Monday, January 28, 2013

Robocom Systems completes acquisition of Munics Information Systems

Farmingdale, NY, Markham ON, January 28, 2013.
Robocom Systems International announced today the acquisition of Munics Information Systems, based in Cedar Knolls, New Jersey. The successful conclusion of the transaction marks Robocom’s fourth acquisition of supply chain execution software companies in the past two years.
“In this ongoing challenging economic environment it is essential that we continue to expand, extend and enhance the solutions that we deliver to our customers,” said Robocom CEO, Jon Scheumann. “Our ability to deliver solutions that enhance customer service, improve productivity and grow profitability has been greatly expanded by the acquisition of Munics. This acquisition is a reflection of the strength of the Robocom Team and our ability to deliver superior supply chain execution solutions to our customers. We believe that Robocom is well positioned for continued growth,” Scheumann added.
Fred Radcliffe, President of Robocom said “The Munics domain of expertise in the wholesale distribution industry will be a terrific addition to the Robocom Team. We are excited to bring onboard the Next Generation solution and are anxious to expand the product and to integrate it with the Robocom solution set. We believe that the Munics’ products will bring tremendous value to the Robocom customers,” said Radcliffe.
“Robocom is focused on enabling excellence in our customers’ supply chain execution” said Fred Radcliffe. “We clearly understand the challenges facing the leaders responsible for the day-to-day results in warehousing, distribution, transportation and trucking operations. Adding the Munics Team and products to Robocom will result in stronger solutions and deeper expertise for our customers” Radcliffe added.
About Robocom
Robocom Systems International has focused for nearly 30 years on developing and implementing Supply Chain Execution software solutions. Robocom’s solutions include Warehouse Management, Transportation Management, Voice Technology, Order Management and Labor Management. Our investment in research and development is keenly focused on the needs of the business leaders responsible for the day-to-day results in warehousing, distribution, transportation and trucking operations. For more information, visit
About Munics
Munics has been helping wholesale distributors improve profitability and customer service since 1982. Munics’ software solutions allow wholesale distributors to make informed decisions about their businesses resulting in optimal efficiency and performance. Munics’ solutions include web-based order entry, order management, payment processing, purchasing, replenishment, customer relationship management and accounting. When managers have real-time data they are better equipped to perform efficiently and remain flexible. For more information, visit

Sunday, January 6, 2013

Three Examples of New Process Strategy

The world is changing with the internet finally taking hold. Aivars Lode avantce

HBR Blog Network
Three Examples of New Process Strategy
by Brad Power  |   1:00 PM December 6, 2012

