Quip Is A Beautiful New Mobile-First Word Processor From Ex-Facebook CTO Bret Taylor

30 years later and our word processing software hasn’t evolved, not even to adapt to mobile. That changes tonight with the launch of Quip, a freemium new word processing app from former Facebook CTO Bret Taylor’s new startup. Quip works on desktop but is designed for mobile. It automatically formats documents to the size of your screen, offers in-app collaboration and messaging, and even works offline.

“Quip is a modern word processor optimized for the era of tablets and phones”, Taylor tells me. We’re in the middle of a transition away from the desktop computer, yet word processors have stagnated. For dramatic effect, Taylor dropped a screenshot of MacWrite (shown to the right) into the Quip introduction post, and told me “It’s comical how similar that looks to what we use today.”

The shift to mobile is so seismic that it trumps the importance of all the legacy word processing features and “gives us an opportunity to change this software”, Taylor says.

That’s an opportunity Microsoft was stupid to wait so long to address. It’s only just getting a real version of mobile Office out there. While full featured, it’s billed as a mobile companion to Office for desktop rather than truly mobile-first, and on iOS it’s only for Office 365 subscribers. Quip’s freemium model has a lot of runway when you think about how widespread the need for document editing is.

Quip looks polished, which makes sense considering Taylor specifically left Facebook in June 2012 to start the company with Kevin Gibbs, the father of Google Apps Engine. Taylor redirected his backchannel.org site to Quip.com in December 2012, revealing the startup’s name to the world. While no details were released, our own Ingrid Lunden sniffed out that it might be a collaborative writing app based on the pen in the app’s icon and a patent for cloud collaboration awarded to the startup.

Now we have all info. So what makes Quip different?

First it adapts documents to whatever size or shape screen you’re working on. If you’re on an iPhone, an embedded photo could appear full-width, but on an iPad it would appear on the right surrounded by text.

The collaboration tools might be the most exciting part. You can share any document with another user, and when they first open it you’ll get a notification. Taylor says this lets you jump in and walk them through the doc using Quip’s internal messaging system. “It feels like sitting at a desk with someone around a piece of paper” Taylor tells me.

All your collaborative edits and messages are turned into a chat-like thread you can follow. To find your future co-writers, Quip asks you to sign in with Google and let it access your contacts. That might seem like a snub to Facebook, but really it just denotes that Quip is built for serious business, not just playing around with your friends.

On the iPad you’ll see the communication stream right next to your document, whereas you slide it out on iPhone. You can @ mention people to call their attention within documents, quickly add images, link out to other Quip docs or folders, and use formatting tools to add your own style. I love the “Use most recent photo” option alongside the standard “Take with camera” and “Select from Photos”, though its a shame that’s only for Quip messaging and not document editing.

From the Quip “desktop” home page of the app you can see all your current documents and check your inbox for new updates and messages. If your connection drops while you’re writing, no sweat. Quip will synchronize your documents back to the cloud when you get your connection back. Taylor says he loves how seamless this works while he commutes on San Francisco’s BART subway which has spotty mobile reception.

The elephant in the room is how Quip works with Microsoft Word. Right now there’s no special way to import docs from Word or export them to the old girl. Quip only spits out .PDFs. However, Taylor says his team worked hard on flawless copy and paste. Quip will preserve formatting when you copy text to or from Word.

Quip is free for personal use, but charges $12 a month per user for a business license that lets you collaborate with more people. It’s available now for iPhone, iPad, and desktop, and Taylor says an Android app is in the works. Typing tools were a lucrative business for Microsoft on the desktop. That opportunity in mobile let Quip raise $15 million in Series A funding led by Peter Fenton at Benchmark Capital, which pays for its 12-person team. This isn’t Taylor’s first startup rodeo, luckily. After co-creating Google Maps, he built FriendFeed which later sold to Facebook.

Quip will have to displace the now-misinformed idea that word processing is best done on the desktop. The other writing apps it will face off with include Apple’s own Pages, stripped down but cheap apps like iA Writer, and more advanced but pricey options like Textilus.

Quip does have a bit of a learning curve. Not necessarily because there’s much wrong with the design, but because you have to unlearn a lifetime of Microsoft Clippy-instilled habits. There are a few awkward gestures in Quip for iPhone. You pull down from the top to reveal your desktop, but I found myself accidentally opening the iOS notification tray.

Once you get the hang of Quip, though, it seems like it could finally let you express your inner wordsmith from your couch, commute, or coffee spot.

Postscript

Quip might be a word processing app now, but its ambitions could be much bigger. It combines features of some of the top productivity, collaboration, and workplace communication apps. It may be able to steal time away from Google Docs, Hangouts (Gchat), Asana, Yammer, and Skype. Today it only replaces those tools for tasks surrounding text document editing. But imagine if once Quip gets word processing sorted, it goes after spreadsheets, or presentations.

Quip has the team and funding to go hard at this huge space. I wouldn’t be surprised if it became an hot acquisition target. The only problem is Taylor and Gibbs have earned their nest eggs already, and might be able to hold out and see this through

The applications of an integrated communication and collaboration platform are vast. If no one else builds this mobile-first, and Quip nails the user experience, we could be looking at the start of a big company.

Get Ready For TechCrunch TV's Tour Of The New Hollywood, Starting Next Week

Over the last several years, we’ve seen a new group of digital media companies emerge in Los Angeles, driven by the growth of YouTube as a platform for distribution of video content. What started out as a cottage industry built around YouTube is becoming a pretty massive business, with L.A. at the center of it all.

Companies like Machinima, Maker Studios, and Fullscreen were founded with the idea of helping creators to expand their audiences by improving their production value, collaborating with other YouTubers, and adopting a series of best practices.

That said, not all YouTube networks are created equal: While some focus on providing creators with tools for high-quality production, others have developed technical tools to help them succeed. Some are focused on specific verticals, like gaming or food, while others are built around aggregating channels with massive audiences and growing them through collaborations.

TechCrunch TV spent several days in L.A. meeting with a number of digital media companies, including Machinima, Fullscreen, Tastemade, ZEFR, Big Frame, Maker Studios, and Funny or Die. During those visits we met with executives and creators, toured production facilities, and got to know the people building this whole new ecosystem of video content. We also visited YouTube Space L.A., a huge facility filled with equipment for shooting, editing, and other post-production activities that is free and open to YouTube creators.

On Mondays and Wednesdays over the next four weeks, we’ll be rolling out a series of videos showing off all the best from our meetings at those companies, giving you a better feel for what each has to offer and what creators can expect when they sign up for a multichannel network.

YouTube provides a platform for you to create, connect and discover the world’s videos. The company recently redesigned the site around its hundreds of millions of channels. Partners from major movie studios, record labels, web original creators, viral stars, and millions more all have channels on YouTube. YouTube is predominantly an ad-supported platform, but also offers rental options for a growing number of movie titles. YouTube was founded in 2005 by Chad Hurley, Steve Chen and Jawed Karim, who...

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Machinima.com is an online entertainment network that features clips and teasers from numerous video games. The site allows users to watch trailers, gameplay, montages, music videos and original machinima series and movies.

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Fullscreen is a next-generation media company building a global network of YouTube channels with content creators and brands. The Fullscreen network generates over 1 billion monthly video views and reaches over 90 million subscribers, making Fullscreen a Top 5 YouTube Partner. Fullscreen was founded on January 2011 by CEO George Strompolos, the co-creator and co-founder of the YouTube Partner Program. Fullscreen is headquartered in Culver City, CA.

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We created Tastemade with one goal in mind: to connect the world through food. A generation ago the cable industry launched category defining brands in food and lifestyle and we believe the same opportunity exists for today’s global, social and mobile digital platforms. Tastemade was founded by Steven Kydd, Larry Fitzgibbon, and Joe Perez and is funded by Redpoint Ventures.

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ZEFR is a premiere network on YouTube and the solution for content owners in movies, television, music and sports. ZEFR’s unique technology identifies and claims licensed content on behalf of the owner so that it can be monetized, allowing advertisers to buy against the most premium content online.

