The cofounder of the open source microcontroller Arduino, Massimo Banzi, doesn't mince words. "Italy is the kind of a country where if you are young, you don't exist," he says. "It's a country run by old farts." Banzi decided not to accept the status quo.

Arduino was designed in Italy, by virtue of a foolish young Banzi on a quest for love. Today, Arduino is an enormously popular single-board microcontroller used to develop interactive objects.

The Power Of Love

Banzi's career hasn't followed a conventional path. "I was always interested in technology but I started using the Internet because I met this American girl when I was like 18," he says. "I wanted to write to her and the post would take three weeks. So I started using the Internet because I could email her. There wasn't even a browser. And that became my career for several years. So every time I get a passion about something I try to do it on the side and it turns into my job. It's also a curse also because you can never have a hobby."

Banzi trained as a electrical engineer, but always had an interest in design. Ten years ago he was teaching interaction design at the now defunct Design Institute in Ivrea. Arduino started out as a tool to allow Banzi's design students, most of whom has no technical background, to use technology in their projects.

"It was good to start working with design students because they make beautiful products," says Banzi. "Engineering students are very attracted by the technology itself. Design students are interested in what people are going to do with the technology. There's a lot of people who if you had told them six months earlier, 'You are going to program a microcontroller' they would have said 'I'm not a nerd. There's no way I'm going to do that.'"

The Arduino Legacy

Arduinos take inputs from a variety of switches and sensors and can control lights, motors, and other physical outputs.

Microcontrollers are used in all kinds of hacker projects: Musician Imogen Heap's musical glove and fish on wheels. Banzi estimates that there are now 1.5 million Arduinos in the wild matched by a similar number of clones and variations on the original microcontroller.

Banzi, and therefore ultimately Arduino, was influenced by designers like Germany's Dieter Rams and Italian Achille Castiglioni. "First of all (Castiglioni) said a designer should never take themselves too seriously so you should just really laugh. A lot of designers, they take themselves very seriously but their output is not as relevant as Castiglioni, who was always laughing and making jokes." Arduino was actually named after a bar Banzi frequented.

Advice For Young Technologists

Banzi's favorite Arduino projects these days come largely from the fashion industry. "For us wearable is a lot about fashion," he explains. "An Italian fashion designer made a corset that actually teaches you how to breathe properly. It measures the way you breathe with sensors and then kind of pushes you in different paths. Somebody else made clothing that can adjust your posture when you are using the computer."

I asked Banzi what advice he would give to his 20-year old self. "Well, it would be mostly about self-confidence," he said. "Arduino started off because I worked on a number of projects but I never had the will to just go ahead and run with something. I stopped caring about what other people thought or did and I just did my own thing. A number of people in the technology world they sort of insulted me and told me that I was an idiot and I thought 'Okay, I might be onto something because of all these people telling me that I'm wrong.'"

Banzi is a big believer in following your own path. "When I was was 20 I was much more focused on having a career and following a path and staying with a sort of a system. At some point I stopped caring about that. I changed jobs. I had different experiences. In the end I started doing whatever felt good to me. There's a friend of mine on Facebook from when I was 15, who is like one year old than me, and he's followed this very corporate-type path and then I looked at a picture and he looks like he's 60. So I think at least I kept a little bit younger than him. At least I did whatever I wanted. "

A favorite of Banzi's among the current generation of Arduino entrepreneurs is Josef Prusa. "Josef Prusa is a 22-year-old guy from the Czech Republic who is actually the designer of one of the most well-known open source 3-D printers," he says. "He started off a teenager playing with Arduino and then he started to make a 3-D printer, started to make his own designs. No background in technology. He studied economics. So he dropped out of university because he was not matching what he was doing and he built up this little company and designed these 3-D printers."

It's clear that Banzi sees a little of himself in Prusa. "The biggest advice is that if you have to make a huge mistake do it because you decided so," he concludes, "and not because you followed somebody else's path. When I made big mistakes like everyone does, at least it was all my fault."

With nearly half a billion users, Gmail is the world's largest email service and considered an essential for many of us. This is the story about how Gmail almost never was.

In the early 2000s, Paul Buchheit took a naive approach to a big problem that previous, more experienced developers has tried to tackle--an effective web-based email platform. Trying to find operational software, Buchheit--Google employee No. 23--turned to an option that everyone else had written off.

"I decided to write the whole thing in JavaScript," he says. "A lot of people told me that it was a really bad idea, and that it wouldn't work," he says. "A lot of those people were speaking from experience--they worked on a large JavaScript projects or they had a friend who ran a company that tried to do it and it always failed."

The Past No Longer Applies

Previous failures meant nothing to Buchheit, who pressed on and tried it anyway. He found the solution in the unlikely area of a browser capacity.

"Browsers were getting a lot better and that's one of the things people didn't understand," he says. "There was a new generation of browsers that were much more capable in terms of what they could handle with JavaScript and not just HTML."

In his case, however, it wasn't extensive knowledge of browsers that helped him--in fact, it was the opposite. His naiveté saved him.

"Very often, if you do something new, the actual feedback people will say is, 'This is what we tried before and it doesn't and won't work,'" he says. "If you're naive, you may not even realize that it's been tried and didn't work," he says. "We tend to overlearn from the past. Just because something didn't work in the past, doesn't mean that it can't work in the future--especially in technology where things are constantly changing. Maybe the technology changed, the world has changed, or you're just simply taking a different approach. All these people [at Google] were telling me that it was a bad idea and it would fail," he says. "But I didn't really care, I thought they were all wrong and tried it anyway--and it worked."

Age Is Irrelevant

Buchheit went on to prototype Google AdSense and FriendFeed--Facebook's largest acquisition at the time--and is now an investor and Y Combinator partner. But he says he's more naive today than ever. "If anything, I'd be more willing to do crazy things now," he says. "I'm told that I'm naive on a regular basis."

He says it's less about age and more about the environment. "If you spent too much time in the wrong environment--if you spend a lot of time in a very cautious environment--you begin to adapt to that environment," he says. "There's a difference between someone who has spent 20 years at IBM versus someone who has spent 20 years working at various startups."

But being naive has got the best of him such as a time when he failed to invest early in Dropbox when he had the chance. "It's the biggest mistake of my career," he says. "I didn't move fast enough and I work in the business where speed is really important. You can't spend a lot of time thinking it over because someone else will come and get it."

Focused Foolishness

When looking at startups to invest in, Buchheit says he doesn't mind if entrepreneurs are young or naive as long as they keep the focus in the right place.

Hey says that too often companies get distracted by the startup scene or a lefty buyout. "At Y Combinator, we tell people that they should essentially be spending all of their time either talking to customers or working on the product, not at conferences or other things," he says. "The great entrepreneurs are focused on building a product that people will love and building a business."

He's always looking to invest in entrepreneurs with the same focused stupidity that Mark Zuckerberg had in Facebook's early days. "I think any reasonable person would have said, they should have sold to Yahoo for a billion dollars because it wasn't that big--just a college network--it had just a few million users, and they weren't worth that much money," he says. "But fortunately Facebook was not run by just anyone--it was run by Zuck, who had the internal conviction to turn down the billion-dollar offer and then actually grow it into a 140 billion-dollar market tab."

Steve Jobs famously said to "stay hungry, stay foolish." But just how foolish?

"You can generally separate new startups into two camps," says Hunter Walk, a partner at seed stage venture fund Homebrew, who previously worked for Google and served as a member of the founding team of Second Life.

"The first are opportunistic businesses, which are ones that tend to have a vision which is widely held and who are able to get there first. The reason they're able to get there first is usually some aspect of execution, or a key advantage in terms of talent distribution or capital--something that the other folks trying to do the same thing weren't able to achieve. In that case, one of the main advantages can be a level of expertise and familiarity with the space--having that non-naive knowledge of a sector, along with existing relationships with key employees, distributors, press, and customers."

Most entrepreneurs, Walk says, fall into this category. When it comes to the companies that really put a dent in the universe, however, naivety is a quality that many of the big names share.

"When you're talking about companies that change things--the Googles, Apples, and Teslas of the world--I think of them as belonging to an evangelical camp," Walk continues. "The founding team in that case hold a founding vision that isn't widely held, and may run counter to what we know about business. In this situation, the naivete--the lack of detailed awareness and understanding of why something can't be done--is actually very useful."

In some senses, naivete is the wrong word to use. Google, Apple and Tesla weren't founded by people naive about what they were setting out to create (although in the case of Google and arguably Apple they were naive about the business part of the equation), but they held views that were so new they struck other people as naive.

This naivete can help out in the long haul because it tends to favor a singular long-term vision rather than a short-term adherence to the conventions of business as they are today.

"One of the things Larry [Page] and Sergey [Brin] have been saying for years at Google is design your products as if bandwidth and storage were free," Walk says. "Now, of course they're not, but if you play out the laws of technology these are things which are cheaper each year. [Larry and Sergei aren't naive], but if you're trying to design forward-looking products, you shouldn't calculate your spreadsheet by working out how much a gigabyte of storage costs today--or how much it costs to stream a video file halfway around the world."

Disruptors And Sustainers

Provided that all companies want to be successful, why do some become shrewd opportunists, while others become naive evangelists? According to Walk (and others) it may have something to do with where these companies come from. The VC will most likely find a very different business proposition coming from the person already in a particular industry, versus the outsider looking to make a name for themselves.

"If someone hasn't worked in a particular industry, and doesn't have years and years of experience to show them what can't be done--or doesn't know what has been tried for years without success--that's where a lot of innovation comes from," says Peter Pham, cofounder and partner at Science, where he has helped build companies like Dollar Shave Club, DogVacay, Uncovet, Ellie, and Let's Date. "The people who are stuck living in the vertical that they're working in often find themselves unable to see the endemic issues in a particular field."

"Entrepreneurship means fighting against people who, by definition, benefit from the status quo," says John Lilly of Greylock Partners, a venture capitalist whose investment successes include Dropbox, Instagram, and Tumblr. "The idea that two people with a laptop can change the world is a crazy thought. In that sense it helps to go in with a fundamentally naive approach. If you knew everything that there was to know about a particular business you'd never try to do anything. It's much easier for people in my position, who have been around the block, to tell you an idea can't work than why an idea can."

In his work, business-management guru Clayton Christensen identifies two types of new technology: "sustaining" technologies, and "disruptive" innovations. A sustaining technology is something which supports or enhances the way a business or market already operates. A disruptive innovation, on the other hand, fundamentally changes the way that a particular sector functions. An example of the sustaining technology might be something like the advent of computerized accounting systems, while the digital camera (which famously led to the downfall of Kodak) represents the latter.

The "naive" entrepreneur might be more inclined to favor disruptive technologies, because they look at an industry with an outsider's objectivity and simplicity and try and imagine the way it "should" work. The opportunistic entrepreneur looks at the way it currently does work, and tries to work out how to capitalize on this.

The Bad Side Of Foolishness

But if there are (at least) two types of startup, then there are also multiple types of naivete.

"The disruptive startups I get excited about are the ones who do so with a degree of love, rather than the ones who do so with pure disdain and contempt," Hunter Walk says. John Lilly agrees with him. "The bad side of naivete are entrepreneurs who don't think they have anything to learn from anyone else," he says. "They take the approach that everyone else is a moron, rather than doing what they should be doing, which is asking a lot of questions and then working out whether the established norms work for them or not."

Another example of bad naivete might be a lack of awareness for the end user. Steve Jobs, for example, spent much of his career willfully playing the role of outsider. Even when Apple was a highly profitable company, he chose to expand into and explore new fields (music distribution, e-books, retail stores, television) in which he was still able to lay the role of upstart disruptor--despite having a multi-billion-dollar company behind him. But while Jobs embraced the idea of "[staying] hungry, [staying] foolish" he was anything but naive when it came to understanding user behavior.

Yet another type of negative naive behavior sometimes shown by founders is the kind of shorthand that suggests ideas haven't been properly considered. It's one thing to have an idea you're open to changing as it progresses; another to have a lack of vision behind what you're doing. Walk gives the example of the poorly-thought-through mashup, in which the pitch refers to "the Dropbox of x" or the "Github of y."