There are three fundamental ways that companies can improve their processes in the coming decade: (1) expand the scope of work managed by a company to include customers, suppliers, and partners; (2) target the increasing amount of knowledge work; and (3) reduce cycle times to durations previously considered impossible (as I discussed in my last post).
So how do you do this? As science fiction writer William Gibson said, "The future is already here — it's just not very evenly distributed." This is to say that you don't have to wait until the end of the decade for some breakthrough technology to emerge; it's already here, albeit in bits and pieces.
I'm collectively referring to these process improvement approaches as "Process Strategy 2.0". They stand on the shoulders of the methods of "Process Strategy 1.0": Lean, Six Sigma, and Business Reengineering. Let's explore what Process Strategy 2.0 is all about:
1. To streamline customer experiences in end-to-end processes, Process Strategy 2.0 will require aligned goals and supporting systems to manage work between partners.
The first major trend I see is the shift to global, virtual, cross-organizational teams of specialized entities that are knitted together to serve customers.
In a previous post I described how Forbes changed its article-writing process to include a huge stable of outside authors publishing autonomously and improved the reader experience by allowing them to leave comments.
To keep such a multiparty system from degenerating into chaos, virtual process teams must have aligned goals and support systems. Both Forbes and its external contributors (freelance journalists, authors, academics, and topic experts) want to maximize readership, so Forbes publishes the page view statistics for each piece and created an incentive payment program based on the audience contributors attract. Forbes had to provide tools to enable external contributors to easily publish text, photos, and video — and interact with readers and "call out" comments they want to highlight.
2. To manage the rising tide of knowledge work performed by a younger generation of employees, Process Strategy 2.0 will depend heavily on social collaboration tools.
A second major trend in the world of work is that low-skilled jobs are going away due to automation, while all jobs are becoming more analytical as "big data" provides workers with more information to make decisions.
To help manage the increased complexity of knowledge work, $20 billion financial services provider Nationwide Insurance has been pioneering the use of social collaboration tools. Chris Plescia, Marketing, Collaboration and Corporate Internet Solutions BSA Leader, told me that they are moving from an information "push" environment — sending out lots of messages on things workers need to know — to a "pull" environment, where workers search for information they need, get answers to questions, or access services. One success story occurred when a front-line associate in a call center posted online she didn't like a new process. The senior leader saw the comment on their social platform and asked "why not?" People weighed in, and then they changed the process. Engagement has been very high — over 50% take some kind of action each month.
Getting a new social platform up and running in your organization isn't easy. Participation rates are much lower at most other companies than at Nationwide. Companies who just try to let it evolve, don't go after it with a plan and with dedicated resources, and don't seek to create a culture around collaboration will fail. At Nationwide the key success factors have been (1) having senior leadership lead by example; (2) setting governance and policies to ensure security of sensitive comments; and (3) using tools that make collaboration easy and fun. Their collaborative space is designed to look like an "app store", mimicking the environment that people have come to know on their mobile phones and iPads.
3. To speed operations and improvement, Process Strategy 2.0 will make greater use of quick experiments and more agile management processes.
The third major trend I see is the increasing need for speed in operations and improvement. Accelerating changes in technology, competition, regulation, and globalization demand that decisions get made faster at all levels.
Google's engineering culture is a good example of a management system geared for speed. They like to run lots of experiments with new product or feature ideas and let the market decide which ones deserve further investment. It may look like chaos from the outside, but they aren't afraid to fail fast and learn, or scale up quickly if an idea shows merit. One technique that helps early in new product or process development is to create a quick mock-up of how it would work and show it around. And innovation is built into jobs through "20% time" projects — engineers are expected to spend 20% of their time on projects that are creating and testing new ideas. The effect is powerful — this open technocracy means that workers at every level feel they can have a significant impact.
Many organizations will have trouble adopting Google's fast approaches. They rest on a cultural foundation of openness, analytical rigor, and respect for workers. Workers are expected to not only do their work, but improve their work. And it takes an ability and willingness to invest with a long time horizon.
A revolutionary force over the last 30 years, information technology will change the way organizations operate even more radically over the rest of the decade. Process Strategy 2.0 will help organizations take a fresh look at ways of including customers and suppliers to redesign work, introduce social collaboration tools to support knowledge workers, and reengineer management processes for speed.
Question: Over the rest of this decade, how do you think your organization will change its methods and tools for process improvement?

Find the Next Disruptor Before it Finds You

The head line says it all. Aivars Lode avantce
Find the Next Disruptor Before it Finds You
by HBR IdeaCast  |   5:20 PM December 6, 2012