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Big Frame works with the biggest YouTube influencers to create and market video content. Big Frame is a leading media company in the YouTube entertainment space. We’re building sustainable media brands around YouTube’s most influential channels, and connecting advertisers with their highly engaged audiences. YouTube’s best channels partner with Big Frame to build professional careers by growing their audiences and unlocking lucrative partnerships with advertisers. We help the best content find the right audiences. We’re not trying to sign...

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Maker Studios is a next-generation, talent first media company home to many of online video’s top digital stars and content including KassemG, The Game Station, Nice Peter’s “Epic Rap Battles of History,” the Shaytards, Andrea’s Choice, The Yogscast, Snoop Lion, The Gregory Brothers, Mike Tompkins and celebrity actress/comedian LisaNova, among many others. Maker is the only network to offer partners development, production, promotion, distribution, sales, and marketing services. Maker Studios is headquartered in Los Angeles. To learn more, visit...

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Funny Or Die is a comedy video website that combines user generated content with original, exclusive content. Celebrities, up-and-coming comedians and regular users alike can all put up stuff they think is funny. At the same time, the site hopes to eliminate all the junk that people have to pick through to find good videos. Users vote on what videos are funny and what videos deserve to die. The site uses a proprietary player that can be embedded on other...

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What Games Are: Self-Publishing On Console Will Not Create The Next SuperCell. But Microconsoles Might.

Editor’s note: Tadhg Kelly is a veteran game designer, creator of leading game design blog What Games Are and creative director of Jawfish Games. You can follow him on Twitter here.

To the joy of many, Microsoft announced another Xbox One pivot: Rather than try to maintain a fortress of solitude, the console will support indie publishing. You’ll be able to use your console as a dev kit (traditionally dev kit licenses could be very expensive) to make and publish your games. Microsoft even promises to remove some of the category barriers that segregated indie games to a backwater page in the Xbox dashboard.

These moves can be read in two ways. The first is largely as a reaction to Sony. Sony has been flirting with the indie developer community for a while, quietly building up relationships and facilitating the publishing of a number of games such as Journey and Thomas Was Alone. As part of PS4 the company has significant plans to allow small developers to self-publish on the system, although still under a dev kit model. It promises to send free kits to developers that need them.

The second read is to consider these moves in light of wider trends. Outside of giant thousand-man studios and tiny indies, most mid-sized gaming companies are nowhere within 100 kilometers of consoles these days. There’s just no place for them in a sector that values its 20m+ unit hits, and they can’t afford to compete at that level. All of those people have shifted to mobile, tablet or social instead, where they are finding success.

The move to attract indies sits semi-uncomfortably. The console industry is used to acting like a car showroom, developing specific pieces of beautiful game content and then engaging in a large sales push toward success. Fans of consoles (including many developers) are also used to this model, and tend to think of this activity as “real games,” as well as the most economically significant activity in the industry. Much as Hollywood still thinks that box office means something, console game executives tend to be more impressed by stories involving unit sales rather than residuals.

That showroom mentality is what led Microsoft down the path of making Xbox One into a mega-hub, which nobody understood, or Sony make a very similar thrust with PlayStation 3. The pivots away from those big plays may at first glance seem like attempts to atone or to broaden out their relationships with game makers, but I tend to think otherwise. What they’re actually about is developing a few show-bikes to go alongside the show-cars.

Indies vs Independents

There are several meanings of the term “indie.” For some it simply means financially independent, able to make games and revenue and be self-sustaining. For others the term is political, expressive of points of view and meaning. This second version is far more popular in the games press because it has more of an emotional component. Indies stand for something and become heroes fighting an unspecified “man.”

It may surprise you, but in the console-ist view the political kind of indie game is more desirable because it ticks the art-game box. Art games are rarely expected to make their money back, and certainly not to become big franchises. Yet there’s a lot of value in having them. If you can have a few notables like Jonathan Blow talking up your platform, a few Phil Fishes and a few “thatgamecompanys” making signature games, then this is a great story. It aligns you with the kind of story seen in Indie Game: The Movie and at GDC. Most important is that it gets the press on side, which is hugely important in the mutually assured destruction of console platforms.  Appearing to be indie is worth acres of PR.

At the same time, supporting a few such indies allows platforms to retain their essential power. While PC gaming has always reserved much more power to the developer and treated hardware makers as little more than component makers, console gaming has always worked the other way. The console is the main brand and the platform story. The games all appear on the console with the holder’s say-so. The publishing model places the console brand front and center, and the games are in support, and the market tribally responds along those lines.

Taken in that vein, the modern console industry’s understanding of allowing indies to enter into its playpen is pointed but they are not embracing an ecosystem any time soon. From the standpoint of where they’ve been, modest steps to change their model may seem like great leaps for Sony, Microsoft and Nintendo. Like TV executives who are still tentative about streaming, there’s a sense of not going too fast for fear of losing everything.

This is why Microsoft’s newfound message of developer liberation is still pretty garbled. The exact plans for how Xbox One will go indie-friendly come across as a bit hazy. They smack of a recent decision at the executive level which will need some thoughtful re-engineering time to figure out on the practical level, so don’t expect it for launch. Also how it reconciles with some other showroom features (like the heavy push on mainstream TV) is anyone’s guess.

Not to let Sony off the hook, its plans for indie liberation are similarly convoluted. Sony still wants some forms of concept approval, which â€" even though the company promises a speedy turnaround â€" still sounds every bit as ludicrous as Roku wanting concept approval for movies it streams. It should make any developer pause and think seriously about what it implies.

Yet the bigger issue is that both plans are not enough. They do not represent change real enough that indies in the first sense of the word (financially viable) would find attractive. It’s also woefully out of step with just how far games have come. Developers are far more empowered today than they have been since the days of microcomputers in the 80s and are not keen to sacrifice that freedom.

You Are Free To Do What We Tell You

It used to be imperative to placate Sony, Nintendo or Microsoft for any game to have a chance of being published. This was expensive between  concept approvals, extensive technical requirements and laborious quality assurance and certification processes. But what could you do? They were the gatekeepers, it was largely a relationships business, and that was that.

Even when they moved into digital markets they were choosy, taking an active role in content selection and publishing. Games were released on schedules to give a window for sales to build and platforms were managed like topiary. Not too many games of one genre or another, just a few key ones and a heavy sense of curation. All very bonsai.

Then Apple and Facebook upended that model with something more organic and irrevocably changed how developers thought of success. Success was no longer to be like Jonathan Blow or Ubisoft. It became being like SuperCell. The console industry has never been able to fully understand the depth of that shift.

The way that developers approach making games on Facebook, iOS and Android is radically different to how things used to be when console platforms (and PCs) was all there was. They just do it, no dev kits, relationships, publishing schedules or concept approvals required. They may need to pass some curation (particularly from Apple) but those conditions tend to be far narrower in scope than anything the console industry ever imposed. Essentially don’t crash, no porn, no defamation and you’re good to go.

That new model is the one that breeds true independent game development success. The bonsai  paradigm of consoles prevents developers from expanding too much, meaning that a thatgamecompany gets to make cool games but not really grow (if they want to, of course). Whereas the iOS/Android/Facebook model gives birth to Rovios and Zyngas (in happier times perhaps). When platforms get out of the way and let software be software, software becomes wildly successful and the platform itself grows.

Obviously Rovio is an extreme case, but many other smaller studios have managed to forge their own destinies in a similar fashion. Studios like Spry Fox and NimbleBit make the games they want to make, how they want to make them, with whatever business model they desire, and it’s no big deal. So they are free to innovate and they do. Same for us at Jawfish.

Enter the Micros

Console makers do realize that they’ve painted themselves into a corner, want to change and get some press goodwill. Yet not to the extent that they detonate their existing business. Especially not when many of their fans prefer to cheer for stasis and buy into predictable franchises over innovation.

I don’t envy them, but that gap is why microconsoles are a real threat. OUYA, GamePop, GameStick, Mad Catz and whatever Google might be cooking up are relatively unencumbered by old constraints, and therefore able to empower indies in the first sense. The fact that they’re mostly using a common operating system helps, but their main advantage is the potential flexibility and the focus that being simple provides.