"It's a shorthand which sometimes suggests that they haven't expanded the idea, and that they're already viewing their work through somebody else's filter," he says. "Sometimes those can be warning signs of an idea that may not have anything behind it."

The Naivete Of Venture Capitalists

At the end of the day, naivete--like every other weapon in the would-be founder's toolkit--can have its pluses and minuses. Too much--or the wrong type--means a lack of realistic vision, and a refusal to learn from the world around you. Too little and you risk buying into the established vision of the world, and not being able to see far enough to change it.

"Good entrepreneurs will follow a particular vision in terms of instinct or gut reaction," says Peter Pham. "Great entrepreneurs follow the data. In many cases [with successful tech companies], you come in believing one assumption, only to have your users and customers come in, grab the product, and use it for something else entirely. That's a key difference."

Hunter Walk suggests that flexibility and naivety go hand in hand--and that they should stay this way. "I often think that anyone who won't embrace anything that's not 100% predetermined, and in which they know the whole plan from the very beginning, hasn't spent a lot of time in tech," he says.

Ultimately the difference between the foolish entrepreneur in the "stay hungry, stay foolish" sense and the straightforward fool is one that can be a fine line to tread--both for the would-be founder and the VC looking to invest in them.

No VC has a perfect hit record, and venture capitalists themselves must be willing to acknowledge that they don't know everything, and to buy into the right vision when it comes to investing. "It's not whether you believe an idea can work or not, but whether you believe that a particular entrepreneur is the one to carry it out," says Pham.

"I've had the opportunity to work with some amazing entrepreneurs--and when they say they can get something done, I don't question them at all. I love hearing amazing, crazy ideas--it's whether people can execute them that makes the difference between negative naivete, and brilliance."

Runners and fitness junkies have been able to track their progress via smartphones for years. But what about more extreme sports? Thanks to a combination of smart hardware, apps, and algorithms, the "quantified self" movement will soon branch out onto the half-pipe.

Krack is trying to quantify skateboarding the same way that running and other types of movement have been successfully mined for data. To do this, the company is adding sensors to detect movements of the board. The plans aren't finalized, but the initial effort puts a gyroscope, accelerometer, and magnetometer into a designed case that's plugged to the board directly under the wheels, against the truck base.

The idea seems simple enough, but Krack founder Kevin Straszburger says, "In the skateboarding world, two tricks are never the same, even 180 degrees is not exactly a 180 degrees. That means that finding patterns to develop our 'trick recognition algorithm' isn't an easy thing."

A 9-year-old beginner's ollie is completely different from someone who's 35 and has been skating for decades. This is a huge challenge for the team that they've been working on to optimize for and get just right. Ultimately, it's separating the noise from the trick and accurately detecting movements with the board that will make or break whether the product catches on.

The initial phase of gathering data included having people perform the same trick over and over again to find the characteristics that could only be associated with that trick. The algorithm doesn't only recognize known tricks--it also plans for the future.

Straszburger says skaters are coming up with new tricks all the time and they're looking at ways to detect those automatically. "Skateboarders keep inventing tricks that are in fact a combination of simpler tricks. For example, when you say this person landed a 'flip front board,' it means they performed the sequence: rolling + flip + frontside boardslide + landing + rolling again."

The solution is to combine the simple tricks in the algorithm to automatically adjust for the complex tricks. Fulfilling that promise, however, means that Knack needs to get enough data in the system, something the new company is working on.

Beyond the initial appeal of detecting tricks and being able to brandish proof, Knack also wants to build a community around achievements and places. This is the same type of thing other wearables like Fitbit are trying to do as well.

Tracking user movements is one thing, but then taking that data and making it relevant in a tangible way is how the newest activity tracker Moov has gained so much attention during its announcement. The Moov sensors are moving beyond raw data and providing users with features that might, at some point, replace personal trainers for a large part of the population.

For example, Moov can be attached to different sports equipment and gauge performance, even suggesting adjustments to improve outcome. Apple and Google are rumored to be interested in this space as well, but with both companies leveraging huge built-in user bases, the community and engagement level could be tremendously raised.

Krack is still in the early stages of what it's attempting, but it's the focus on providing users with results beyond distance traveled and top speed that makes the project ripe for the next generation of "wearables."

Trying to make education affordable seems impossible. In fact, you could argue that any kind of education startup seems nearly impossible: Technology's short-term expectations aren't typically conducive to the long-term quality education requires.

So it was with no small dose of foolishness that developer Ryan Carson set out building Treehouse, the new-tech-focused education platform, now 70,000 students strong. "I never think about how hard something is going to be," he says. He just does it.

Early Ed-Tech

"Launching Treehouse was very naive," he says. "It's a very hard problem--teaching people online, getting them job-ready and then putting them in jobs. The challenges were and are still enormous."

At the beginning of the ed-tech startup trend, when other coding schools like Codecademy were flashing shiny badges but failing to provide optimal educators and actionable results, Treehouse began offering tutorials from actual experts and teachers as well as training tech companies' employees. "We've been doing it three years--which is kind of a long time for me---and we're just now starting to crack it open," he says.

The company now offers tutorials for programs including CSS, HTML, Ruby, JavaScript, iOS, and recently added WordPress. Results show that the average Treehouse education provides a $10,000 salary increase while it is used for employees of companies like Twitter, Square, and Aol.

Marketing ed-tech company Copyblogger was founded upon similar ideals to that of Carson's. Cofounder Sonia Simone says naiveté helped her create the early-adopting marketing education platform back in 1998 with the idea of putting an educational platform online right away and figuring out the rest later. Now one of the most-used online marketing tools, it seems to be working out.

"I would have never expected this company to work," Simone says of Copyblogger. "We're a technology company, a marketing company, and an education company so it's a constant challenge to mesh all of the components together."

But Simone's experimental ideas were once discouraged at her previous corporate job--something Ryan Carson hopes to avoid as Treehouse continues to grow.

Getting Rid of Management--Like, Tomorrow

Fearing that close-minded corporate structure that Simone experienced, Carson enacted a no-management workflow to his 70-person company last June. It was a move that came as a shock to his employees as it isn't the typical move of a three-year old, growing company that has received upwards of $13M in funding.

Employees' reactions were polar opposites and brought enough chaos to pause work production. "Some people were giving me high fives and some people were like, 'This is fuckin' crazy--you're gonna destroy the company," Carson says.

But a few halted business days and nearly one thousand thread comments later, Carson was relieved to find the majority of employees jumped on board with his quick decision. "I was actually afraid that people would say no because I thought to myself, 'I don't know if I want to run this company if they want the traditional management structure.'"

Inspired by the likes of Zappos and GitHub, Carson and cofounder Alan Johnson enacted the change within just a few days with hopes to figure it out along the way. "We did as much studies as we could within the week before announcing it, but the details were so obscure, we couldn't figure it out," Carson says. "So we had to kind of invent it from the ground up."

Even thought Zappos CEO Tony Hsieh's impulse decisions were not always approved by his employees, at the end of the day, the experiments--like the no-management rule--were the inspiration behind his multibillion dollar business which came from a typically mundane idea of selling shoes online.

A few months before removing management, Carson began a mandatory four-day workweek--an unheard of approach to a fast-growing company. "I was pretty naively optimistic in the beginning when I said, 'I think we can get five days of work done in four,'" he says. "But, miraculously, people have figured it out and the amount of goodwill that is generated from that is worth a million times more than the eight hours that we could have got out of that day."

Long term, Treehouse will have to figure out how to scale with more employees, which may bring about more as-yet-unforeseen changes. "Scaling the work structure with thousands of employees one day--I have no idea how that's going to work," he says. "But I'd much rather try and figure it out than die a slow corporate death.'"

Naivete Does Not Mean Mistake-Free

While it may work out well for Carson most of the time, off-the-cuff decisions don't always produce good ideas. In fact, it can result in a big mistake--like the email he sent out last month.

Carson asked all 70,000 students to voluntarily download certain software, which came across as a prompt to install spyware, "It was a disaster," he says. "Why in the world I thought it was okay for me to do that is beyond me."

It was one of the few times Carson was really shaken by a naive decision he made. "Everyone in Treehouse was really angry at me and it was more painful than our students being angry at me," he says "That was the first time I felt kind of afraid like 'Oh, wow if I screw up again, I may permanently shake their trust.'"

After apologizing personally to customers through email and Twitter, Carson could see that people respond well to authenticity. "I got responses like, 'No big deal, thanks for apologizing' and 'I like you even more for apologizing.'"

It also taught him a balanced use of cofounders' powers. "I should have ran that by our cofounder so he could have told me, 'Dude, that's weird, don't do that.' But, I think it still needs to be balanced with being willing to pull the trigger on stuff even if someone doesn't think it's a good idea. But in this case, I think I just veered too far on the side of naive quickness."

Think Like a Child

It's Carson's child-like outlook on life reflects Treehouse's design and user experience with simple icons, rounded typefact and easy-to-follow video tutorials. "Learning new things really is amazing and I think especially the name Treehouse is a name that reminds people of that wondrous adventure," he says.

"Now that I have kids, I'm reminded how serious adults get and mostly unnecessarily so," he says. "They run around and they are smiling and laughing and life is just a big adventure," Carson says.

Cofounder Alan Johnson says the whole idea of Treehouse started by recalling the wonder of when school used to be fun.

"In the beginning we were like, 'Hey let's shoot some video about web development and web design and people could watch it and learn--it'll be fun,'" Johnson says. "I would say a lot of the risks we have taken have a lot to do with Ryan's optimism and a lot of those risks had a big part of our success."

Carson and team's latest idea, Workspaces, is a built-in text editor which has set out to solve the problem of students' inconsistent note-taking software, which they had to find and download themselves prior.

Coming up with an extremely secure, streamlined product for both students and professional developers to understand was a challenge. "We were several months into the build with multiple major design overhauls under our belt before we had a clear answer," says Treehouse designer Matt Spiel.

After wrestling with several overall aesthetic concepts, they settled on a native desktop software. "The answer, in our minds, was to provide them with something native to the web that would allow them to follow along with the content, experiment, and create their own projects without having to worry about which operating system they were using," Spiel says.

Students can now create and save HTML pages, JavaScript and others right from within the browser. "It turned out to be a huge technical and design challenge, and I'm extremely proud of the team for launching it," Carson says.

Carson can add Workspaces to his resume and appropriately titled blog The Naive Optimist, where he details the thoughts behind his quick actions. But, why put it all out there for the world to see his tests and missteps?

"Because I firmly believe that nobody really knows what they are doing," he says. "So it's kind of a ruse to pretend that anyone has anything really figured out. I've sold a couple of companies so it seems to make more sense that instead of hiding my failures, I just talk about them."

"It's more a matter of saying, 'Of course I don't know what I'm doing and of course I'm naive,' but that's why I'm excited because reality is going to be whatever I make of it and it's kind of fun," he says. "I'd much rather try things and be wrong than not try them and be right all the time."

When Apple previewed CarPlay earlier this week it set gearheads' pulses racing. It also made some developers green with envy. That's because Apple chose to only bless four third-party developers with access to CarPlay ahead of its launch. I spoke to one of them to see what it's all about.

Driving In The Dark

The lucky third parties who have access to that private API are Spotify, Beats Radio, iHeartRadio, and Stitcher. It's of course easy to see what all these apps have in common: They stream music and can be seen as the successor to "old fashioned" radio.

Brian Lakamp, president of Digital for Clear Channel Media and Entertainment, oversees subsidiary iHeartRadio, and agreed to speak with me about his early experience integrating with CarPlay.

What The Framework Looks Like Today

"Apple is pretty selective about how they disclose information," says Lakamp. "Apple made us aware of the opportunity. We were enthusiastic to participate and then worked closely with them to build the demo that they just demoed in Geneva."

