk we’re trying to take and new type of innovation we’re trying to pursue with the platform as we mature. Seattle entrepreneur Andy Sack (left) stepped down as managing director of Techstars Seattle in 2014, passing the torch to Chris DeVore, his longtime business partner and co-investor at Founder’s Co-op. (GeekWire File Photo) GeekWire: What’s your pitch to founders? Why should an entrepreneur go through Techstars Seattle? DeVore: In general, we’ve seen businesses that are further along and founders who are more experienced join our platform over time. We’ve been able to progressively attract more and more experienced founders. They have more options, yet they choose to work with us. It is the realization that there are lots of things about building a business besides raising money that are important and needed. Founders who can self-assess their strengths and weaknesses and say, ‘hey, if I can find a hack in 12 weeks that super saturates my network in an area of weakness, how much is that worth to me? Is it a couple points of equity to transform in a positive way or mitigate a risk in a powerful way by accessing the Techstars network in Seattle?’ Founders who come to that conclusion are the ones who opt in to the program. The ones who say ‘I got this, I don’t need any help, all I need is money,” are probably not the right fit for what we do anyways. GeekWire: What do you think about the ? DeVore: It’s a super healthy push for clarity. We say ‘no’ all the time to founders — not because we don’t like what they are working on, but we don’t think their business is a fit for venture. The venture model wants one thing and one thing only, which is dominance and hyper-growth in a new category of innovation. And 99.9 percent of all startups do not fit that description. Broadly, the media narrative around startups makes it feel like every business that’s successful is a venture-backed business. There are tons of super successful businesses and make a ton of money for their founders and principals that never take outside funding. But the only thing I find wrong [about the discussion] is the idea that venture is trying to talk people into taking their money and they shouldn’t. I don’t think that’s ever been true. Good venture capitalists are very clear about what the model is good for and what it’s not good for, which is why they say no so often. They don’t want to be part of a business that’s not going to grow super fast and generate a liquidity outcome for everyone in 10 years. So anyone who thinks venture is somehow trying to get people, in a predatory way, to take money from businesses that shouldn’t doesn’t understand the economics and incentives in venture. GeekWire: You’ve seen thousands of pitches. Any learnings with how you invest or what you’re looking for? DeVore: Every time I’ve screwed up as an investor, I’ve fallen in love with an idea and used that as an excuse to overlook shortcomings in the founding team. When I really sit back and ask myself why I lost money on a deal, it’s because I knew there were things about my preferences around what founders I like to work with that were misaligned, but I ignored that because I was so excited about the idea they were working on. I keep coming back to the same thing. If I choose amazing people that are working in some direction that I think has economic merit, scale, and disruptive potential, those founders will find a way to make it work. is one of my favorite stories. The business they set out to build wasn’t working, but because they stuck together as a founding team and kept adapting and learning, they figured out how to find a productive thing. But that wasn’t because of where they started or the early metrics. It was because as humans, they were so committed and resilient and so gritty that they figured it out. And that’s really what you’re betting on. It’s a 10-year journey and it’s never always up and to the right. There are always setbacks and near-death moments. It’s the human capacity for resilience and persistence every time that will turn a bad investment into a good one.
‘Startups are really hard’: GiftStarter founder shares lessons learned after shutting down gifting service

‘Startups are really hard’: GiftStarter founder shares lessons learned after shutting down gifting service

6:00am, 8th May, 2018
Arry Yu. (Photo via ArryinSeattle.com) Find your “AJ.” Watch out for assholes. And know when to call it quits. closed the book last week on GiftStarter, her 4-year-old Seattle startup that aimed to personalize and simplify the process of purchasing gifts as a group. In an email to GeekWire, Yu said the biggest problem for GiftStarter was product-market fit. The company went through two accelerators, and 500 Startups, but struggled to acquire customers and nail down a robust business model. Yu let go of her employees in April 2016 but kept the company alive, even taking a major personal loan to try and fund it further. But she officially closed up shop last week. In a , Yu thanked her investors — local angels like Heather Redman, Gary Rubens, Rebecca Norlander, and Rudy Gadre — and other supporters. The entrepreneur also admitted that she should have shut down GiftStarter in 2016 and listed 10 lessons from her startup journey. “Startups are really hard,” Yu wrote. “Don’t do them light heartedly or just because it’s the trend. Don’t do it because you’re bored at work. Do it because you cannot exist in life without the big idea going big.” Among her other lessons for founders: “Find the ‘AJ,'” which is someone by your side “that’ll turn left and pounce 5 feet into the air when you just jump left” — a tip she learned from OfferUp founder Nick Huzar. She also advises startups to focus on finding a market before building a product; file proper documentation; and watch out for “assholes posing as advisors just for the vanity of it.” You can read the full post . Yu is now COO at , a Seattle startup formerly known as CakeCodes that lets people earn cryptocurrency by performing micro-tasks.