The first generation of microconsole hardware is less than stellar. Of course it is. The idea is brand new and still finding its way. The OUYA’s joypad, for example, isn’t good. The processors for most microconsoles are probably underpowered, and there are lots of early firmware and operating system issues. Look past these early-phase issues, however, and take in the longer view.

Microconsoles can iterate on hardware quickly, like phone makers, where Sony is stuck with a fixed spec for the next seven years with PS4. Big consoles have to be static because big publishers (like Activision) need the spec to be stable enough to master in order to make the next Call of Duty. A SuperCell, on the other hand, doesn’t. An iPad doesn’t. Indeed most every other form of electronics has figured out how to move to an annualized cycle except console makers.

Beyond hardware issues the next issue is the customer. Who are microconsoles for? Everyone. Everyone who likes to play games cheaply, for fun, with simple controllers and low (or free) prices. As we’ve seen on phone, tablet and Facebook, that translates to a hell of a lot of people. And before we get too worried about TV being somehow special in this regard, consider that that is a self-cyclical piece of thinking born of consoles being pretty bad as devices. They are only now getting into the idea that maybe they should have power/resume states like every other device you’ve owned since the turn of the millennium. Part of the reason why they have that special gamer aura is because they are a hassle. There’s no reason for micros to follow the same path.

Power Shifts

The future that I see for console gaming is one where hardware incrementally cedes power to software. Pushed by microconsoles offering a vastly cheaper option on the one hand, and developers of incredible games with the right business models on the other, the prospect of all three current console platform holders being reduced to only vertically satisfying their core fans is very real. The prospect of big publishers taking a bath is also very real.

It will take a couple of iterations to get their hardware and business models right. It may take the entrance of a big player like Google or Samsung to validate it (much as Amazon did for ebooks). There will also be that initial flurry of press coverage that will swamp all channels with talk of PS4 vs X1 (and ill-advisedly lamenting Nintendo) for the next 18 months. That will cover over the real story to an extent, allowing OUYA et al room to breathe and pivot.

But in the medium term? The new SuperCells will not be coming from these revamped “indie” console offerings. They’ll come from a very different kind of device entirely.

(If you’d like to hear more, come see me talk about microconsoles some more at Casual Connect this week in San Francisco.)

Angels Get Carry For Helping A Startup Raise Money With AngelList Syndicates

AngelList is testing out a new service that lets angel investors syndicate deals with each other, a feature that could allow startups to raise venture-sized rounds of money with relative ease. Called Syndicates, the private-beta product lets any accredited investor on the AngelList fundraising platform essentially create, lead and collect carry for a fund of angel money for a specific startup.

The carry part could help motivate an angel who truly believes in the startup to put in the hard work of helping it raise all the money it thinks it needs. In a world where more startups than ever are trying to raise money, and more investors are competing to find the best ones, this model may quickly become popular.

Here’s a bit more about how it works, as gleaned from the newly-public FAQ from AngelList, the resulting conversation around the news on Twitter, and a conversation with AngelList cofounder Naval Ravikant. The news, we’ll note, was broken by anonymous startup personality Startup L. Jackson… who presumably has investor-level access to AngelList, whoever he or she is.

VCs and their limited partners (the entities who put money into VC funds) already use carry to align their interests. In addition to the VC partners collecting a set management fee for each fund, the carry provides them with a percentage of the profit for the fund.

In the AngelList implementation of the concept, the lead angel picks the percentage carry that they’ll get from a positive return in the company if it has a liquidity event. They can set this to zero, which would make the most sense if they’re relatively unknown and most concerned with building a reputation. Or they can set any amount above that â€" 40% could make sense, for example, if you’re a top angel and looking to monetize your reputation and deal flow.

The FAQ provides the following example of how a lead angel would use Syndicates:

Sara decides to invest in a startup and asks for a $250k allocation in the company. She personally takes $50K of the allocation and decides to syndicate the rest. She shares the deal with investors and specifies that she is charging a 20% carry on the remaining $200k of her allocation. Sara’s capital and her co-investor’s capital is pooled into a $250K fund which invests in the startup.

Sara’s co-investors pay carry for her access, governance and value-add. She sourced the deal and used her judgment to select the investment. She manages the fund and provides oversight for her co-investors’ capital. And she provides ongoing value-add to the startup.

AngelList takes 5% regardless, which makes Syndicates a potentially big revenue stream for the funding platform. It also sets each Syndicate up as an LLC specifically for the startup in question, with the lead angel signing off as an investment advisor. This legally obligates the angel to disclose any conflicts, such as other strategic or financial relationships with the startup.

As part of the service, AngelList also requires the lead to put up at least 10% of their own money into this vehicle, in contrast with the much lower percentages that LPs typically require of VC funds. In my discussion with Ravikant, he adds a few other points on how he sees Syndicates working.

“The backers are likely to be LPs, family offices [of the very wealthy], passive angels, and angels out of market who can’t get into a deal or don’t want to spend the time,” he explains. Meanwhile, the lead angel is expected to take this more seriously than some angels might be used to, in that they are expected to “provide access, oversight, and help the company.”

At the same time, he disputes the notion that Syndicates is competing against VCs here â€" an assumption one might make given that Syndicates could help a company raise a lot of money quickly. “This isn’t about ‘without VCs’ â€" in our test, anyone investing less than $100K per deal goes via Syndicates. Over that and you get a direct intro. If you’re putting in serious money, the company wants to meet you. The two will coexist.”

“In fact,” he adds, “some well known VCs have already approached us about syndicating deals â€" they wouldn’t take a carry, but would get advisory shares for being on the board and / or get to control syndicate allocations and voting. We are also talking to seed funds who want extra leverage.”

A less obvious benefit of the setup is that angels now have a new way to take advantage of pro rata terms. Typical deal terms already allow investors to continue putting money into a company in order to maintain their existing percentage, even as the company raises new funding at higher valuations. But, many angels do not want to raise or borrow the money to do this, so they forego the option. With Syndicates, the investor can fundraise to buy stock made available via pro rata terms, and collect carry on any resulting profit.

What about the murky world of finance law? Where does the Securities and Exchange Commission stand on this new method of raising money? AngelList has obtained a no-action letter from the federal agency, which means that it can launch the service without fear of its legal reprisal. You can view the PDF here.

But wait, how new is this concept? Finance writer Dan Primack notes that “fundless sponsors” already exist, and indeed they’ve become an increasingly common method for private equity investors to pool money in recent years.

There are very few instances of a carry-based LLC being used for angel investment, though. Founders Club, a relatively new investment-vehicle startup focused on raising funds around startups and startup categories, has also been pursuing it. Sequoia’s long-running “Scout” program is another, albeit at an intentionally smaller scale. To Ravikant, “[t]his is closer to Sequoia scouts than anything else. It allows anyone to be a scout, not just Sequoia’s CEOs, and anyone to be a backer, not just Sequoia. And it’s all carry-based (no fees).”

He adds that this is just a test for the next couple months. It may not work, or the implementation may change.

But any startup that needs funding and has an angel lined up is going to be looking at Syndicates hard as a new option. And the early-stage investment community is already busy trying to figure out the threats and opportunities.

Finally, the SEC, Congress and other government entities are currently changing the rules for private fundraising, which could make Syndicates explode in popularity. Private companies could soon be able to publicly advertise that they’re looking for money, which might help them benefit from the Syndicates concept immediately. And if non-accredited investors are allowed in, lots more money could start to flow through, too (and Startup L. Jackson will have a tougher time beating the tech press on AngelList scoops).

[Disclosure: AngelList has a partnership with our CrunchBase startup database product, a non-exclusive deal that is unrelated to this news as far as I know. I also have no financial relationship with AngelList, except through my nearly worthless employee stock option plan with Aol, the owner of TechCrunch and CrunchBase.] 

Zenefits Lands $2.1M From Venrock, Maverick, Aaron Levie, Charlie Cheever And More To Automate Startup HR

For small businesses, managing health insurance and payroll services can be a huge pain and time-sink. They probably don’t have someone on staff dedicated to these issues, and they themselves would rather be dedicating that energy to building a company. Zenefits launched out of Y Combinator this winter to remove the friction of setting up and managing group health coverage and payroll by automating the process and bringing it online â€" for free.