Lakamp wouldn't reveal when Apple approached the company, but he says that once they did and iHeartRadio signed on, developing a CarPlay-compatible iHeartRadio app wasn't a major coding challenge--mainly because Apple did a good job with the API allowing developers to add CarPlay support to their existing apps instead of having to make new, dedicated versions.

"The way that Apple constructed this is a relatively thin layer that we need to build to copy existing apps that move some of the control and command structure to the console," Lakamp says. "Then the console simply acts as a remote control to your app. It was a relatively light integration."

As for how long redeveloping the iHeartRadio app to include CarPlay support took?

"Without giving specific dates, it was fairly quick for us," Lakamp says. "Apple has done a good job of doing what you need to do in a car. I can tell you that we spend a lot of time on our custom integrations thinking about how you keep an experience highly functional, but highly simple--because driver distraction is something that you really need to think about--and how you take the core of a product and can convey it as safely and simply as possible."

The framework is made up primarily of two UIViews: a directory (for songs and artists) and on-screen controls.

"Apple provided twin lanes for the UI and a framework for the UI to operate within, and so made that part of it relatively easy as well. It's a relatively straightforward directory structure and a player structure that has a limited set of controls, or limited set of things you can do. They've got a consistency of feel on the platform, as you might expect from Apple, and a simplicity around how you browse through a menu of choices," says Lakamp.

Ceding Control Of The Car (And Radio) To Apple?

While it may be considered a no-brainer that a streaming digital radio service is excited to be one of the first to be chosen by Apple to be given access to a new platform, I wonder if iHeartRadio's parent company Clear Channel is apprehensive now that Apple has its sights set on cars.

After all, Apple frequently makes inroads into industries under the guise of helping them out--the iTunes Music Store was sold to the record labels as a way to fight piracy--before becoming the distribution channel that record companies now rely on most.

Lakamp says that's not something Clear Channel is worried about--from Apple or anyone else. Despite the "old fashioned" nature of AM/FM's technology, and those who crow about its impending demise at the hands of digital streaming, Lakamp says radio isn't going anywhere.

"I can tell you from my perspective that that idea is somewhat crazy," he says. "Technology has evolved every step of the way: AM to FM to satellite to Internet. None of those have removed the need for the preceding technology. We're in the fourth, fifth generation of things right now. If anything, they've been additive, and they've extended the opportunity. Every car on the planet has AM/FM radio. It's an easy, reliable way to get at content and get at the personalities that you love. Every car has it, unless the radio has been stolen."

Some have also asserted that the sheer number of car makers that have signed on to Apple's CarPlay initiative--there are 15 and counting--means that the auto industry is at a loss on how to bring the car into the 21st century and instead are happy to give Apple control of the work.

That's something that GM, which has just launched its own automobile software API, disagrees with, insisting that by supporting CarPlay, the company is proud to offer its drivers a wide array of options for in-car infotainment systems.

"Partnering with Apple on the CarPlay initiative furthers our mission to bring vehicles into our owners digital lives and their digital lives into their vehicles," says Mary Chan, president of General Motors' Global Connected Consumer unit. "We see huge opportunities for the iOS platform paired with OnStar 4G LTE connectivity in future Chevrolet, Buick, GMC, and Cadillac vehicles."

But the company stressed that "CarPlay is not a replacement for any of the current GM infotainment systems (MyLink, CUE, or IntelliLink) and their offerings. It is another option that we're investigating with Apple, to bring drivers the connectivity they desire in their vehicles."

Despite some vigilant eyes from others in the industry, however, Lakamp says he's excited about Apple's entry into the automotive field.

"I think that what they're doing here is taking a simple, clean, elegant approach through CarPlay," he says. "We've been working with Apple closely for a number of years, with iOS as a platform, on iPhone and iPad. We're interested and excited to see them extend their capabilities into the car and proud to be a partner with them to include iHeart in their initial foray in the car."

Anticipating A Public Release

The reasoning behind the limited access, according to an Apple employee with knowledge of the plans who spoke to me on the condition of anonymity, is because Apple wants to go "slow and steady" with CarPlay. The employee stressed safety behind the wheel was a major concern, but wouldn't comment if more developers might get access to CarPlay's private APIs once iOS 7.1 ships. We may have to wait for WWDC in June to find out.

Luis von Ahn was a curious kid. He spent weekends exploring his parents' candy factory in Guatemala, sifting through the machinery and trying to understand how it all worked. He occasionally got into trouble for breaking things, but now describes it as a "great, complex playground."

Years later, von Ahn has started a few hugely successful companies, including CAPTCHA and Duolingo, the video game-esque language-learning app that's exploded over the past year and recently raised a fresh $20 million in funding. Von Ahn says his secret to success is his candy-factory sense of wonder, which in the business can give him the gumption to take leaps of faith that might otherwise feel impossible.

The Birth Of Duolingo

Luis admits that Duolingo was far from a safe bet. While growing up in Guatemala, he saw firsthand how people struggled to learn English. Rosetta Stone and similarly pricey products seemed inadequate in addressing this demand: millions of poor people who want to learn English to get a job. Von Ahn set out to fix this, but faced one heavy roadblock to launching a business: He wanted the product to be completely free. (Traditionally, language-learning software is some of the most expensive stuff in the app stores.)

"It was kind of a long shot, but I thought if it worked out it would be awesome, so I went for it," says von Ahn. "The biggest thing was taking a leap of faith, and not worrying too much about the business model."

He attributes much of his success as an entrepreneur to youth--or at least a young attitude. "It's useful to be young because you're pretty clueless, so you try things that more experienced people wouldn't try. It works better if it's a free-for-all."

Von Ahn says it's mentality, and not necessarily age, that makes the difference. "When just starting out, it's good to not have the mindset they teach you in an MBA program."

The biggest "happy mistake" von Ahn made? Creating a mobile app at all. His initial plan was to build a website for language education, and that's what his team of engineers set out to build. Luis decided to add a mobile app on a whim, expecting it to be an extra feature for the core product. The "extra feature" caught on. Now, 80% of Duolingo's 25 million users are coming from mobile, so many that Apple named Duolingo free iPhone App of the year for 2013.

"That was all completely unexpected," says von Ahn.

Going Up Against Candy Crush

But how exactly did Duolingo charm mobile users so well? For one, the app stands out from the Rosetta Stone crowd not only because it's free, but also because it's addictive. Duolingo, along with other gamified language apps, offers sleek interfaces and timed language challenges, all the while tracking scores alongside your Facebook friends. As users successfully move up levels, they earn "lingots," Duolingo's virtual currency, with which they can buy "power-ups," such as regaining a heart (point) lost during a lesson. (Below, some of the gamification graphics.)

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It's a far cry from the usual lengthy conjugation tables and vocabulary quizzes of a traditional language course. Von Ahn says Candy Crush is his biggest competitor, not language businesses.

The gaming blueprint was another happy accident. When Duolingo first launched, Luis tried to use it to learn Portuguese. He struggled to stay motivated, so he experimented with adding little incentives, such as new levels and badges, to make it more fun. He never anticipated that would become the main draw for users.

"When I asked people why they like Duolingo, I thought they would say: 'I've always wanted to learn French,'" says von Ahn. But the most common response he gets: "It's fun, and at least I'm not wasting my time by playing Candy Crush."

An Unlikely Partnership

Duolingo currently offers training in six languages: English, Spanish, French, Italian, Portuguese, and German. The U.S. is its largest market: 7.5 million Americans are using Duolingo, followed by Brazil, with 2.4 million users, and then Mexico at 1.5 million.

Offering a free language service remains von Ahn's most fervent mission. "We want to be free, period," Luis says. "That's the one constraint."

He also doesn't advertise, and has no plans to. So how will Duolingo ever make revenue, without user fees or advertising?

As of September 2013, Duolingo began translating content for BuzzFeed. That's right. Brazilian children learning English on their phones are actually translating sentences from those "16 Best Sandwiches of 2013" lists. Or conversely, when someone takes a BuzzFeed quiz, they're sponsoring language education for 25 million people across the world.

"Duolingo gave us a way to translate a ton of posts very quickly, so the scale was the initial attraction," says Scott Lamb, vice president of international at BuzzFeed. Lamb also says that Duolingo's approach drew them in: "The idea itself really spoke to us."

Right now, BuzzFeed has launched three foreign language verticals: French, Spanish, and Portuguese.

Lamb says the content being translated ranges across different sections of the website, but is skewed more toward entertainment content. Still, editors intervene to ensure the translations make sense. "If a post makes a lot of jokes about '90s TV characters in the U.S., that's not going to fly in Latin America, because no one knows who Joey from Full House is," he says.

The Next Big "Mistake"

So what's ahead for Luis's games? He's working on another "stupid" idea: certifications. He plans to begin offering Duolingo certificates for aptitude in a language, similar to formal testing services such as the TOEFL or IELTS. But von Ahn plans to offer it for $20, rather than the $210 fee for a TOEFL exam, in another attempt at reaching lower-income groups.

Mike Boyle, educator and author of several English-language textbooks, calls this plan "a big dream."

Boyle says the certificate industry is already crowded, and even at a lower price, those who don't own a smartphone will be shut out. "The obvious criticism is it's a smartphone app. In order to use it, you need to own an expensive machine."

It's yet to be seen whether Duolingo certificates will be able to compete with other language exams. But Duolingo's enormous success so far is undeniable. And Luis von Ahn attributes his greatest triumphs to experimentation, not spreadsheet analysis.

"It used to be that if you start a restaurant, you have to think about how to sell your food," says von Ahn. "But things are different now. Even if you have no clear business model, the ones that find something that people really want and solve a problem will be the most successful."

Even the best speakers are pretty dumb. They're good at projecting sound, but that's about it. Cone is about to change that. The newly announced smart speaker from Skype cofounder Janus Friis's new startup Aether learns from you as you use it. And it just might change the way people listen.

"Cone learns from everything you do, says Duncan Lamb, cofounder and chief product officer. "If you turn up the volume or ask for a certain song, that means you probably like that song. Skipping a song means you probably don't care to listen to it at the time."

Lamb continues, "All these things are noted against time, day, and place in the house, which creates context for what people like to hear and when. Down the road, there are many more data points that we will start to look at factoring in, all of which will help Cone decide what the perfect sound for now is."

In other words, if you listen to music loudly in the living room after you get home from work, Cone will adjust accordingly. If you move it poolside on the weekends, it knows that and plays music appropriate to the situation.

Cone is the first attempt by Aether to bridge the gap between consumption and the physical devices used to access the content that's being consumed.

"Janus and I had both seen the IBM Watson Jeopardy demo and were trying to figure out how it could be that on the one hand, we have all this computing power with content, data, and context at our disposal, and on the other hand, we still have to explicitly tell our devices what we want them to do," says Lamb.

Cone is extremely promising, but isn't a slam dunk yet. The first hindrance is the speaker's $399 price. Though competitive if it can deliver a deep and rich sound, it still isn't cost effective for a lot of people. The second challenge is one of usefulness.

The latest trend in digital music discovery is mood-based listening--playlists tailored to a certain situation or event like "summer at the beach," rather than a genre. Beats and Songza both play up this angle of curating based on a user's location, reminiscent to what Cone is attempting, but without hardware and for a lot cheaper.

So, if Cone can perform flawlessly it will have lots of supporters singing its praise, but if the learning algorithms fail too many times, other apps and services like those mentioned will most likely end up filling people's needs, even if they require more effort configuring.

Even though Cone is decidedly complicated on the inside, full of learning algorithms, its existence can be summed up with one word: Simple.

"We could both see the direction things were heading, which was away from computers and toward a personal collection of devices like phones, tablets, wristbands, weighing scales, thermostats," says Lamb. "It was a really exciting promise, but the reality being a ton of housework, setting things up, syncing them, charging them, provisioning them with an increasing number of accounts. That time could have been better spent."

Not having to think about what content to listen to could change the way we think about our existing music libraries and content sources. If the speaker really can deliver accurate results, however, it could sway whether someone pushes play instead of turning on a video game or other form of media.