SARAH GREEN: Welcome to the HBR IdeaCast from Harvard Business Review. I'm Sarah Green. I'm talking today with Max Wessel, a Fellow at the Forum for Growth and Innovation, and a Senior Researcher at Harvard Business School. He is the author, with Clay Christensen, of the HBR article Surviving Disruption. He also blogs regularly for So Max, tell us what the problem you're really trying to solve with this piece is?
MAX WESSEL: Sure. Surviving Disruption actually came from a hypothetical. I was walking down the street talking with a friend-- a colleague at Harvard-- about, in fact, the future of retail. And we're both heavy technologists. And we tend to embrace any new buying format, any mobile purchasing, as soon as anything is available in app form on our phones. We were quick to adopt e-commerce in the era of the web browser.
And we were walking down the street and talking about the significance of disruption, when I kind of posed the question, well, what do you think is going to happen when Amazon puts all of these mom and pop stores, or local chains, out of business? Because I can't imagine looking down the side of the road and seeing no storefronts.
And that was really the first time the two of us had taken the perspective of the incumbent's view. There are things that the incumbent companies in the world-- the Barnes Nobles of the world, the Tower Records-- could do to satisfy jobs in our lives that require physical presence. And as much as I tried to imagine the world without a need for physical presence and physical interaction, I couldn't.
I always picture myself walking into a store, whether it be for an impulse purchase, or just to try one thing out or another. So Clay and I set out thinking on what it is that big companies could do-- these sorts of assets, and these legacy businesses that are incredibly valuable, and in fact generate huge customer value-- what they could do to really preserve as much of their core business as possible in the face of technological destruction.
SARAH GREEN: So it's interesting to think about the difficulty with which you were trying to conjure up that vision of a street with no stores on it. Because it seems like part of the challenge for these legacy businesses is trying to imagine what for them is the unimaginable. It seems like by the time it's obvious what the threat is, and you can imagine it, it may already be too late.
So how do you first start to monitor the companies, or the trends, that might spell big trouble for your business? Because sometimes they're not even coming from your same industry. It could be a trend in a different industry that ends up migrating over to your industry and totally disrupting you.
I'm thinking, for instance, of the example you use in the piece of cellphone cameras. And how that ended up totally disrupting the digital camera market. So how do you be on the hunt, have your finger on the pulse, for those kinds of trends where you couldn't really imagine it?
MAX WESSEL: So let me reposition that. And I'm going to talk a little bit about jobs to be done. As you're familiar with, inside the piece and throughout kind of our lexicon, we talk about jobs to be done and their significance. And really what those are, which is what the fundamental job is that a customer is trying to accomplish in their life every time they purchase a product-- a good or service.
And so for the retailers who can't imagine a world without retail, that is a broad generalization that lacks the focus on exactly what a customer's trying to accomplish. For Kodak and Canon and Nikon, the companies who were producing cameras who couldn't foresee this paradigm shift, really if they had understood that the fundamental job of capturing a moment was one in which they were competing for. And then there was another job to be done that required the big SLR camera, that was really about the artistry of image generation, or some such thing. Because they hadn't bifurcated and understood that granular difference in what they did for their customers, they couldn't see this impending threat of cell phone cameras.
But if you started from this foundation of what is it that I do for customers? Well, for customers I actually just help them capture a moment in an instant. The quicker I can get to that moment, the less friction there is, the better. I mean first of all we started with half a megapixel camera in flip phones, the Motorola Razr, the original Motorola Razr. And it's very, very-- well we'll say it's lacking at best, it's sensor technology in its camera.
But the fact of the matter is that phone was out all the time. People had it, people carried it in their pocket no matter where they went. It was fundamentally different than the use of a big point and shoot camera. And that allowed cellphone cameras to be so pervasive that they could capture any moment. They could complete that job to be done. So if Canon had recognized, from the very beginning, that it wasn't about the quality of their sensor necessarily, and the quality of their colors, but completing that job to be done required this universal pervasiveness, this proliferation of lenses. Then maybe they would have seen the impending threat more quickly.
With that in mind if I were an incumbent, the first thing that I would do, is make sure to engage in kind of these deep jobs-based segmentation studies of my customer population. To really, truly understand what people are trying to accomplish. And then this set of competitors that compete in that space.
SARAH GREEN: OK, so once you actually have done that deep dive and are starting to understand the job that your customers are really hiring you to do, or a segment of them, what do you actually start to do about it? How do you start to turn the Titanic around before it hits that iceberg?
MAX WESSEL: Well, you know, it's very funny. You take turn the Titanic, I consider the recommendation in the prescriptions of Surviving Disruption as business judo. There are certain things in the world for which cellphone cameras are better positioned then point and shoots, and better positioned then SLRs. And there are jobs as you go about and you do your job space segmentation, and you are thoughtful and honest with yourself about the benefits, the core strengths of your disruptor's extendable core, if you're honest about that, then you'll say these jobs I can't compete with. But there will also be a set of jobs for which you are uniquely positioned, because your product has still advantaged.
So this is the creating great art. the SLR, the Nikon's kind of reinvention around very, very, very high quality cameras, and in fact making those cameras even better for a knew population of customers. I don't know if you're familiar but now there's a mirror-less SLR camera. So we have Nikon and Cannon investing in making professional quality cameras, and these very high dollar value systems, less expensive so they can appeal to a broader consumer population. And so that creating great art is something that a cell phone camera just is not positioned to do, because it has to be small. It has to fit in my pocket. It should get thinner, and thinner, and thinner. And because of that, it's never going to have a telescopic zoom. It's not going to be something I take on Safari.