As a testament to how much demand there is among startups and small businesses, since expanding its service at TechCrunch Disrupt NYC in April, Zenefits co-founder Parker Conrad tells us that the company has signed on over 110 clients (ranging from 2 employees to over 100) and is now bringing on an average of 10 customers each week. Today, as it looks to continue expanding operations beyond California, Zenefits is announcing that it has raised $2.1 million in seed capital from an impressive roster of venture firms and angel investors.

The new round, which includes the initial $372K chunk of capital the startup raised out of Y Combinator from Andreessen Horowitz, Yuri Milner, General Catalyst, Garry Tan, Justin Kan and Alexis Ohanian, was led by Venrock and Maverick Capital. A big reason why Zenefits was keen to bring these two investors on board in particular, Conrad tells us, was that Bob Kocher, who led Venrock’s investment, was a key player in helping to write the Affordable Care Act (a.k.a. Obamacare) when he worked at the White House.

As Greg explained in April, at its core, Zenefits is essentially a digital insurance broker, meaning that they help startups automate insurance, benefits and payroll but they also get paid a commission by insurance companies each time a company opens a new plan through its system. Over the next two years, as Obamacare goes into effect, the new regulations and provisions mean big changes for health insurance companies and brokers.

These health players are not only being forced to move operations online but will also see the amount of commissions they can take drop â€" among other things. Many health insurance brokers are going to drop their small-group clients to focus on bigger-ticket customers as a result â€" and, as premiums could go up for businesses â€" Zenefits could stand to benefit big-time by offering their services for free. Plus, having someone who’s intimately familiar with the complex and nuanced provisions and regulations in Obamacare (because he helped write them) is huge.

Maverick Capital is also familiar with the healthcare and health insurance industries itself, having backed some of the bigger startups and players in the market, like OneMedical, Castlight Health and SeaChange Health, for example. On top of its lead investors and the Y Combinator partners (like Sam Altman, Garry Tan, Harj Taggar, Alexis Ohanian, Paul Bucheit and Justin Tan â€" who all invested personally), Zenefits also saw a number of recognizable names contribute as angels, including Box co-founder and CEO, Aaron Levie, Quora co-founder Charlie Cheever, Elad Gil, Ben Ling, Matt Cutts and Inkling co-founder and CEO, Matt MacInnis.

With the new capital under its belt, Zenefits has expanded its team to 12 and will look to add more in the coming year. Because the company is considered a broker, it is paid a commission from insurance companies for each new employee and employee added (every month), which is great for its bottom line. But this also requires that it be approved by the government on a state-to-state basis. Currently, regulations limit it (and others like it) to a few states.

But with the changes Obamacare will bring, Conrad expects that digital insurance brokers of its ilk will be allowed to expand to more states beginning in January, at which point, Zenefits will look to move quickly beyond California and New York.

In the meantime, Conrad tells us that, according to BenefitMail, the company has already vaulted into the top 5 percent of insurance brokers (in terms of number of clients) in California, primarily as a result of new company submissions to Blue Cross â€" not bad for a startup five months from launch.

For those unfamiliar, Zenefits has been growing fast in California by turning a paper-heavy process into a digital one, allowing users to create new plans, while serving up quotes for group coverage across health, dental and vision insurance. The company’s system makes it easier for companies hiring new employees to add coverage for each employee, or, if a company fires someone (or they leave), they can click a button to remove their coverage and take them off the payroll, while starting them on COBRA coverage.

It works for companies regardless of whether they don’t have existing coverage or already are set up, syncing employee coverage data and taking over as your insurance broker for those in the latter camp. The company also recently added payroll services, so that startups and small businesses can just tell Zenefits about a new hire and give them the employee’s information, at which point Zenefits will take care of generating offer letters, IP agreements, onboarding details and then add them to its payroll system. They can also do the same for that employee’s benefits.

As part of its payroll services, Zenefits also sets up deductions employees pay for health insurance and other benefits, which employers would usually have to set up themselves. This is a pain, because salary and pricing can be different for each employee and whenever deductions change (which happens a lot when employees move, get married and so on), the price changes. Traditionally, the price of deductions change every 10 years, but with Obamacare, this will happen every year. This could be a huge boon for Zenefits, as it takes care of this stuff for startups and small businesses, who would be seeing a lot more paperwork as a result.

Furthermore, while services like Zenefits may seem familiar or not particularly disruptive to some, it’s hard to over-state just how old-school (and offline) most of the big, old school health insurance brokers are in the U.S. Some of them are multi-billion-dollar market cap companies, but may have little or no software or online-based solutions for their customers. So many startups and founder say “we’re disrupting and old offline industry” to get you excited about your company, and in a lot of cases that’s only half-true.

Health insurance brokerage is definitely one of those industries that qualifies as ripe for disruption thanks to its archaic procedures, practices and infrastructure. Many are aware of the changes that are coming, but they’re limited in how quickly they can react by responsibilities to shareholders, quarterly earnings and so on. Easier to preserve and protect the current state of things than re-build from the ground up. Zenefits won’t be the only one to benefit â€" many new companies are going to spring up in this space â€" but it’s definitely off to a good start.

As Inkling CEO Matt MacInniss (who personally invested in this round) told us:

Zenefits has identified a huge opportunity in the shifting landscape of benefits and healthcare among growing companies. Incumbents aren’t going to move as quickly as smaller, nimble companies â€" and they’re not technologists â€" so I think there’s a huge opportunity for new digital health insurance brokers to quickly move out front to take the pole position in what’s essentially a new category

We manage your benefits, payroll, and HR â€" so you don’t have to. No more paperwork. No more headaches. Zenefits is 100% no-fingers-crossed-behind-our-back free, all online, and completely paperless. So go ahead and focus on your product. We’ll focus on the rest.

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A Week With The Shine, A Beautifully Designed Smart Activity Tracker Made From Japanese Metal

Fitbits. FuelBands. UPs. The market for smart, connected activity trackers continues to get ever-more crowded. And yet, there’s not an obvious winner yet.

Misfit Wearables’ Shine is a new entrant in the space and they may have the most beautifully-designed piece of hardware yet. The company behind the Shine is itself a homage to Apple founder Steve Jobs’ famous “Think Different” campaign and the famous 1997 commercial that began with the line, “Here’s to the crazy ones. The misfits.“

Backed by Founders Fund and Khosla Ventures, the company was co-founded by Sonny Vu, who built up a glucose-monitoring business called Agamatrix that had the first official medical device add-on to the iPhone, and former Apple CEO John Sculley. For a small startup, they have an impressively multi-national team with industrial designers in San Francisco, data scientists in Vietnam and manufacturing in South Korea and Japan.

The Shine is a tiny circle not much larger than a quarter that’s made from Japanese metal or aircraft-grade aluminum. It has LED lights beneath the surface that glow through minuscule holes on the metal itself. Those lights form a ring, indicating how far a person is toward completing their activity goals for the day. You tap the Shine twice to see how much progress you’ve made. If half the lights shine, you’re halfway done. If they complete a circle, then you’ve hit your goal.

I had a chance to test it out for a week or so, tracking everything from regular walks to dancing and downhill mountain biking.

Overall, I love the product. It looks like a piece of jewelry in many ways, and while I’m not an industrial designer myself, several other friends who work in hardware were impressed by the make and form of the Shine.

It is not plastic like a Fitbit. Then because it doesn’t have to be worn as a bracelet like the FuelBand or Jawbone UP, it looks a lot more elegant, especially if you’re a woman and want something more discreet. The Shine is comparable in price to its competitors at $99.95. The Fitbit is about $99.95, the Jawbone UP is $129.99 and the Nike FuelBand is about $150.

The Shine has four different accessories: a wristband, a necklace, a watch and a magnetic clip that makes it easy to attach anywhere, from your shoe to your sleeve to your shirt. My preferred accessory was the magnetic clip, but I didn’t have a chance to try out the necklace or watch.