At magazines like Fast Company, we rely on distribution networks to get our articles to our readers. In print, the primary distribution network is the Postal Service. On the web, it's Facebook and Twitter. They're our middlemen, and lots of people in the media industry would like to cut them out.

Inkshares, Beacon, and Aerbook are three digital publishing startups helping writers and publishers use crowdfunding to eschew distribution networks and advertisers and make money directly from readers. One of them, Beacon, was founded by a former Facebook editor.

The thing is--people have tried this before. The battle to free publishers from distribution and advertising has turned once-promising companies into casualties, such as the short-lived digital magazine platform Glossi, or journalist Paul Carr's NSFW Corp. Others like Readability failed to achieve any kind of mainstream adoption.

The New Players

First, the landscape. There are already some "lean back" digital magazines like Flipboard and OpenZine out there, as well as socially focused ecosystems like Toronto's Wattpad, which boasts a community of 25 million readers and writers. Venture-backed content syndicator NewsCred connects brands and publishers with licensed articles, this week partnering with Sharethrough, which describes itself as the "world's largest in-feed advertising exchange." Then there's Repost, a 10-month-old company advised by pundit Jeff Jarvis, which claims its embeddable, recycled content is the secret sauce to page views. Down in New Zealand, the founders of Booktrack are attempting to change the way we listen to audio books by syncing customizable playlists to literature.

In San Francisco the social publisher Storify continues to experience identity issues following a September acquisition by the commenting giant Livefyre. A trio of apps and plug-ins in Hemingway, Draft, and Write Rhymes seem to be a Machiavellian play by engineers to prey on insecure scribes hungry to manufacture art, which ironically may make this one of the most viable, if not altruistic business models among the pack. Then there's a "streaming texting" offer from Spritz, promising the ability to read text as quickly as 600 words a minute.

This article wouldn't be complete without mentioning news-centric ventures like the Pierre Omidyar-funded First Look Media, Nate Silver's FiveThirtyEight, and Project X, a digital organization founded by former high-level Washington Post staffers including 29-year-old wunderkind Ezra Klein. There's a smorgasbord of content in Medium, offering "everyone's stories and ideas," and even an attempt by web entrepreneur Jason Calacanis to create a curated journalism outfit called Inside--a journalism site without journalists. If there's one certainty in this uncertain landscape, it's that anything seems possible in the world of digital storytelling.

Here's why the three companies I mentioned earlier--Inkshares, Beacon, Aerbook--are three potential game changers.

Crowdfunding Publishing

Inkshares is a crowdfunding publisher where writers receive the majority share of royalties generated, as well as access to online publishing tools and metrics. Cofounders Larry Levitsky and Adam Gomolin say they want to help serialized authors and long-form journalists publish print and e-books.

Levitsky is formerly of McGraw-Hill, and spent time as the publisher of Microsoft Press Interactive. Gomolin previously worked as a securities lawyer.

PBS MediaShift's Mark Glaser, who serves as an editorial advisor to the company, calls Inkshares a game changer for authors and fans because it lets the two connect directly.

"I believe the current system for publishing books is broken and support any effort to provide alternatives that will help authors connect directly to their audience," Glaser says.

The weeks-old company plans to let authors sell a share of their book's prospects to fans. If a book becomes a commercial hit, that crowdfunding contribution is effectively a futures investment.

"That completely changes the equation for authors and fans," Glaser says.

Gomolin, who pulls double duty as Inkshares' general counsel, says with so many players in the space, it can be hard to stand out. But he thinks his service is innovative enough to do just that. All entrepreneurs champion their cause--that's not new. And neither is crowdsourcing. But cutting readers into profits is. And that could make this company succeed by making those same readers equal partners in the service's success.

"We think that crowdfunding, structured in various ways, is the answer to this dilemma," he says.

Another site, Contributoria also allows funded proposals, but users are required to pay dues, and projects are voted via a point system. That site includes group submissions while Inkshares is about backing individual projects. Plus funders are cut in to a piece of the action if the work is a success. Gomolin says this isn't donating--it's paying for goods that have not been created yet. It's pre-order based crowdfunding, which means readers voting with investments. Gomolin thinks Kickstarter leaves writers out in the cold, a lane he hopes his site can use to drive traffic, eyeballs, and ultimately dollars.

So far over a dozen projects are in various stages of funding, with fans able to pre-order and offer micro-investments of $10, $20, or $50--or be "extra generous" and add fill-in-the-blank sums.

Right now the sweet spot for material is longform journalism, which Gomolin calls anathema to the never-ending 24-hour news cycle. "I talk to writers every day who have jobs at top places but are burned out on and jaded by the constant churning of brief pieces on popular media. There's got to be a model for paid longform other than a handful of elite outlets."

Gomolin wants to fully fund 50 projects in the next month, most in the $500 to $5,000 range. Writers receive 70% of royalties at Inkshares. Traditional publishers pay about 10% to 35% for wholesale or list price for royalties. But falling revenues have made the old way near-impossible for most writers to break in, market themselves, or pay their bills (10% of all published books covers 75% of total book revenue, according to BookScan, which complies sale data). The next step is becoming a fully licensed crowdfunder, which would let fans share in sale revenue, something that's never been done before.

"If each of those authors brings in 50 to 100 backers, it will be a humble, but meaningful month," Gomolin says, "but one that validates the model."

A few weeks ago Gomolin and chief product officer Thaddeus Woodman visited Professor Dan Pacheco's class at Syracuse's Newhouse School via a Google hangout. Pacheco, who is not an advisor or paid by the company, calls the startup a unique experiment blending "the best aspects of traditional publishing with crowdfunding and eventually microlending."

Connecting Writers With Audiences

Imagine letting readers decide how much writers get paid. Or how about forking over a flat monthly rate in return for a stream of content from your favorite wordsmith? Oh yeah, and how about folding down four fingers and raising one to the concept of page views? That's the premise behind Beacon, which pays writers via subscriptions, and per project, with top performers making as much as $5,000 a month in bonuses, in addition to subscription revenue.

Launched in September, cofounder Dan Fletcher says the site is now outperforming similar publication projects on Kickstarter, with attempts like Climate Confidential exceeding funding and raising almost $45,000 in only one day.

The stable of writers on the site have bylines from major publications like Time and The New York Times. In total, there are more than 90 writers, authors, and artists, many in areas traditionally underrepresented by mainstream media, like science and the environment.

"We want to build a paying platform," explains Fletcher, the former managing editor of Facebook, and ex-social media director at Bloomberg. Fletcher wants to target journalists and serialized authors--their work, not how many eyeballs are on-screen. "Page views are a lousy metric for what's actually valuable because it only measures broad popularity and even then much of that may be totally unreal. What we have now with page views is a system that lets ad buyers dictate quality even though often they are wholly agnostic to what's actually written," he says.

In this crowdfunding model, readers pay $5 a month for access to every story on the site. Readers can also fund specific campaigns; subscribers are notified when writers publish. Over 90% of projects are fully funded. Beacon is based in Sunnyvale, Calif., and venture-funded through the Y Combinator accelerator.

Fletcher says the site is a haven for established acts to translate their online following into paying subscribers. Building major social footprints on sites like Twitter and Facebook has made those platforms, and their owners, rich--not the content creators. Fletcher wants to change that.

"Journalists create tremendous amounts of value," he laments. "They get no cut of that [on social media]. If we can take some of their followers and get money for their work, that's pretty cool."

One of those creators is Tim Wut, a contributor to TechZulu. His project, a series of interviews called Life in the Startup Trenches, reached 256% of its funding goal, from "people I never even expected," he says. "As a freelance writer I've always been struggling how to go past the paper article model. It surprised me that I was able to find people from my network able to support my project. For me as a writer that was huge."

The revenue share is 70% for creators, the other 30% used for distribution. There are no ads on the platform. Right now Beacon doesn't take a cut, instead focusing on building a network. But Fletcher says when Beacon does take a piece, the company won't take more from writers, instead deducting a portion of the funds going to distribution.

An early problem with the model, however, is syndication, or lack thereof. If a big-name writer publishes something on Huffington Post, for instance, it likely won't make it on Beacon. That's because most organizations have strict content ownership rules that cut writers out. Beacon's projects are largely independent of news organizations--and fully owned by their creators.

Similar to artists eschewing the studio system for the independent route back in the 1990s, the question here is if their work can be as captivating with just the creator headlining it.

From Writer To Reader: A New Way To Sell

Direct-to-fan sales is the play at Aerbook, a commerce vehicle allowing readers to preview material, and writers to sell anywhere on the social web. The four-year-old service offers easy web publication and distribution--anything from a coffee table book to fiction, by essentially dragging and dropping files into the site's browser. Creators can use photos, audio, video, text boxes, animation and then export and print onto the major e-book formats.

Sensing the need for authors to target readers, and the desire for fans to consume that media in a streamlined, graphically rich way, chief executive Ron Martinez decided his service would target in-stream, in-app commerce, which Aerbook debuted in February.

Native advertising is the fastest growing category of ads, says Martinez, the former vice president of intellectual property innovation at Yahoo. So far sales from the new Aerbook offering, introduced in February, have been in the single digit thousands. But Martinez, an idea guy trying to leverage social into sales, senses he's onto something. If you view the link in app, you can buy in-stream, a play on our impulsive, quick-buy culture, which is only accelerated by the click-heavy online set.

"A friend of ours say this is Amazon for Twitter," Martinez quips. "Really is an apt statement."

Around 3,000 books are available from mid-range publishers. To promote interaction, drive attention, and hopefully dollars, readers can share any book's page on social media. And because of public domain and partnerships with mid-sized publishers, there are a lot of good titles, like James Joyce's Dubliners, and The King In Yellow, the book HBO's True Detective is based on.

Aerbook takes 15% from each sale, plus a small processing fee. For $29 a year, authors can view sale metrics, and add links to other retailers via Aerbook's selling page, driving traffic to sites like Amazon, Nook, Kobo, and Google Play. The $59 annual package is aimed at heavy marketers, with the above features plus preview options on social posts. There is a separate cost for illustrated or PDF to e-book conversion.

Targeting brand affinity and impulsive social media users, buying and selling products via tweets is producing results for companies like Chirpify, which reported more than 300,000 consumers purchasing, sampling products, or accessing content between November and January.

Martinez says he's confident that being able to preview and embed transactions inside a social stream will drive major interaction and sales. It's still early, but if a big publisher and a few star authors get onboard, Aerbook could be a winner.

If you ask Mike Germano why he started Carrot Creative, he'll tell you, straight up, it was because he didn't want a college internship that sucked.

Almost nine years later, Carrot's resume boasts clients like Rolex, Red Bull, and Disney, and is receiving list accolades from Inc. and the Agency Post, and was bought by Vice at the end of 2013. After years slogging their way through the early Internet's wild west and working off of hunches, the digital agency could be the literal stand-in for the chorus of "Started From the Bottom." It started in a basement. And now they're here.

Invent Your Own Internship

Seniors at Quinnipiac University were required to complete an internship to graduate, as Germano was in 2005. The problem was the options for someone interested in the nascent web were pretty abominable.

"I had built better websites than these places all around Connecticut," says Germano, who with his high school friend Chris Petescia were the duo behind them. So when Petescia was also required to do a branding case study as a student at the Rochester Institute of Technology, he and Germano found loopholes in the university system to do exactly the class project they wanted to do, which was start Carrot Creative.

In the early days, beer money was diverted for proper expenses of their business operating out of a New Haven basement and taxes paid to the state of Connecticut. They acted as each other's professional advisors. They were armed with a belief that social media and the web were going places, whatever that meant at the time. If they had been found out, they probably definitely wouldn't have graduated.

"I thought if I got caught, my teachers would be impressed," says Germano. "My dean found out three years later, and he was like, 'Nice. If we had found that out, you would have been expelled.' When you see a vision of the future that you want, you are blinded by consequences because it doesn't fucking matter."

But they pulled off the guise.

Land Your First Client By Insulting Them

If you ask Germano how he got Carrot Creative's first client, he'll tell you, straight up: "I conned some doctor for 880 bucks."