So as Canon and Nikon recognize that, and they recognize their inherent advantages, they can move out of the way of their disruptor, and kind of embrace their strength. And if they embrace their strength, they can get out ahead of the game. They can jump out in front of Olympus. And that's part of it, understanding what you're going to lose and recognizing where you can win.
SARAH GREEN: So you used a phrase there that I'd like to go back to a little bit. The extendable core. To the uninitiated, that could sound like something maybe out of Star Trek, or Harry Potter, or something. The Extendable Core, what is that exactly? What do you mean by that?
MAX WESSEL: Yes, good point. Using business jargon without defining business jargon. The extendable core is a concept that we introduce in Surviving Disruption that a colleague of ours, Michael Raynor, hinted at in his latest book The Innovator's Manifesto. But really what it is, what differentiates disruption from price competition. All disruption is built around either a technology change or business model innovation that provides an advantage as a company scales.
For example, let's take the realm of online retail, where we talk about this loosely in the piece, and there's a lot known about it. So hopefully some listeners can identify with. But an online retailer has in extendable core that's built around the absence of physical space to appeal to an incremental customer, Amazon doesn't need to build a new store. It doesn't need to increase its working capital. It's working capital demands don't increase by adding a new distribution outlet, because everything's warehoused kind of centrally in a metropolitan area. It doesn't have to pay for additional shelf space to put an image of a new book online. It doesn't need to pay for additional fixed cost infrastructure when it dives into home furnishings, for example.
And so that digital storefront provides an extendable core. Where Amazon started in books, it could slowly move up market and get better and better and better, without adopting the same infrastructure costs as it's up market competition. This differs from for instance, a hotel chain. A hotel chains like Best Western competes and has a cost advantage with the hotel chain like Four Seasons. But there's no extendable core there. Best Western still has to pay for physical space. It still leases a building, or buys property, develops its hotel, pays for furnishings, et cetera.
And if it wanted to compete with the Four Seasons, it would have to adopt the same cost structure. It would have to hire a well-trained concierge. It would have to bring in a four star chef to run a restaurant. It would have to invest in major infrastructure-- your costs in terms of getting better beds, and better sheets, and all of the things that the Four Seasons does that allows them to position themselves as a high end hotel.
So without an extendable core, we see price competition not disruption. So the Best Western isn't disrupting the Four Seasons. A company like Airbnb on the other hand is. Where their advantage is in aggregating a lot of independent listers of free space. And so as Airbnb goes around and signs up better bed and breakfast, and people with nicer homes, it can breach ever closer to the Four Seasons in terms of quality, without adopting the same cost structure.
SARAH GREEN: So a question about that. Because that to me seems, in the case of the Airbnb and Best Western, that to me seems like a place where it could just be price competition. Because you're giving up something, namely privacy, in the ability to come and go as you please and not have to be polite to other people, for the convenience. And really the cost of staying some place much cheaper. So if you were in this case Best Western trying to use your article to maintain some advantage, to maintain business, what would you do?
MAX WESSEL: So if I were Best Western watching the disruption of Airbnb, I would recognize that there are certain number of things that Airbnb can't provide its customers. So it can reach ever further up market. But the way it does it is with a nonstandard product. Because it's a platform connecting people renting space with potential renters. You have a huge nonstandard amount of inventory. So there's no guarantee to the business traveler that there will be wi-fi. There's no guarantee that there will be clean sheets, or a clean bed, et cetera. There's no office fax. There's no smart technology integration there. So you don't see people aware that your flight was delayed, and you're getting in late.
So if I were Best Western, I would figure out, of the jobs to be done that I complete for my customers, who amongst those customers need something that's a standard experience. I would figure out how to tack on those little incremental things that appeal for the person who's looking for an office away from home-- a home office away from home. There's something there, there's an opportunity there that would allow Best Western to kind of fortify its position from the oncoming disruption.
SARAH GREEN: So this approach of focusing on the job to be done, and looking for ways you can extend your core to maintain advantage, this all seems to make sense. So why then does so many companies get it wrong? Why do so many companies see the train coming, and can't get out of the way?
MAX WESSEL: Well, it's easier said than done to admit that somebody is positioned better for your customer then you are, for two reasons. One, because I think we all suffer from a bias of perspective. We're ingrained to see the world such that our companies are-- the be all, and end all of customer value creation. And that's true. It's just an inherent bias associated with all the jargon that we eat, we submit ourselves to in advertising, et cetera. So we've refocused-- a lot of us refocus around our company instead of the customer. So that's one flaw.
The other flaw is, frankly, we have real fixed cost infrastructure that needs to be maintained. And the threat of losing 20 to 30% of your customers over the course of 10 years, that's a threat that most of us aren't ready to accept, or a proposition that most of us aren't ready to accept. The problem with not accepting that proposition in the face of disruption, is that it doesn't really matter.
It didn't matter for Borders that they weren't willing to admit Amazon's unique value proposition for their own customers. Because Amazon was going to come in and steal those customers whether or not they were ready to admit it. The faster we can kind of come to that realization, and the faster we can change our core business strategy, the better. And frankly the faster we come to that realization, the faster we begin disrupting ourselves as well, which is still a key part of this entire prescription that we come forward with.
SARAH GREEN: Well Max, thanks so much for chatting with us today.
MAX WESSEL: Absolutely. Thanks for having me.
SARAH GREEN: That was Max Wessel. The article is Surviving Disruption. For more, visit