Throughout the day, the Shine tracks how much you walk or run. It also handles sleep, swimming and cycling, but you have to program it. To do that, you tap the Shine three times, and it will recognize whichever activity you set up in the paired app. Unfortunately, like the other activity trackers, it doesn’t handle yoga (and as someone who practices pretty much every day, the Shine and other competing products are missing out on an hour of physical activity).

The tapping is a bit hard to learn. Sometimes I would tap with two fingers and sometimes with three. Sometimes the Shine would misinterpret a few taps as a signal to record a different type of activity instead of showing me my results so far. You can also use it to tell time with different lights glowing to represent the hour and minute hands of a watch.

“The data science to get the double tap is hard,” Vu told me. “There is no on and off button for the Shine and everything is powered by sensors.”

Indeed, the only way to turn the Shine off is for the battery to run out or for you to remove it.

That underscores the huge benefit of the Shine, which is that it doesn’t need to be charged every few days or weeks. It has a simple coin cell battery that needs to be replaced once every four to six months. It’s also waterproof to a depth of 50 meters. I dunked it in a river in the Sierra Nevadas this weekend and it came out fine, but you could theoretically scuba dive with it, too.

The data transfer to the iPhone is also beautiful. You can see how it works below. The Shine uses a simple Bluetooth connection, and the app directs you to place the Shine on a circle on the iPhone app’s screen. Circles radiate outward before the iPhone picks up the activity data in the Shine.

The paired app tells you how many points you’ve achieved in a day. The Shine doesn’t do “steps” because it would be hard to swim in steps. The middle-range goal of 1,000 points per day requires walking for 1.5 hours, running for 35 minutes or swimming for 25. You can move points higher as you please.

Overall, I was really happy with the product. It is just that much more beautiful looking than the standard Fitbit or FuelBand. For women who are turned off by the look of the bracelet trackers, it’s probably the ideal choice.

The Misfit Shine is only compatible with the iPhone for now, which was surely disappointing for Android-using supporters of the Shine who backed it on Indiegogo.

The company had a successful campaign on the crowdfunding site late last fall where they racked up 8,000 supporters in 64 countries, hit their goal in nine hours and went on to raise $850,000. That was nearly nine times as much as they targeted. Like many other hardware startups, Misfit Wearables used crowdfunding more as a marketing strategy than as a capital source. Misfit had no problem raising from some of the Valley’s better-known VC firms, and this product shows why.

Misfit is focused on developing great wearable products: things that people would want to wear all the time for a long time. A pioneer in the emerging world of wearable sensor technology, the company is making products and services in the consumer health and fitness space to inspire people be more active and develop healthy habits. Misfit’s first product is the Shine, an elegant personal activity tracker that you can instantly sync with your smartphone just by placing the...

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Chinese Consumers Scoff At The State-Run Media's Heavy-Handed Swipes Against Apple

Tim Cook has said that China will soon become Apple’s biggest market, but the government is not as besotted as Chinese consumers. China’s state-run media has taken several swipes at Apple this month, moves which may be part of a (heavy-handed) public relations strategy to pave the way for locally grown operating systems as the Chinese government seeks to move its IT industry away from Western software. But if popular response to the anti-Apple articles is anything to go by, Chinese consumers and their iOS devices won’t be so easily parted.

Earlier this week, People’s Daily, the Chinese government’s official newspaper, published articles calling Apple’s customer-service practices arrogant. The People’s Daily article followed a story earlier this month by official government press agency Xinhua, which blamed Apple for an increase in high-interest loans taken out by students to buy “fancy electronic products, most Apple devices.” And just a few days prior to the Xinhua story, China Central Television’s investigative program “3.15″ criticized Apple’s warranty practices, saying that the Cupertino company discriminates against Chinese iPhone owners by offering shorter guarantees than in other countries, using refurbished components, and refusing to honor after-sale obligations.

China observer Gordon G. Chang wrote in a Forbes opinion piece that “executives in Cupertino should get worried that the 3.15 show is not a one-off.” What’s at stake for the Chinese government is its efforts to decrease dependency on foreign software by upping the profile of locally developed operating systems. Apple is just one of several foreign tech companies targeted by the Chinese government. Earlier this month, for example, China’s Ministry of Industry and Information Technology issued a white paper declaring that China is too reliant on the Android smartphone operating system (though it overstated Google’s power in China).

The Chinese government is building its own Ubuntu-based open-source OS in partnership with Canonical and Chinese developers. The Linux-based OS, called “Ubuntu Kylin,” is set for release next month, and a China-specific version of Ubuntu Touch for smartphones and tablets may also be in the works. Most of Huawei and ZTE’s handsets are Android-based, but both Chinese companies are working on their own smartphone operating systems. Huawei Device CEO Wan Biao told Reuters last September that the company is “devoting resources into coming up with a phone operating system based on our current platform in case other companies won’t let us use their system one day.” Though ZTE’s operating system was built with Mozilla, it’s also meant to help the company move away from Android. Other major Chinese tech companies creating their own OSes include Alibaba and Baidu.

The Chinese government’s PR tactics have been too over-the-top, however, for consumers to swallow. After the CCTV program, actor Peter Ho posted to his 5.3 million Weibo followers: “#315isLive# Actually, Apple has so many tricks in its after-sales services.  As an Apple fan, I’m hurt. Have you done right by your founder Jobs? Have you done right by the young people who sold their kidneys?  It’s really true that big stores bully customers. Post around 8:20.”

The strange last sentence of Ho’s post was proof to many observers that he had been instructed to post that message at a specific time. In response, Ho claimed his Weibo account had been hacked. Very few people believed his story and the backlash quickly spread to CCTV.

Furthermore, when independent financial magazine Caijing decided to follow up the People’s Daily story about Apple’s customer service by asking readers on Weibo “which arrogant company or companies do you want to smash?,” the Cupertino-based company didn’t even crack the top of the list. Instead, the top offenders named by respondents were mostly state-owned monopolies, including China’s three major telecom-service providers (China Telecom, China Unicom and China Mobile), three largest oil companies, and its four major banks.

Many of the complaints called out the irony of criticizing Apple’s customer policies when most state-owned companies aren’t exactly known for their friendly service. The Wall Street Journal quoted one user writing under the handle Planet Virus, who said “If we say Apple is arrogant, then most state-owned enterprises are shameless.”

April 1, 1976

NASDAQ:AAPL

Started by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple has expanded from computers to consumer electronics over the last 30 years, officially changing their name from Apple Computer, Inc. to Apple, Inc. in January 2007. Among the key offerings from Apple’s product line are: Pro line laptops (MacBook Pro) and desktops (Mac Pro), consumer line laptops (MacBook Air) and desktops (iMac), servers (Xserve), Apple TV, the Mac OS X and Mac OS X Server operating systems, the iPod, the...

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Live From Google's Mystery Announcement With Android Head Sundar Pichai

We’re live from San Francisco’s Dogpatch neighborhood, where Google has asked a couple dozen of us tech-minded folk to join them for the announcement of… something.

What exactly that something could be is still (kind of) a mystery â€" but we’re here to find out.

Google has kept pretty hush on what to expect, save for one key detail: the event is going to be lead by Sundar Pichai, who you might remember as the guy who took over the Android team after its founder, Andy Rubin, jumped to a new project. With that said, Pichai also leads the Chrome and Google Apps teams…

Will we see the official debut of Android 4.3? The long-rumored new version of the Nexus 7 tablet? Both? Or something else entirely?

The event is scheduled to start at 9 A.M Pacific, but we’ll be bringing you photos and commentary from the scene by way of our liveblog down below, beginning whenever things start to get interesting â€" so tune in early!

Greg Kumparak July 24, 20131:26 am

Will Google still have anything up their sleeve to announce this morning? Tune in to find out.

The event is scheduled to start at 9 A.M Pacific (That’s noon Eastern, 1 A.M. Tokyo, and 5 P.M. London), but tune in early!

Greg Kumparak July 24, 20131:26 am

Back pic, pulled from Best Buy’s leaked pre-order listing:

Greg Kumparak July 24, 20131:25 am

Front pic of the new Nexus 7, pulled from Best Buy’s leaked pre-order listing:

Greg Kumparak July 24, 20131:23 am

Spoiler alert! Wait, can I spoiler alert a liveblog? Anyway, continuing their long established habit of spilling the beans, Best Buy has just put up a pre-order page for the new Nexus 7.