He needed a checkup from a general practitioner, one with an over-inflated ego and a BMW. When Germano prodded his doctor about his website, comparing it to an '88 Accord, and said he could make one better--the best, even--the doctor asked how much.

Back in 2005, having a presence on the World Wide Web at all seemed like a feat. (For context: This was around the time Tila Tequila hit her peak popularity on MySpace, Facebook was barely a year old, and at least another year would pass before Twitter saw light.)

The fact that they had a website, the facade listing Germano's home address and phone number, seemed legitimate enough for their early, local clients. They relied on what existed of social media with their nil marketing budget. To both kill open time at the end of a day and appear more professional (read: older), Petescia designed bubbly vector busts on chartreuse backdrops to hide their true appearances.

"I didn't realize that we were just building an unbelievable marketing case study for our company," says Germano. "Afterwards, people would come in and ask like, 'When am I getting my avatar?' And we'd be like, 'Why do you want an avatar? You look older?' A way to hide our age became a big part of our brand. We were just having fun."

As good as Petescia and Germano were at swimming through murky water wearing too many hats and holding the torch of innovation, they were having trouble getting paid. So Germano, amid a Twin Peaks marathon, created a fake assistant with the scariest name he could think of: Audrey Strauss. Instead of Mike asking a client to please pay them for their work and receiving a soft no, he'd have Audrey remind them their payment was 30 days past due, which was Germano from a different Gmail account.

"If we got caught for that, people would be like, 'You're a bunch of scam artists.' We weren't--we were solving a need. As silly as that sounds, we were completely justifying making up a fake person because we had to email people and get them to pay us. You did whatever it took."

Bold? Yes. Stupid? Probably. Sounds like a company fit for New York City.

Moving To New York

It was time to move to Brooklyn when they told a client that, yes, in fact, they were based in New York. They were still operating in Connecticut. Responding to a sublet offer, a wide-eyed Germano took the 5 a.m. train to the city, expecting the lessor to be there at 8. He fell asleep waiting. "At 9 o'clock, this older woman shows up, and here's this kid drooling on the floor," Germano says. "And I'm saying, 'We're going to be the greatest company in the world, and you gotta give us your office.'"

Not only did she take a risk on giving Carrot the small space, which barely had enough money for the $5,000 security deposit, she gifted tables and chairs that were otherwise unaffordable. It's the kind of precarious situation every responsible adult, business professional, financial advisor, parent, or risk-averse person reads about and feels tremendous anxiety pangs over.

"What youth allows you to do is realize the ramifications of the risks you take when you fail don't seem that bad," says Germano. "If you were 35 years old, and I'm saying 'Would you like to bet all the money you have on a job that could possibly fail?' You'd be like 'absolutely not.' It just wouldn't seem right."

What Motivates A Startup

The earliest risks seem distant enough that it's okay to laugh and reminisce about how crazy things were back then. But don't think for a second it all came without heartbreak, sacrifice, and sleepless nights.

Sentimentality, pride, and passion were the positive drivers of Carrot's growth, which has doubled in size every year except for 2013. Germano and his then-girlfriend, now-wife slept on an inflatable mattress for eight months to put away money he felt was better spent on the company. They painted their old offices to save a thousand bucks on a painter ("That's another computer."). There isn't a day that's gone by since Carrot began that Germano hasn't done something productive for his company. The dark side of all this was an uncertain future staked on a debilitating fear of failure.

"I remember talking to my dad," Germano reminisces. "'Think of what you did and how far you've gone.' I was like, 'You don't get it.' It's not like I get off here. Well, shucks, that didn't work out, but I was a CEO of a digital agency. That place is hiring so let me just walk in there. No, no. I have eight years of failure. My fear is that I let down all the people who ever worked here, who ever believed in it. The fear of me failing those people…that was fucking hard. But it's what kept you going."

It's a known reality that 90% of startups fail, though Carrot flirts with the line of corporate and startup. The agency hangs out somewhere in between, which adds to their struggle of filling an odd niche, yet allows the company to be as off-the-wall as they want, eventually carving out an erudite understanding of media consumption. The company's known eccentricities and quirky genius-like charm draw in clients, like Red Bull at the end of 2011.

Tessa Barrera, the former global head of social media for Red Bull and the current head of social for the Lexis Agency based in London, became aware of Carrot's demeanor when she worked at Huge, a competitor agency also in Brooklyn. "For instance, when Huge laid off a few development resources, they put a sign in their windows, now hiring developers," Barrera said. "So I knew of them being fun."

Together, they made the Artograph, digitally connecting athletes to fans. In Barrera's eye's, they inherently got it.

"They understood how people consumed media and designed ideas and experiences around it, rather than trying to sell the fluff that most agencies do just to win a big budget. They didn't try to impart their ideas onto the brand; rather they understood the brand and found ways to translate it into consumer experiences that would be cool and the first of their kind."

There's Some Comfort In Growing Up

Age has been treating Carrot well. Uncalculated risk-taking doesn't happen so often anymore. Germano is 31, and has a 6-month-old to take care of now. The company announced an innovation hub in 2013 called Carrot Labs, a play area for testing out some of their extra-ambitious ideas to present as proven slam dunks to clients--ostensibly the earliest days' antithesis. It maybe douses punk cred, but is a wise choice for mitigating idea liability.

The company still leads by intuition, only with an approaching decade of experience under its belt. As cofounders of Digital Dumbo, Carrot has helped foster the digital community IRL. They've passed on old furniture to new startups vying to make it. As Germano gets older, he's taken a penchant for advising young entrepreneurs, a bit of a glimpse into an alternate universe of what Carrot could have been.

"They don't yet know what they're not supposed to know," Germano says. "And that means there's nothing blocking them from going anywhere. That's where you're pushing yourself as a person."

He specifically mentors Prolific Interactive, a mobile agency based in Dumbo as well, and One Mighty Roar, a product company based in Boston. Bobak Emamian, a cofounder of Prolific, has known Germano for years, both attending Quinnipiac.

"Prolific has always had the mentality of being young, hungry, and a true hustler in the startup community," Emamian says. "Mike has been a mentor who truly understands that outlook and has encouraged us to never lose that state of him. He keeps his team sharp and in the same mindset, no matter their size or success. That's not easy."

...But Maybe It's Best We Start Over Again

One thing Germano refuses to ever be is too comfortable. "My goal is to be as fearless as I can. I want to get afraid again, and that's what Vice is doing for me. I sold to Vice because it scared the shit out of me. And I haven't been scared in a very long time."

The union of the two companies reeks of logic; their origins share distinct parallels. Vice started as a free fanzine in Montreal, moved to Williamsburg in 1999, and flowered into a company valued at $1.4 billion. As fashionable as it's become to shit on Vice, its founders, Shane Smith, Suroosh Alvi, and Gavin McInnes have constructed the company they wanted to build from the ground up without many fucks to give, just as Germano and Co. have cut out their own path for Carrot. The energies and hunger at both companies are palpable, and neither are into following rules.

"As long as chaos is still here," Germano says, "things will be pretty cool."

Stun gun firm Taser is getting into the cloud storage game--and the move isn't as farfetched as it sounds.

Taser, which markets and sells a variety of technology for law enforcement, launched their new service last month. Evidence.com External Sharing is a cloud service designed specifically for law enforcement to share digital copies of evidence with lawyers and judges--and to create an extensive audit trail in the process to track who views what.

Although the Evidence.com service isn't the only cloud storage service to meet mandated privacy requirements for law enforcement and the legal system, it's one of a handful with marketing staff directly targeting cops.

Evidence's system is designed for law enforcement to securely share and transfer video footage without using flesh-and-blood couriers to deliver DVDs or video tapes. Jason Droege, Evidence's president, told Co.Labs that there are "security, auditability, and workflow-specific needs" for law enforcement and justice system-oriented IT products. Files are uploaded onto secure servers and police can generate URLs to view videos or hear audio that can be sent to lawyers, judges, or the media once they have established accounts with the service; each view and attempted file opening creates an audit trail which can later be used in court.

Creating an audit trail and protecting file security is a big deal for law enforcement IT teams, and one that has hampered them from adopting robust solutions like Dropbox for business: Unauthorized access to cloud files is a serious liability and ethical concern for law enforcement, who have concerns many other enterprise customers do not.

Droege added in a conversation that many law enforcement agencies "currently handle video evidence with DVDs and CD-Roms. They download data onto CD and DVDs, put it in a folder, hand it to a courier, it goes to the district attorney, who then may make another copy, and give it to the defense attorney. We feel discs arent as secure as Evidence.com, which gives more of an audit trail."

Taser launched Evidence in 2009 as a separate division directly aimed at law enforcement IT needs; Evidence in turn acquired popular photo-sharing service Familiar in late 2013--and reportedly outbid Twitter for the acquisition.

Familiar was shut down shortly after the Taser purchase; the startup's core technology, which lets users share photos or videos with a restricted list of email addresses, who then see the images instantly show up in digital photo frames or screensavers, strongly resembles Evidence's External Sharing feature.

Although Evidence did not give numbers on how many law enforcement agencies are using their cloud service, which soft-launched in Q4 2013 and officially launched in February, the police department of Newport News, Virginia has gone on record as a client. The cloud service is part of Evidence's larger portfolio of police tech products which also includes wearable cameras and a series of mobile apps for cops to use in the field.

Lisa Bettany came to the App Store from the world of photography. Her outsider perspective gave her an edge to the design process that her coder-collaborators didn't have, helping propel her app Camera+ to 10 million users and growing on iOS.

But when she was just starting out in app design, Bettany was shocked to find she had to learn to resist bullying from the engineers, who often wanted to make changes that would sacrifice the user experience she wanted.

Today, she's bringing her design ethic back home to small-town Canada and breaking away from the hustle of the tech world. "I'm more of a creative mind, and the coders were really tech-minded. Designing was an unpredictable process. Now that we're all in the same place, we can communicate better."

How A Creative Mind Wins

When Bettany had the idea to create a photography app on the iPhone, she wasn't completely unprepared for developing the product. She had immersed herself in digital photography for years, which made her the expert on the design functionalities that eventually came out in Camera+.

But working with coders meant they didn't see well eye-to-eye all the time. "I was more interested in getting the user aspect right than they were. They were very tech-minded. When you're the creative force, you kind of have to battle that," Bettany says. "But being naïve helped that process. It helped me focus on that singular purpose of answering that question of how to make a great photography app."

Her collaborators frequently rushed the process and tried to block some of the features that Bettany preferred. "With most of the filters, we had some nodes and even the one-tap button that just makes things better. They didn't have the skills to know how to make things aesthetically better," she says.

Keeping up on getting the functions right proved to Bettany that even the most tech-minded coder didn't have the chops to perfect the design process. Camera+'s prized filters are an example of how no amount of tech experience can make designing painless.

"At the time, there were no clear-cut ways of creating filters. So I said, 'Filters look like this.' The first ones looked horrible. Those were a battle. Most of the filters we developed were unplanned," Bettany says.

Creating Camera+ has made Bettany a veteran of app design, in a world separate from coding. But she still credits her unique attributes to her success in the tech world, those of which are not limited to her passion for photography. Bettany also has a master's degree in linguistics.

"I think having that background certainly helped with marketing aspects, just being able to write well," she says. "I think a lot of people with a coding background might not want to communicate as much."

Keeping Silicon Valley at a Distance

After having experienced Camera+'s success, Bettany is now busying herself with launching a new set of apps under her own company. The name is currently under wraps, but it matches the name of its flagship app. And with the new company comes a change of scene.

About a year ago, Bettany gave up hectic-city life, having once called Manhattan home, and set up shop in her hometown of Victoria, British Columbia. "The tech world sapped the life out of me. Maybe it's taken away my innocence," she says of her past. Victoria's comfortable surroundings are a quasi-satellite Silicon Valley that is breathing new life into her current projects. She was ready to move back home and regroup. "I was ready to settle in and start my new company. And get away from big cities."