According to the product page, the new Nexus 7 will have:
- A 7 inch IPS display (1920 x 1200)
- 5.0 megapixel rear camera
- 1.2 megapixel front camera
- 2GB internal memory.
- Android 4.3

And will come in 16GB and 32GB varieties for $230 and $270 respectively.

Greg Kumparak July 24, 20131:05 am

The event is scheduled to start at 9 A.M Pacific (That’s noon Eastern, 1 A.M. Tokyo, and 5 P.M. London), but tune in early!

Tools For Treason

Our rights are extended and limited by the tools we use. The Internet has magnified our capability for free speech, but has pared down the reasonable expectation of privacy. And we, of course, have volunteered our data unreservedly at every turn. Even when we got burned, we kept coming back to give more. I suppose we did it because we trusted those to whom we were giving it, though they have almost without exception lost that trust now. And any trust they do regain must always be provisional, apparently, so why bother with it at all?

It seems that if we are to start over again, the founding principle of our tools for communication cannot be the establishment of trust, but the impossibility of trust.

It’s a cynical place to start, but clearly a necessary one. If it is possible at any point for trust to enter the equation, that trust can and likely will be taken advantage of. If there exists, anywhere from your end to the other in the long chain of servers, switches, cables, interpreters, loggers, drivers, protocols, interfaces, and displays, any single place where you are not one hundred percent in control of your data, your data is compromised and the system fails.

The trick is to treat every communication as a potential act of terrorism. After all, isn’t that how the NSA does it? For them, it’s an excuse; For us, it should be a method. Start there, and you can build a system that works. Start there, and you will be told that you are building tools for treason. You are.

Great. If it isn’t illegal, it isn’t strong enough. If the government doesn’t denounce it, it isn’t good enough. Tools for treason are the only tools that will suffice for our protection from now on.

But let’s be clear: They will be used for evil, both petty and monstrous: for trading child pornography, for selling meth, for planning assassinations, for mass murder. You will be told you are arming the enemy. You are. But your tools are neither necessary nor sufficient for such atrocities. Every kitchen knife is sharp enough to cut your fellow man; every hammer is hard enough to split skulls; every car is fast enough to mow down pedestrians. They have to be to fulfill their purposes, and it’s the same here.

And remember, we’re not just talking about Facebook chats and Google searches. What seems like overkill for protecting personal email may be totally insufficient for a guerrilla fighter coordinating across borders. Many people may not care about their privacy when it comes to a spare email address leaked by Facebook or the metadata from their Gmail account. They may come around later or not, but someone’s got to make sure that if they do come around, privacy is even an option.

If your algorithm doesn’t allow a pedophile to irreversibly scramble his drive and avoid prosecution, it can’t be used by freethinkers under ideological oppression to hide state-banned books. If your messaging app won’t let someone safely plan bombing the Super Bowl, it can’t be used by an activist to reveal human rights abuses. If your map doesn’t let poachers stalk rhinos without alerting rangers, it can’t be used by ethnic minorities to escape purges. The strength of the tool enables all of these things, and it is an old, old test we have taken many times before to see which we use it for. The answer, as always, will be “both.”

And how will we make these magical tools? There are really only two major requirements, if we assume (wrongly for the most part, at least at first) that users can operate them properly.

They must completely ignore the law. There is no reason to respect it â€" even the government doesn’t. Police requests for data, subpoenas, and anything else must be completely powerless, at least without the consent of the user. But it is not enough to disdain the law, unless one is immune to it.

Therefore, they must not be centralized. Web platforms as a service are fine, and will remain fine, for editing photos and sharing restaurant recommendations, but not for personal communications or any kind of confidential data. Even a “zero knowledge” service like Spideroak places compliance with the law above the needs of its users, and may decrypt on command if obligated to. Self-hosting, whether on your own or on rented or virtualized hardware, is the only way to be remotely sure that your data is safe.

Put network attached storage and a pop-up web server in every home and watch existing monolithic structures be eroded. With personal gigabit connections, terabytes of our own to serve from, end-to-end encryption, and peer-to-peer implemented at a fundamental level, our communications will cease to be reliant on anything except critical infrastructure â€" and even that, in time, will be obsoleted. It’ll take time to nail down the right protocols, plug gaps, and expand compatibility, but the important thing is to get it out there. Like Bittorrent, the cat won’t be put back in the bag. It’s taken ten years for torrents to become a household word, but at the rate services and agencies are accidental tipping their cards, it may not be as long a road to get people in touch with their inner cryptographer. Make it as easy to install as BonziBuddy and you’ll start something that won’t be easily stopped.

The simple fact is that the government and powers in whom we’ve confided have shown themselves to be unworthy and unreliable (if not totally reprehensible). Respecting their interests should no longer be a matter of course, and furthering the naturally decentralized nature of the Internet is the logical next step. Creating something that serves the interests of the private (or oppressed) individual instead of, ultimately, those who wish to impose on him or her should be a major imperative for the next decade of software and platform development.

They won’t like it, because freedom is the freedom to do wrong as well as right, and they as arbiters are terrified that they will no longer be able to tell which you’re doing. Well, we’re tired of them knowing â€" tired of them trying to find out. We have the technology. We can declare our independence. We’ve done it before.

r Disney Quietly Acquired Owner SpotMixer A Year Ago, Video App Vlix Is Shutting Down

Vlix â€" an app that let users add filters and other features and then share them with others â€" is shutting down in August, about a year after its developer, SpotMixer, was quietly acquired by Disney. The news was delivered to Vlix users in an email last night; a copy of the note is at the bottom of this post. Users will have until August 31 to download videos they have created on the service.

It’s not clear whether One True Media, another SpotMixer subsidiary, or SpotMixer itself, are also being shut down. We have reached out to the companies to ask. We have also contacted John Love, who is now a VP at Disney Interactive but had been the co-founder of the company in 2005.

SpotMixer, One True Media and Vlix were backed by a number of big names, including Kleiner Perkins Caulfield & Byers, DAG Ventures and NTT, to the tune of some $14 million. (We’ve also reached out to Kleiner Perkins for comment; there, it appears that Randy Komisar led on the investment.)

The Disney connection to Vlix, in fact, is only apparent when you look at the bottom of the shut-down notice, or follow through to the app’s terms and conditions. Looking around, one of the only references I was even able to find of the acquisition being made in 2012 was this small note added to One True Media’s CrunchBase profile by one “jlove” that says that “SpotMixer Inc” was sold to the Walt Disney Company. Privco, meanwhile, states that the sale of “One True Media” closed in October 2012.

When Vlix first launched, it was hailed as yet another “Instagram for video” â€" before Instagram itself became the Instagram for video.

It’s not completely clear why Vlix is closing, but there are probably a number of reasons. For starters, it’s a very crowded space, with companies like Twitter, Cinemagram, Lightt and many more also competing for users. It could be Instagram’s eventual move into that area that was the nail in Vlix’s coffin. Or it could be that Disney had always intended to buy SpotMixer for technology that it could use elsewhere. It’s worth pointing out that Love also led on the launch of Story.us, an app released by Disney in May and geared at parents that lets users create stories of patched-together videos and photos.

Vlix doesn’t appear to have any usage figures, but One True Media, a platform that lets users create slideshows (tech that appears to have been used in Story.us), in 2011 said it had 6 million users posting over 10,000 videos a day and over 5,000 videos a day posted to YouTube and Facebook. SpotMixer, geared more at businesses, operates on a paid-model starting at $10/day.

SpotMixer provides web and mobile-based video creation and distribution services for businesses and consumers. It’s video platform enables users to create visually rich videos and distribute them online, on TV or on mobile devices. SpotMixer leverages its platform across three business lines. One True Media is SpotMixer’s consumer service, with over five million users creating over fifteen thousand videos a day and sharing them on the web, on DVD and on TV. SpotMixer is a provider of online...

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Vlix – video effects & sharing mobile app is the fun and easy way to enhance, personalize, and share your video. Apply stunning video effects, personalize with opening and closing text, then share your video exactly how you want – publicly or only to close friends and family. Developed by SpotMixer Inc., the leading provider of web-based video creation and distribution services for businesses and consumers.

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One True Media, a business of SpotMixer, Inc., is an online provider of online editing and sharing tools that allow users to combine photos, video, music and special effects in order to create video montages. One True Media seeks to make video editing a collaborative experience, and provides customizable DVDs, online sharing options and photo book keepsakes so that users can build, tailor or update their video montages with ease. In 2012 SpotMixer Inc., was sold to The...

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The Disney Interactive offers a mix of interactive entertainment and informational content and services for Internet and mobile devices. The organization is both a developer of unique new media experiences specifically designed for Internet and mobile media and a developer of new platforms for distributing content selected from broad, existing entertainment divisions and libraries of The Walt Disney Company or its affiliated companies. Disney Interactive’s suite of properties includes Disney.com, Family.com, Movies.com and mobile entertainment. Disney Interactive is an...

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How To Self-Publish A Bestseller: Publishing 3.0

Editor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. His latest book, “Choose Yourself!” (forward by Dick Costolo, CEO of Twitter) came out on June 3. Follow him on Twitter @jaltucher.

My most recent book, “Choose Yourself!” sold 44,294 copies in its first month out, hit the Wall Street Journal Bestseller list, was No. 1 on Amazon for all non-fiction books for a few days and is still flirting with No. 1 in its various categories. This post is about what I did differently, why I did it differently, and how I think anyone can do this to self-publish a bestseller. I describe all the numbers, who I hired and why, and how I made the various choices I did.

Every entrepreneur should self-publish a book, because self-publishing is the new business card. If you want to stand out in a world of content, you need to underline your expertise. Publishing a book is not just putting your thoughts on a blog post. It’s an event. It shows your best curated thoughts and it shows customers, clients, investors, friends and lovers what the most important things on your mind are right now.

Unfortunately, most people suck at it. I’ve largely sucked at it. I’ve published 11 books â€" five with traditional publishers and six that are self-published.

The distinction now is no longer between “traditional publishing” versus “self-publishing.” The distinction now is between professional versus unprofessional publishing. My first 10 books were done unprofessionally. Even the ones with the big publishing houses. They will probably hate me now. I hope not. I really like the people I worked with at these publishers.

I hope that everyone self-publishes. The benefits are enormous:

More money. Unless you are a John Grisham or E L James you will make much more money by professionally self-publishing. It’s not just money on sales but also foreign rights and special packages that you can offer if you control all the rights to your work. Packages that the traditional publishers almost never go for.

Control over design. Traditional publishers usually keep that control.

Speed. You will probably speed up your publication date by over a year or more if you self-publish.

Content control. My bet is close to 100 percent of the people reading this post have content in them strong enough for a book. But 22-year-old interns at publishing companies won’t recognize that content. Even the editors, the publishers, the marketing guys â€" most of them â€" will not recognize the message you have to offer. Which leads me to…

Avoiding bad things in life. I hate getting that feeling of, “I hope he or she chooses me for X.” Where “X” could be an investment, an acquisition, publishing a book, buying my product, whatever. I try to limit this feeling in my life whenever possible. When you have to deal with more and more layers of people who have to choose you, you don’t get the opportunity to choose yourself (!), which is infinitely more valuable.

Enter Publishing 3.0: How To Professionally Self-Publish Your Next Book

Here’s what I did step-by-step with my latest book for the first month since publication.

1) Build your platform

A traditional publisher is not even going to look at you unless you have your own platform, which means a Twitter following, Facebook following and/or a significant blog following. But if you already can hand-deliver the customers, what do you need the traditional publisher for?

Wasn’t that supposed to be what the publishers would get for you? Don’t they get you in bookstores? The answer is “no.”

Bookstores take very few of the books published by publishers. And whenever you see a book facing forward, or on the front table, or a “staff pick” that means the publisher usually paid to have that special placement. Most books don’t get this. And if you don’t get that, chances are your books won’t sell.

2) How do you build your platform?

Have an honest voice. Don’t be afraid to say things about either yourself or your industry. Provide unique perspective. If it doesn’t bleed it doesn’t lead. Make sure every post or video you do bleeds from the heart, entertains, and educates. In that order.

How do you get traffic? Blog on bigger sites that aggregate bloggers or podcasts or whatever. It takes time to build up. But sincere voices will always rise to the top.

3) Write

This is not a post about writing or how to write a good book. The assumption is that you will write a good book. BUT, two tips: write 500-2000 words every day to keep exercising the writing muscle. And read good writers every day. Then you will write an even better book.

A typical book is anywhere from 40,000-80,000 words. So if you can average 1,000 words a day, seven days a week, you can write four to eight books a year. Or one very very good, edited, revised, professional one. Or 10! Knock yourself out!

I also wanted a high-quality forward for the book. I was really grateful that Dick Costolo, CEO of Twitter, agreed to do mine. I realize why he used to be an improv comedian when I read what he wrote.

4) Know What You Want

If you are self-publishing then you can publish your book right now without any other effort. Go to CreateSpace (owned by Amazon), check the box that you want to be both paperback and Kindle (it costs an extra $69 to be on kindle), pick a cover, upload your manuscript, and in a few days you will be published on Amazon and people can start buying your book.

If your goal is to have a published book and use it to get customers, consulting gigs, speaking gigs, etc., or a beginning set of readers for your next book, then by all means publish this way. It’s the fastest way to do it. I highly recommend it.

But if your goal is to put out the best possible product, maximize the money you make, and get the most readers, then follow the next steps, what I call “Publishing 3.0.”

• 1.0 was publishing with a traditional publisher.
• 2.0 was when the stigma of self-publishing went away and an entire new artistic outlet was open to millions of people (15 million books published last year versus 300,000 10 years ago). It’s cheap, quick, and easy to get your book published.
• 3.0 is starting right now â€" where you can self-publish better, more successfully, better edited, better designed, better marketed, and make more money than if you go any other route. The reason this is possible only now is because for the first time, the best editors, designers, marketers are no longer working at the big publishing houses. Instead, they are striking out on their own and independently charging for their services. The demand is there. This route is more expensive than “publishing 2.0″ but is much more lucrative.

5) Editing

Previously my editing was just a spell check. And that was more than some of my mainstream publishers did. My wife asked me if I was kidding on this. But I told her to read my second book and she stopped questioning it. In other words, it was awful.

With my latest book, I went all out. I hired two copy editors to go through the basics on spelling and grammar. Then I hired Command Z Editing, run by Nils Parker, to help me structurally edit, i.e. do the job that editors used to do (example: Maxwell Perkins in the 1930s) but have been sorely lacking in the past 20 years from traditional publishers. Nils has previously edited bestsellers from Tucker Max, Kamal Ravikant, Ryan Holiday, and a dozen writers, as well as written screenplays, books, etc.

Nils and I went back and forth on more than 15 different rewrites for my book. The difference between the original version and the final version is like the difference between chicken shit and chicken salad.

I am not saying “hire Nils” by the way. I’m just saying this is who I used (and paid). Make sure who you use is among the best in the world, or else you aren’t taking advantage of what the Publishing 3.0 world has to offer. Nils and I went back and forth on more than 15 different rewrites for my book. The difference between the original version and the final version is like the difference between chicken shit and chicken salad.

And yes, publishers have editors. Some very good ones. But I specifically wanted to choose my own editor and use an editor that has worked on books that have sold millions of copies. The entire idea of “Publishing 3.0″ is that I am not limited to who is on the publisher’s staff but I can pick the absolute best people in the industry. With millions of books out there, the competition is incredible.

Hiring the best editor, design firm, marketing firm, and audio firms were all part of that. Not just the best around but who I felt were the best in the world.

6) Design

I never liked any of the designs on my traditionally published books, but I had no control over them. I don’t mean this to sound so anti-publisher. But they were busier with bigger authors, and I don’t think they were always able to devote resources to me.