There are a handful of tech companies that like to operate out of Victoria, she says, since Silicon Valley is not too far away. "I guess the proximity to Silicon Valley really helps since it's a two-hour direct flight," she says. "And it's really relaxed."

Plus, she wanted to actually see her coworkers in the same room. While working on Camera+, she collaborated with coders across the world, but rarely had in-person meetings. "I wanted to work with people that I could see face-to-face. When I was working on Camera+, we were always just all over the place, using Skype. But I didn't want it to stop there," Bettany says.

Bettany hesitates when I ask her if her new company could replicate the success of Camera+. "That's what keeps me up at night. Camera+ was the right app for the right time. I had no idea where that project was headed. I would like to do well, but there are a lot of factors," she says.

"I know more now than I did before, and I still focus on the end product rather than the process," Bettany adds. "But before, it was more day-to-day, you know, 'How is this going to work out?' But I have more control over the design process now. I guess that's a good thing."

When Danielle Weisberg and Carly Zakin started news aggregating startup theSkimm back in 2012, these wide-eyed young news junkies had the odds stacked against them. They had no tech experience, no business savvy, and--perhaps most dubious of all--they were roommates.

And yet, at barely a year old, theSkimm raised $1.1 million with major contributions from the firm Homebrew and Fast Company's own Most Creative People designee Troy Carter last November. Now running a steady business boasting an email open rate just shy of 50%--on average for media and publishing, the rate is 16.4%--Zakin and Weisberg at 27 years old are at the helm of an exponentially growing venture, no longer just a pet project.

In January of this year, they moved headquarters from their small New York apartment into an office space with a full team in tow. And the news summaries, which were initially female-oriented, now include a 30% male readership. We asked the founders to give us some perspective on their earlier days.

Validation--By Accident

What's incredible about theSkimm is not its technology--after all it's just an email newsletter--but how they verified their concept before writing a single line in English or in HTML. Rather than keep their idea secret, as many entrepreneurs are wont to do, they naively asked the advice of everyone they respected in the media industry. Here's what happened next.

For the uninitiated, theSkimm is a -style email newsletter that gives you the rundown on the day's top news stories--mainstream, general-interest digests about situations like the ouster of the Ukrainian president. (Think The Week, but in daily email form.)

"Carly and I had a big challenge in not only that we were first time entrepreneurs, but [we lacked] a traditional tech or business background," says Zakin. But they did know the media business; prior to founding theSkimm, Weisberg and Zakin were producers at NBC News who met while studying abroad in Rome in college. While working in media, they saw a hole in the news market as friends and coworkers would often complain that there was not enough time to know and understand everything that was happening in the news.

So with no formal training and a looming idea, the pair decided to do the one thing they knew best: They networked. Unknowingly, they were validating their idea, as engineering types like to say. They began talking to people about media business models, asking questions about "what were innovative media businesses that were coming up, and looking at how they were developing and their growth," Weisberg says.

"We really took a meeting with literally anyone who would talk to us," Zakin says. The group decided early on that they would work with people within various companies to get a deeper understanding of what allows any company to grow and what makes them curdle. They tapped anyone they could, from lawyers to a real estate agents, feeling like they could learn something from anyone who had built a business.

Finding Partners

After attending an ironically titled SkillShare class, "How to Find Your Business Partner," they met Alex Taub, former biz dev guy for Aviary and now a founder at SocialRank. He agreed to meet Zakin and Weisberg afterwards for coffee, which was the beginning of a pivotal friendship and more importantly, the beginning of their digital baby, theSkimm. Taub told them: "The only way that you'll ever fail is by not trying."

How Lack Of Experience Was A Blessing

Taking up Taub's advice, Zakin and Weisberg created the newsletter themselves, working feverishly through the night to get it delivered to readers' inboxes every morning. The newsletter aggregated the news in a cohesive, succinct, and friendly manner that appealed to a wide variety of people. But once the newsletter was a functioning entity, theSkimm was in dire need of external capital.

"Naivete was a blessing in certain ways," Weisberg says. "Fundraising is a really challenging, scary thing, and I think if we knew how challenging it would be, I don't know if we would have pursued this so aggressively."

Zakin says that their lack of knowledge helped them power through. There wasn't enough time or energy to be wasted on anxiety over whether or not the project would succeed, "because we really didn't know what was to come," she says.

Everyone Makes Mistakes

"Every day we pinch ourselves that this is really coming true," Zakin says. "We have worked so hard, we knock on wood every day because we are very superstitious but I think we are two people that came from media that get how to pitch things for press." They have never spent a dime on PR or marketing, but have received their fair share of media attention, attributing a lot of their "organic growth" as they call it, to word of mouth.

A recent post on their blog opened by saying "People make mistakes. New entrepreneurs make mistakes all f'ing day long. We've made a LOT…" They went on to explain four scenarios in which they have screwed up, including an intern they totally forgot to take advantage of and the time they forgot to show up for an important meeting with a successful cofounder of a big brand. After summarizing the mistakes made in theSkimm format, they outline lessons learned.

In it, Zakin and Weisberg candidly admit that they have been wrong, especially in the situation where they aimed too high financially, which abruptly ended negotiations afterward. Consequently, theSkimm lost out on capital and a potential mentor. Yet, they also validly point out that mentors should take time to use scenarios like that as a learning tool, rather than to destroy morale.

When the entrepreneurs forgot to schedule and attend an important meeting with a top-tier cofounder, Zakin and Weisberg avoided dwelling on the incident. After writing two apology letters and sending flowers, this specific cofounder was relentless in being unforgiving. The lesson Zakin and Weisberg instill is to be mindful not to waste anyone's time.

In addition, a pivotal takeaway Zakin and Weisberg learned was after vacillating too much with a potential investor. Because of the long wait time, the women lost out on a golden opportunity with the investor. They discovered that you should always be determined to go after what you want. A window of opportunity is not always open, therefore you need to take advantage of every chance you get, while you have it.

Zakin and Weisberg explain one more occasion where they forgot to fully utilize an employee. The lesson they learned was to identify particular areas where assistance is needed to maximize the company and your employee's potential. By merely having an additional, but untapped employee for the sake of having "help" is a waste of time and energy on both ends.

Zakin thinks the blog post is an example of showing that "they are not too big for their britches."

"People make mistakes, we are learning," Zakin says. "Anytime we talk to a big company, we say that we're figuring out how we do things. And that it works sometimes and sometimes it doesn't. But it is really important for us from a branding perspective to be very honest."

Learning From Those Mistakes

One of the key lessons Weisberg and Zakin have learned from is "knowing the fine line between not asking enough and asking way too much." Weisberg goes on to say that "if you're not going to ask for what your business needs, you're not just going to get it. That was something that seems intuitive but actually putting it into practice was something learned." This came in handy when they were putting together the company's budget, negotiating, and finding backing.

"We don't think of things in terms of boundaries," Weisberg says. And as the company flourishes the cofounders try and make their vision become a reality under this billboarded idea. "It's our first time doing this, so we're going to think big," she says.

When SAP launched their sports analytics division in 2013, they never dreamed that it would end up creating a whole new adjacent business: small business analytics. That's right: SAP's work with the NBA taught them how to sell into mom-and-pop businesses, a market they had previously never touched.

So how did they get from the NBA to SMB?

Sports As a Playground

Consider the analytical experiment that is NBA.com/STATS and the Video Box Score--the system now captures every dribble. By working to document, process, and display virtually every imaginable statistic in basketball games, SAP is showing businesses of all kinds the seemingly endless variety of real-time analytics at their fingertips. And these solutions aren't relegated to sports alone.

"There's the business of sports--how much we make by selling analytics to the league or to the teams," says SAP CMO Jonathan Becher. "[Then] there's the transfer over to everybody else," he says--the rest of the small-to-medium business market that currently doesn't pay for data-driven business intelligence. Of course, that long tail is where the big money is. But SAP had no experience working with SMB customers.

Or did they?

Major sports franchises are huge brands, but compared to SAP's normal enterprise clients, they are actually relatively small businesses--often with front offices of less than 50 people. SAP recognized the parallels between teams and small businesses almost immediately. And while major leagues and professional sports franchises have graced the pages of SAP's portfolio for less than three years now, the commonalities they've discovered between sports business and your business might surprise you.

Generally, smaller businesses resist analytics. Believing they are too small to benefit from Big Data, many modestly sized companies rely on instinct and tactile experience. "They don't want to use analytics," Becher says. "They tend to be more family owned, maybe even second or third generation and when you show them the data, they go, 'Yeah... I know where I need to put the next grocery store,' or, 'I know what item should go on the restaurant menu,' and I know all this because this is all I do and I don't care about the data.' You're going to launch a product, don't you wanna know the feedback in every state? Do people really want to supersize?' But if you go into these businesses and try applying analytics on day one, they don't want it."

"What's really interesting is, when you show them that their gut, in sports, is not nearly as accurate as what the data says. [People] believe Kobe is the best at hitting the clutch shot, when in fact he's only in the top five, and they start going, 'Huh... Maybe all those close-held beliefs I have about my business are wrong. Maybe I need data as well,'" he says.

Quantifying Team (And Company) Culture

One of the first systems SAP built within the sports sphere was a drafting application for the San Francisco 49ers back in March 2013. Before SAP's involvement, the Niners--like most pro sports teams--drafted players annually based on performance in the college/pro-am ranks and a variety of dissociated and virtually unrelated physical tests at a combine.

"But those traditional statistics don't always translate, and sometimes they don't mean a thing. But that's how we draft people in business as well," says Becher. "Who's got the highest GPA from Harvard? Who's got the best SAT scores?"

So SAP built software that measured more meaningful and desirable traits, like team fit. "We're pulling that into our more traditional HR business as well. Now [non-sports] businesses are asking us for that," he says.

Working with sports teams has taught SAP how to talk to all sorts of SMB proprietors, many of them fans. "Even though they're billion dollar businesses, [sports teams] don't get IT very often. So part of what we're trying to do is make things a lot simpler, and that has worked tremendously. Our sales of analytics to those companies that didn't really get it before [our involvement in sports] have skyrocketed," says Becher.

Chaotic Moon is a creative technology studio based in Austin, Texas.

When the e-book subscription app Oyster launched last year, it was quickly dubbed "the Netflix of books" by the press. But since then, analytics and anecdotes have demonstrated that Oyster's customers actually consume the written word differently from the content they get on other subscription services like Netflix or Spotify.

What they've learned could have ramifications for publications and sites like ours, whose primary product is written content. So what's so different about stuff you read?

"Books are one of the best gifts to give someone," says Willem Van Lancker, an Oyster cofounder and the company's chief product officer. "People really responded fantastically to giving a gift of hundreds of thousands of books."

Van Lacker says this is something really distinctive about being a book business; feature requests for gifting starting rolling in right away. Other subscription reading platforms didn't add gift subscriptions until later in their life cycles, says Van Lancker--presumably because no one had ever considered that books were (for whatever reason) more giftable than regular media.

Oyster also learned that while customers use their iPhones for "short bursts" of reading during the day, many do the bulk of their reading on days off and in the evening before bed, which means customer service inquiries swing nocturnal.

"The biggest bulk of inquiries and questions we get are between 8 p.m. and 2 a.m. Eastern Time," he says. His customer service team rejiggered their schedules to better match their customers'.

Nighttime reading also meant Oyster's developers took pains to make sure the app works well in low light, says Van Lancker. "We took a lot of time standing in closets with our product," he says.

Different genres of literature are popular at different times of day, he says: romance novels are popular in the wee hours of the morning, while mysteries and thrillers get more reading around rush hour.

And different states have different tastes as well. History is more widely read in Michigan and New York, Van Lancker says, while romance is bigger in Texas and Georgia.

"Any given member in Georgia is about 30% more likely to read a romance book than a history book," he says.

Overall, fiction, literature and business are among the most popular categories the app offers. Starbucks CEO Howard Schultz's memoir Onward has been quite popular, says Van Lancker.

All of this information can naturally be fed into Oyster's automated recommendation system, but even in the age of big data, Van Lancker believes handcrafted editorial recommendations can be at least as important to customers.

"We've seen a connection between crafting Oyster's editorial books--how Oyster kind of feels like a corner bookstore--and people really responding to that," he says. "Books are kind of a special medium, and because you're going to be digging into it for five to 10 hours, having an extra recommendation from someone you come to trust is really important."

Oyster's also learned to heed product recommendations from its entire team, he says.

"We have people from publishing and books, and people from technology," he says. "It's a diverse team and I think it's really worked out well to build a product that has a lot of emotion wrapped up in it."

Similarly, Oyster's made sure to highlight books from a variety of authors and presses big and small, not just surefire bestsellers.

"We make a point to kind of pull in picks from all of our publishing houses and authors," he says. "Just like a great bookstore that has a table laid out to introduce people to new ideas and new stories."

The subscription model can let people explore different books a little more freely and even bring some lapsed bookworms back into the fold, he says.

"The most exciting thing for us is taking someone who isn't a reader and reintroducing them to books," he says, citing subscriber feedback. "They weren't reading books at all, and now Oyster has brought them back into it, and now they're reading a book a month."

We all know that vacations can help us return refreshed, but the whole idea is that they're a temporary respite. But Crowdtilt is taking the restorative qualities of the vacation to their next logical conclusion.

They're called Hackations, and they work like this. Engineers are allowed to take a week away from the office, to travel anywhere in the world to get their work done faster. The engineer pays for his or her own plane or train tickets, but Crowdtilt covers the rest.

Does it work?

Increase Your Efficiency

"Like everything we do here at Crowdtilt, the hackation came to us through experimentation," says Beshara. The company just went through a major engineering push to launch CrowdtiltOpen, a free-to-license crowfunding platform based on its own technology. The hackation concept came to them as a panacea for stress.

"We were still at 12 people at the time, working in a tiny little converted apartment that was our first office space," he says. "Even with just 12 people, there were already a ton of meetings and other distractions going on. At the time, we had a really serious deadline that we needed to hit. It was a week away, and we knew we needed three engineers to hammer out the last 10% of it."

Ten percent may not sound like much, but Beshara knew that at the current pace it was at least three weeks' worth of work.

"We rented out an Airbnb [apartment] and sent three engineers out of the office to work in it," he continues. "Not only did the project get finished, but they actually came back energized. They got to do what they love doing--which is writing software--and they got to do it 12 hours a day with no distractions. This was before we formalized the concept of a hackation, but the idea started right there."

"The aim was to build a whole new API, complete with new interface," says Will Wolf, Crowdtilt's newly promoted director of technology. "We thought it was pretty ambitious. We felt that it was likely to take a minimum of two weeks, probably three. We ended up getting it done in six days."

Costs And Rewards

Nine months later, the so-called "hackations" have been officially added as part of Crowdtilt's business plan. Anyone can apply to take one--and so far the results have been extremely positive.

"Everyone's best work is done when they don't feel that it's work," Beshara says. "In a typical day at Crowdtilt you may be called into three or four different meetings. If your focus is broken up regularly, that can kill a day. If you know you have a meeting in 30 minutes it means that you're no longer focused. Then when you get back to your desk from the meeting, you're distracted by everything you've just discussed. Trying to re-engage and refocus can be extremely draining. Even though it's only a few short meetings out of an entire day, the zone that all of us look to get into [to work effectively] is completely disrupted."

Crowdtilt isn't the only tech company to loosen the strings on its engineers, of course. Google famously created some of its best innovations--including Gmail, AdSense, Google Reader, and Google Talk--by giving engineers 20% of their time each week to pursue passion projects, although it ditched the policy last year.

LinkedIn also has InCubator--a program that gives engineers time away from their regular duties to work on new product ideas. Apple, for its part, has Blue Sky, which allows some workers to spend a couple of weeks working on pet projects; while Microsoft has the Garage, which allows employees to build their own products using Microsoft resources.

While coding away in a deserted beach hut, or overlooking Venice's Grand Canal, seems like a typically flamboyant startup indulgence, Beshara says that from a business perspective it actually proves to be a cost-effective strategy.

"The costs offset themselves remarkably well," he says. "If people are able to knock something up in one week that might have taken three weeks, it's absolutely worth it when you factor in the extra two weeks that a product can be out there in the open earning revenue. We've got an application at the moment to send some engineers to Costa Rica, and once you add up all the costs it's only around $2,400. That's absolutely worth it to be able to accelerate a particular project."

Hackation Guidelines

The hackation does, however, come with a few important guidelines.

"There is a process to the idea, and that's what gives it integrity," Beshara says. "It can't just be a matter of someone not coming into work because they're now working from the beach in Southeast Asia or something like that. The application process is pretty simple: We ask how long it will take someone to complete their work according to the current estimate in-office; where they're planning to go and work if the hackation is approved; and how have they performed on hackations before?"

This last point is the most important.

"When you get back from the hackation, at noon the next day you have to present your work to the company--and it's got to be production ready," Beshara continues. "It has to be tested, finished, and seconds away from being deployed in the product. If you miss that deadline then it's very unlikely that your application will be approved for the next hackation."

New Spaces, New Ideas

A hackation is about more than just a reward for doing good work. New locations can offer up new ways of thinking about certain problems. High tech is full of stories of problems that were solved in new ways because of some outside stimuli. For example, Steve Jobs and Jony Ive came up with the idea for the G4 iMac's elegant appearance while looking at the sunflowers in Jobs's garden.

"Every year I do something wild with the garden, and this time it involved masses of sunflowers, with a sunflower house for the kids," Jobs's wife told biographer Walter Isaacson. "Jony and Steve were riffing on their design problem, then Jony asked, 'What if the screen was separated from the base like a sunflower?'"

A few designs later, and an iconic computer was born. Would Jobs and Ive have come up with the same solution had they been sitting in his office at the Apple Campus in Cupertino? Possibly, but they didn't--it was dreamed up in a garden filled with sunflowers.

"Physical spaces have a massive effect on the output of work," Beshara says. "How loud or quiet is your office? How close are you working next to people? There's a huge amount of work available on this subject, and it's something that has dictated how we design our office space. But I'd also take this a step further and suggest that being outside the office altogether, in a brand-new environment, allows people to think about problems in drastically different ways."

He points to a recent working holiday in Hawaii (his first vacation in two years), during which he was able to take a step back and reevaluate several important strategic decisions for Crowtilt.

"I'd hope that a drastically new location brings with it a drastically new perspective," he says.

Rewriting The Rule Book

There is a degree to which any startup built by young founders--without a whole lot of big business experience behind them--is built on naivete.

"There are a lot of pros and cons being young founders setting up a business," Beshara says. "I had no business company experience whatsoever coming into Crowdtilt. What that means is that as a young founder you can approach starting a company with a pretty clean slate. In our case, there were a few different things that we did, where it didn't even really factor into our thinking that these weren't things that other companies weren't doing. We set out to create our own original, unique culture--based on the things we felt would help our team be as productive as possible."

For a while, Beshara and his cofounder, Khaled Hussein, worried about trying to incorporate all the established rules they could find into their existing company framework. Then they had a revelation.

"We did a lot of things that were by the book, and it was about a year in that we realized, Hey, nobody's ever built a company like this in March 2014 before." Beshara says. "If that's the case, then it's absolutely worth reassessing how things were done before, and whether this still makes sense to apply the same logic going forward."

This is where a concept like the hackation comes in. "Something like that wouldn't have been possible 10, 15, or 20 years ago," Beshara continues. "All of the data and anecdotes about companies built then--when you had to have a CPU tower tied to a desk, when you had to have a massive monitor, when you had to have paired programming, where you were sitting right next to the person you were programming with--are open to questioning. Now you have things like Git, or a MacBook Pro, which is more powerful than almost any CPU tower someone would buy today. You have so many more tools at your disposal for remote working. You really don't have to do things like they were done in the past."

The Merits Of Passion Projects

Like the best product features or technologies, these approaches can't simply be bolted on to an existing company model, but must instead be a part of the company's underlying ethos and philosophy if they're going to be successful in the long run.

"When you're a startup, the only real advantage or core competency that you have over incumbent businesses is speed," Beshara says. "You have to optimize in a way that makes it possible for you to move fast. Going into Crowdtilt our mentality was always about how we can ensure that we can continue to move as fast as possible, and also how we incorporate that idea into the structure of the company."

"From the beginning, that's been a part of the company--whenever we needed to crank out a new feature or a whole new product we can just lock ourselves in a room to churn out code really quickly," says Will Wolf. "We've always tried to eliminate distractions, turn off our phones, not check our email, and just spend a few days focused completely on a project. We've done this since the beginning of the company, without really even thinking about it. It's just what works."

Servant Leadership

Beshara says that it ties neatly into the company's theme of servant leadership. At Crowdtilt the org chart is, quite literally, printed upside down, with Beshara and cofounder Hussein at the bottom. "It's clear to everyone in the company that their role is not to climb up the ladder, but to serve the greatest number of people and to help them excel at what they do," Beshara says.

The concept of servant-leadership was first coined by business theorist Robert K. Greenleaf in a 1970 essay, entitled "The Servant As Leader."

"The servant-leader is servant first," says Greenleaf, author of Servant Leadership: A Journey Into the Nature of Legitimate Power and Greatness. "It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions."

The concept of servant leadership applies in the case of Crowdtilt's hackations because it is about empowering employees. "It flips around the way we think about problems," Beshara says. "If you were to tell a software engineer that they needed to have something completed within a week it could be a major source of depression or anxiety to them. However, if they come to you and say, 'Hey, this project is scheduled to be finished by mid-April, but I know it could be done by March 18.' Psychologically it completed reverses the roles.

It's them applying to get the work done faster."

How do you lure new talent? During a tech industry boom like this, exciting products and swanky offices certainly help, but that's not all it takes. These days, creative hiring practices can go a long way. We spoke with three companies about the innovative ways they hire and inspire the best employees.

Hire People From Your Community

At DuckDuckGo, an anonymous search engine based outside Philadelphia, new employees always come from the community of users and hackers already immersed in the product. It's no coincidence.

"As a small, tight-knit team, culture fit is the most important thing and that's why we only hire full-time staff from within," says Gabriel Weinberg, CEO of DuckDuckGo. "I call this process 'inbound hiring.'"

Weinberg says inbound hiring involves only hiring people that send you "inbound" requests. These are people--perhaps users, or someone you've met in a coffee shop and told about your company--who contact you directly without being prompted by an ad or a tweet offering a job opening.

Inbound hires might not even be looking for a job. They're often just a user who reaches out because they want to get involved in some way, whether it's offering their time on an open source project or making a feature request. To Weinberg, the willingness of these people to reach out with no obvious financial incentive makes them the best kind of potential employees.

Any potential hire that is looking for a job at DuckDuckGo--even if they are a great candidate--must first be active in the company's open source community before they can become a full-time employee.

Inbound hiring, contrary to what you may think, isn't something from the latest fad book for recruiters. Weinberg actually came up with the concept based on a hunch and decided to run with it. After being the sole employee of DuckDuckGo for four years Weinberg hired the company's first employee based on his method in September of 2011.

"Past experience taught me that traditional search and hiring processes don't often identify the candidates that offer the best cultural fit," Weinberg says. "Inbound hiring looks more closely at one's motivation and drive versus their specific experience and skills, and shows what they're capable of instead of solely focusing on what they've already accomplished."

Inbound Hiring: Slow, But Worth It

Weinberg admits that inbound hiring takes a bit longer than traditional hiring processes, but he says it has helped DuckDuckGo create a passionate, entrepreneurial, and creative team that has strengthened the company's larger community and helped them effectively manage DuckDuckGo's large growth, particularly in the past year with the company now handling over 100,000,000 direct searches monthly. Since the first inbound hire in 2011 the company has grown to almost 20 people and every single full- and part-time employee has been an inbound hire.

Of course, telling a stellar job candidate that first they'll have to sign on for no pay before going full-time may be discouraging. Given that, it's easy to wonder if DuckDuckGo has missed out on any excellent hires.