I made sure I put out a product I could be proud of. I used Erin Tyler Design who helped me find the right cover designer, and she also managed the interior design process, which was a lot trickier than I thought.

She designed the spine, picked the fonts, the inside flaps, the back cover, and all the quirks â€" tables, pictures, asides, etc. â€" inside the book and then helped format for when I uploaded to Kindle Direct on Amazon.

7) Audiobook

I was at a dinner that Amazon had for self-published authors last October.

One guy who was making a solid living self-publishing science fiction novels told me that he always made an audiobook. I thought that was a horrible idea, and told him so.

But two things about audiobooks:

1. He said, “When people see you have an audiobook, they see your book as even more credible. It stands out from the average self-published book when you have an e-book, a print version, and an audiobook. Plus, the audio book is more expensive, so even though there are fewer sales, it’s decent money.” By the way, if you self-publish, always do a print book at the very least. Even if 99 percent of your sales are going to be e-book.
2. I asked the head of an ad agency what marketing tips he had for my upcoming book. He said, first thing, “Make an audiobook. For your kind of book, people will love listening to it while they drive into work.”

So Claudia, my wife who has been supportive of every aspect of this effort, set up her office in our house to be a mini-recording studio. I wrote to Tucker Max that I was going to make an audiobook. He wrote back:

“James, where are you doing the audio, and who’s editing it? Please tell me you aren’t just doing it yourself with your Mac and a mic you bought online.”

We looked at our Mac and a mic that we had just bought online and decided to go to a professional studio. Tucker suggested John Marshall Media. They had done audiobooks ranging from President Clinton’s autobiography to the Harry Potter books to Freakonomics.

It was a thoroughly annoying experience but it was worth it.

I felt uncomfortable just sitting there for eight hours reading words I had written. For one thing, it hurt. Reading for eight straight hours was killing my throat.

Second, I didn’t want to just read stories I had already written. So I did it totally unabridged and improvised quite a bit, making it somewhat original compared to the book.

But the best reason for doing the audiobook is it forces you to really look at your writing and hear what works and what doesn’t. I rewrote about 20 percent of the book after reading things that didn’t quite sound right out loud.

It meant another round of edits (with the help of Nils) to improve the book, a process I never would have gone through if I hadn’t done the audio version.

8) Title

This deserves its own category. I had total control over the title. My first choice for the book was “The Choose Yourself Era.” But whenever anyone asked me to say the title I had trouble saying it. “Era” sounds like “Error.” One person asked me if it was going to a book about archaeology. So somehow it wasn’t working.

So I picked 10 titles that I liked, combined them with the cover and created Facebook ads that I sent out to all my friends and friends of friends in the U.S. Then I sat back and watched the click-throughs. After a few days and thousands of click-throughs I had my title.

“The Choose Yourself Era” came in a distant third place. “Pick Yourself!” was right above it in second place. And “Choose Yourself!” came in first by far.

I then took the same Facebook approach to pick the subtitle and the final version of the cover design.

Results of the Facebook Title test:

 

9) Marketing

I used Ryan Holiday’s company Brasscheck. Ryan is the head of marketing for American Apparel, and has marketed many bestsellers, including books by Tim Ferriss (“The Four Hour Chef”), Robert Greene (“Mastery”), Tucker Max (“I Hope They Serve Beer in Hell”), and others.

I had never before used an outside agency, always trusting either my own basic platform or a publisher. What Ryan provided was unbelievable. Between his Rolodex and mine we scheduled about 60 podcasts, radio interviews, speaking engagements and guest posts on popular blogs and websites.

There were also some other things that I would not have been able to coordinate: A Reddit AMA that got over 3,000 comments and probably close to a million views over the past month. His company created a SlideShare presentation that became the most viewed SlideShare on the site the week of the launch with over 300,000 views. My schedule the month after launch was non-stop marketing. I was burnt out by the end of the month.

I had also become a fan of Bitcoin. So I set up bitcoin.chooseyourself.us a month before I released the book and became the first book ever pre-released solely on bitcoin. Ryan then got several key media sources to cover this.

I offer to pay people back for the book if they could prove to me that they bought it and read it.

I also wanted to market an offer in the beginning of the book. My goal was not to necessarily make the most money but to make sure the message reached as many people as possible. So on the very first page, before the editorial information and dedication, there is “the offer.”

I offer to pay people back for the book if they could prove to me that they bought it and read it. Then I would pay them back completely for the book (losing money on each transaction because of the cut Amazon takes plus shipping). The idea was I would be happy to give the book for free, but I know people don’t value things they get for free. And I also know most people don’t read the books they buy. Hence the offer.

Ryan was successful at making sure that the offer itself was covered in various media outlets.

Brasscheck also scripted the video trailer that was produced and animated by Simplifilm. I describe the results of the marketing below.

10) Foreign Rights

I found with my prior books that the traditional publishers would more or less wait for foreign publishers to call and then they would sell the rights and my split would be minimal. Typically the split was 50-50, but out of my 50 would come my agent’s split. I was competing with too many of the other authors in the publisher’s stable to get any attention from foreign publishers.

Now I own all the rights to my book. Most people who self-publish aren’t thinking foreign rights. You still have to have someone who is going to be your advocate with the foreign publishers. So I got a foreign rights agency, 2 Seas Agency, to handle all of the foreign rights on a commission basis. They go to book conferences all over the world and have connections in each country.

In June, the first month the book was out, Marleen Seegers from 2 Seas sold rights to: Brazil (USD 2500), China (USD 4300), Korea (USD 5000). She is currently in negotiations with publishers from 10 other countries. The three mentioned above are where  the contracts were finished blindingly fast.

11) Other Merchandise

Since I own the rights I can do whatever I want. Below in the “Numbers” section I describe a bundle I put together combining a hardcover version of the book with three earlier books plus some original writing that was sent out by an e-newsletter company that did all of the fulfillment and split the proceeds with me.

With the help of The Social Pages and Litographs I also made a poster that is designed like the cover of the book when you look from afar but when you get close to it you see clearly all 67,000 words of the book.  I’m also making that into a shirt. What will I do with it? I have no idea. But it’s fun and I wanted to do it.

In the below photos you can see the far away version and the words when you are standing about an inch from the poster.

12) The Numbers

First off, what were my prior numbers? Here are my advances on my first mainstream-published, five books in order: $5,000, $7,500, $30,000, $100,000 and $30,000. Advances are coming down quickly!

My first book made back my advance and with about a 10 percent royalty I probably made another few thousand dollars on it. None of my other books came close to making back their advances.

I don’t have all the numbers on my first five self-published books, but I gave an enormous number of books away for free in order to build up my readership. Almost all of those books I produced for free but my revenues were minimal even though I had many readers for them.

In the first week “Choose Yourself!” was out I made the WSJ Bestsellers List with about 10,000 copies sold. To hit the New York Times bestseller list I can tell you anecdotally (and it depends on the week) that you need about 2,500-3,000 copies sold in your first week. I couldn’t get on the NYT Bestsellers List because they do not look at books that do not appear in bookstores. I’m not in any bookstores at the moment, although I’m working on ways that can change. Suffice to say I would have hit that list as well as the WSJ list.

In the first month I sold 44,294 copies between my paperback, audio, e-book, and even hardcover versions.

The hardcover version was sold via an email newsletter, run by Porter Stansberry, that bundled the hardcover with three free versions of my past books plus an original report written by me. He split the proceeds 50-50 with me after the cost of the hardcover was recovered. I sold about 20,000 through this method in the first month. Email marketing is almost never attempted by mainstream publishers.

Of the remaining 24,000, close to 50 percent was Kindle, 45 percent was CreateSpace and 5 percent was Audible. On all the Amazon Kindle sales, the royalty is 70 percent of the $4.99 cost. On the Audible version the royalty is approximately 52 percent, give or take a few percentage points. On CreateSpace the royalty given my pricing was about 26 percent.

The total cost of everything described above was $31,000 (which can be reduced significantly depending on your specific needs. For instance, not every book needs an audio version and a video trailer), not counting traveling I did for the marketing and other marketing costs involved in building my platform.

I am happy to answer questions about the process in the comments below.

[Top image: Shutterstock]