"It's difficult to say since this is the only process we have had. But probably," he admits. "The flipside is that we have very low attrition because everyone is an excellent fit for the long term."

But inbound hiring does have its limitations.

"I think it works for us in particular because of the company and company culture we're trying to build," he says. "We are a very mission-driven company and we also want to stay small with a team of very talented individuals that can operate with relatively little management overhead. In other words, if we set out to hire fifty engineers tomorrow this process wouldn't work well."

As for those companies that might want to give his method a try?

"Develop a community around your mission," he says. "Without both this process will not work."

Ask Full-Time Recruits To Start Part-Time

With all the hype around messaging apps today--thanks to Facebook buying WhatsApp for $19 billion--you'd think a growing messaging company like Kik, which already has 100 million users, would want to snap up the best hires right away. But instead, anyone who wants to work for them is limited to being part-time at first.

"There is a better way to assess potential candidates for hire than the traditional interviews that everyone hates," according to Kik CEO Ted Livingston. "Kik has a very different approach. We still do interviews, but the most important part of our decision is our part-time process."

"When we have candidates we're seriously considering, we offer them the opportunity to work with us on a part-time basis on a project related to what they would be doing if they joined the team full-time. We pay them for their time, and we set it up so that they work side by side with their potential future colleagues. They join us for the meals we bring each day, so they have a real chance to get to know the company--and we get to know them at the same time."

A startup asking potential employees to work part-time at first seems like the perfect way to turn good candidates away. After all, what if the candidate already has a full-time job and can't take the financial hit by leaving it for a part-time one?

"Sometimes this is a challenging process," Livingston admits. "For candidates who are working full-time in another company, we offer them the option to work evenings or weekends, to take a short vacation from their regular job, or to open-source a project that would show us their chops, and join us for a team event to assess their fit."

Understandably, Kik's process would seem to appeal more to freelancers. Since they have no full-time job to leave, they have the flexibility to scale back their other work to fit their new part-time gig at Kik into their schedule.

Those that do sign on to Kik's hiring process will commence their part-time project, at the end of which the candidate presents their work. The candidate is then discussed among Kik's "hiring tribunal." This tribunal is made up of people who have worked with the candidate during their project. The hiring tribunal then makes the final decision about whether or not to offer the candidate a full-time position.

While it's obvious those looking for a full-time job right away may be put off by Kik's hiring process, Livingston says the company's process ultimately works best for both the full-time hires and Kik.

"As a result of our process, we have a very low level of both voluntary and involuntary termination at Kik, and we have a very high level of confidence that new hires will be able to fit into both our culture and our work style by the time they start."

Trust Your New Hires To Show Up Without Giving Them Any Set Hours

Sam Decker is the CEO of Mass Relevance, a company that works with over 350 high-profile clients to create real-time consumer engagement by aggregating, filtering, and re-displaying content from any social network to any digital property using its SaaS platform. If you've seen those real-time social media polls on CNN or The Today Show, chances are Mass Relevance's solutions are behind them.

Unlike DuckDuckGo and Kik, Decker believes the best way to get and maintain great employees is to go through a traditional hiring practice. After that, however, employment at Mass Relevance is anything but conventional. The company abides by a principle it calls Freesponsibility. With Freesponsibility there are no set work hours and there's also unlimited vacation time for every single employee from the day they start.

Freesponsibility grew from Decker's beliefs that everyone in the company should be treated as an entrepreneur. And entrepreneurs, after all, rarely do their best work working a set 9 to 5.

While hiring someone you just met and then telling them they have no set hours and can take a vacation tomorrow, if they so choose, may sound a little crazy to most employers, Decker believes other companies should look into the practice because he says Freesponsibility isn't simply built on a foundation of blind trust, it's built on a psychological and social phenomenon called the Pygmalion Effect.

"The no set work hours and unlimited vacation are just a small part of a much bigger idea," Decker says. "The Pygmalion Effect says that the more trust you put in someone, the more they will fulfill that trust."

While Mass Relevance's Freesponsibility may seem radical, it's not the only company empowering employees in this fashion. Indeed, companies like GitHub and Valve work on an open allocation basis, while Medium, Whole Foods, and Zappos employees work as part of a holacracy.

"We're hiring people that love what they do, we provide challenges and task them with solving problems in innovative ways every day," Decker says when I ask how he can be certain employees won't take advantage of Freesponsibility. "We have created an environment where people want to come to work."

"Where we've hired wrong is we have people taking advantage of the perks that come with the values. We hire and fire based on our values, so if someone takes advantage, they won't be around long," Decker says. "But they were also never the entrepreneur, the problem solver, the innovator we were looking for. Those types of people want to forge their path and make their mark within the company, and you have to show up to do that."

And there's absolutely no rules surrounding Freesponsibility?

"We haven't found that we need to make rules surrounding it," Decker says. "By instilling the bigger idea of Freesponsibility--solving problems and taking initiative--we don't have to babysit people."

Decker also notes that Freesponsibility has paid off exceptionally well for the company from both a business and a cultural perspective.

"Business-wise, we hired one team member for our Sales team and he has taken the initiative to completely shape the Sports vertical. It is now our fastest growing vertical and Freesponsibility allowed him to create the path, identify opportunities and best practices, and build a team to support goals."

"Culture-wise, several team members have initiated passion projects, like a monthly foodie series and summer movie series. The things bring our team together to enjoy learning new things completely separate from their roles. It allows team members to shine and share things that matter to them outside of their day-to-day."

As for the advice Decker would give to other companies who want to commence a system like Freesponsibility, he says it's the individual company's leadership's mentality that will determine if it's successful or not.

"It's about initiative, passion, freedom to grow the company within the company. You give people the trust and freedom to come to the table with good ideas that make a difference and they will. Hire well, cultivate talent, and give your people the freedom to achieve incredible things."

Most of all, he says, "sometimes you need to know when to get out of the way and have faith in the talent you've hired."

South By Southwest Interactive may be starting to wind down, but for music fans, the party is only about to begin. Whether you've made the trek down to Austin or are Twitter-envying those that did, there's a massive amount of Texas-bound musicians worth exploring. With over 2,000 artists playing this year, it's hard to wade through the madness. So we made you this Spotify playlist.

See Also: Memories From 20 Years of SXSW Interactive

With over 50 tracks, it's a diverse list, starting with a wide range of genres: alt rock, indie rock, americana, folk, and blues. From there it goes into everything from electropop and hipster anthems to downbeat electronica and a few R&B-influenced tracks.

You can stream the playlist here. For a list of shows by each artist in the playlist, search for the band on SXSW's official site here. Happy listening!

Jackie Shuman (@jackieprobably) is Head of Sync at Crush Music and an independent music supervisor. She specializes in film, television, and commercial placements for artists.

FiftyThree, the company behind the drawing app Paper and the hardware stylus Pencil, is moving into a new office. We spoke to architect Laura Gonzalez Fierro about the jaw-dropping new digs. We figured we'd also use the opportunity to ask CEO Georg Petschnigg what the company is up to.

Q&A: FiftyThree CEO Georg Petschnigg

It's been a busy year for the company. How has FiftyThree changed in the last year?

Last year was transformative for FiftyThree. We have a real shot at changing the very nature of how people create and we are doing this through tools, partners, and our community. Our iPad app Paper is about capturing ideas. We then introduced Pencil, our first hardware product, which is about getting people thinking viscerally and intuitively expressing themselves with their hands. Along the way we collaborated with brands to remove barriers. With Moleskine for example, we launched Book, a beautiful way to bring your ideas to life in printed form. We also teamed with the Historic Royal Palaces in London where we worked on our first exhibit.

What are some challenges the company has overcome?

One challenge we had to overcome is the perception that iPads are for content consumption and gaming only. FiftyThree's Paper and Pencil changed that, and these products are the result of a very unique product development process. We have one designer for every engineer, which lets us prototype aesthetics and functionality rapidly and at great fidelity before we start building.

Any advice for other startups?

While building your first product, keep your costs low. Work out of your own apartment. Once you have a product and revenues, be ready to grow and when it comes to space, go bigger. The cost of outgrowing a space too quickly is significant. Even at the sky-high prices in New York, the cost of 2000-3000 square feet is about the cost of one full-time salary. In bad times, don't hire that one person. In good times, you'll be glad to have room for 10 more.

Space shapes thinking. Space envelopes the body. We are products of our environment and spend hours at the office, so invest in it.

How will the new office change how people work?

FiftyThree began in my apartment, and as the team grew, we took over the 5th-floor apartment, and then the 6th. Our initial office being my apartment certainly qualified us as a startup scrappy, but it also introduces a subtle psychological barrier: The team never fully felt comfortable making the place theirs. After all, it's where I lived. Moving into the new space will change that ownership dynamic in a positive way.

There are some immediate ways how we made the space at 60 Hudson suit our workflow. For example, we included built-in poster ledges and storage for the 4'x8' foam-core boards we use to display and review our work. In true New York fashion, all of the space is multi-functional: Our lounge can be used as an ad-hoc meeting space or a more formal auditorium. You can transform the kitchen into a massive theater by lowering a 16' projection screen in front of it.

Another key aspect was to build a friendly space that puts you in a psychological state of flow. This mean we designed custom height-adjustable desks, the space is flooded with natural light, and a tree is in the middle.

Is there anything specific that having a new office will allow, physically or mentally?

We are lucky to be part of a rich and thriving community of creators. The new office space will let us bring our community together. For example, March 18th we are hosting Austin Kleon, who we've long admired. Bringing community and ideas together is also a key theme for our product development, and this year we are working on a collaboration service.

Q&A: Architect Laura Gonzalez Fierro of +ADD

Where does FiftyThree, a company all about design and color, start in decorating and building a new office?

Working with FiftyThree was very nourishing since the beginning when I first met with Georg he shared a graphic presentation expressing their wishes, needs, color palette, and challenges as a company. From an architectural point of view that was extremely helpful because we also operate in a visual way, so starting with a graphic dialog made us start with a very natural conversation in terms of design.

I also learnt how important good craftsmanship, quality, function, and aesthetics were to them as all their products are created under the same principles.

It was at the very beginning when we realized through one of Georg's telling quotes what our main concept was: Honest materials and understated confidence. Under this creed--that we never lost sight of--we created a space that involved a very honest and open layout that promoted teamwork and collaboration.

The selection of materials--walnut wood, blackened steel, glass, and concrete complemented by a couple of accents of marble became our palette to start drawing what became an office space that reflects our client's pillars. In a very simple but organized way we created a variation of spaces that enhanced the everyday working experience, but also developed unknown or new ways of working. For example, the wood platforms in the center of the space consist of an elevated space that has the function to gather people but it also allows you to have a different perspective of the space by the simple fact that they are elevated.

What are the initial challenges of a new office space?

Every interior space in New York City has its own particular challenges and constraints, from the type of building administration and the code regulations to the physical limitations and/or advantages of the space.

Usually the planning and approval phase is longer than the actual construction of the space. This is always a challenge, as we need to make quick decisions and be responsible about them in order to stick to a schedule, budget, and expectations from the client.

Unforeseen conditions can make us take a different route, a raise in the cost of materials can help us explore new possibilities, and dealing with skeptic contractors can create new and novel designs. In the case of 60 Hudson we worked with union labor and we went through one of the most nourishing experiences, dealing with extremely disciplined and organized contractors with lots of experience but above all eager to work along with the architect and open to make new things or things that are not necessarily their regular corporate interior's project.

How does the new office change how people work?

Human beings have always demonstrated the need for shelter and dwelling. As humans we feel more comfortable if we have a space that protects us and that space many times becomes an extension of our persona.

FiftyThree HQ was conceived as an extension of what FiftyThree is--a group of extremely talented people that are genuine and create the most authentic and perfectly designed products for everyday life.

My main motivation as an architect is that I can make people's life better by creating a space that talks to them and understand them and inspires them to create.

Feeling connected with a space can certainly enhance the design process by providing an office space that is functional, that echoes their own principles and values, and reflects their own aesthetics.