Westpac claims it’s the No. 2 IT company

Even banks claim they are technology companies because of app adoption. Aivars Lode avantce

Westpac claims it’s the No. 2 IT company

PUBLISHED: 10 DEC 2012 00:05:26 | UPDATED: 10 DEC 2012 08:06:42
Westpac’s John Arthur has made the bold assertion that the bank is the second biggest technology company in Australia claiming to be a market leader in the online space, including its recently launched iPad app, which has recorded 100,000 downloads since July.

Mobile devices bring back that old client-server feeling

Different day, different name, same problems, Mainframe,  Client Server now mobile create challenges for delivery of solutions. Aivars Lode avantce

Mobile devices bring back that old client-server feeling 

It's deja vu all over again
By Dale Vile • Get more from this author
Posted in CIO, 17th December 2012 12:18 GMT
Free whitepaper – The Definitive Guide to Dispersed Storage
If you see the phrase “any time, any place, anywhere” in relation to mobile access, and are tempted to point out the language redundancy (any place, anywhere), then you are probably not old enough to remember the birth of client-server in the late '80s and early '90s.
If, however, cheesy music from a Martini ad is now running through your head, you probably were there and can recall exactly how client-server panned out.
You will remember how liberating it all seemed. Business groups and departments no longer had to wait in line to get their requirements dealt with by the high priests of the mainframe or the custodians of the VAX, the HP3000 or whatever other mini-computer central IT had adopted.
One giant leap
Chuck an Oracle database onto a Unix server, do a bit of that new-fangled 4GL development, fire up a few workstation clients and you were sorted. And that GUI running on your desktop – so much nicer to use than the old green screen terminals – was a massive leap forward in usability.
Over the years, of course, the realisation dawned that client-server brought with it as many problems as it solved. As client machines multiplied, developers ended up having to develop and test for a whole range of workstation specs and environments, and whenever something changed operations staff had to worry about getting new versions of software out to every desktop.
Users discovered they could create their own little offline empire
As support became more complicated and users discovered that an intelligent client with local storage meant they could create their own little offline empire, the overhead, costs and risks began to escalate.
Following a period of re-centralisation using Web-based architectures, it looks as if we are beginning to come full circle. When some of us old-timers see how the next generation is getting all excited about using mobile apps as front-ends for accessing services across the network, we can’t help noticing parallels with the past.
Just as they did two decades ago, people are talking about ease of use, flexibility, and how great it is to be able to store your stuff locally or copy central data from the network so it is available offline when you need it.
With these new intelligent devices (this time lightweight notebooks, tablets and smartphones), so much can be done to liberate users from the clutches of those killjoys in the IT department (sound familiar?)
But things are arguably a bit more challenging this time around, at least from an IT perspective.
Target practice
With regard to endpoint proliferation, it is not just a matter of deciding whether to support the iPad or iPhone, popular Android devices, less popular Android devices, old Windows 7 phones, new Windows 8 phones, Windows 8 RT, BlackBerrys, Symbian phones, and so on (phew).
Driven by consumer-calibrated release cycles, devices are superseded within three to six months, which means each platform is a moving target in its own right.
On top of that, we have Byod (bring your own device) and cloud storage services such as Dropbox to consider. All of this creates a set of challenges that makes client-server look easy-peasy.
But surely we have as our friend that ubiquitous access mechanism known as the browser? With a few tweaks of the server-based application to deal with different screen sizes and browser standards, and knowing that all data stays on the server, can’t we be pretty relaxed about all that client-side diversity?
If only that were the case.
In the real world, the fast and reliable connectivity upon which this model depends just isn’t there in most countries at the moment – hence you quickly get back to local applications and offline data storage, with a heavy reliance on replication and synchronisation for more critical applications.
But at least HTML5 and cross-platform development and execution environments are now with us to save us from all of the historical overhead associated with client-side software. Or are they?
Time for action
The debate continues to rage about whether HTML5 cuts it and whether cross-platform environments pose too much risk of lock-in, not to mention user interface compromises so those native apps keep accumulating.
The emergence of mobile device management and mobile application management solutions that allow us to monitor and control everything out there can help but the truth is that it is all pretty fluid at the moment.
In the meantime, the genie is out of the bottle with regard to user expectations of Martini-style access and Byod. IT departments don’t have too long to figure out how to enable as much user freedom as possible while keeping costs and risks under control.
Arguably the most urgent task is to deal with that most basic of requirements in the mobile context: email. Here, at least, the combination of messaging standards, Webmail interfaces and back-ends that support larger inboxes (to minimise the need for client-side storage) provide an increasing number of workable options.

Startups Adjust to Web's Down Cycle

VC based business find it hard to survive and need be have a modified strategy that is not focused on an exit. Aivars Lode avantce

Startups Adjust to Web's Down Cycle 

Prominent venture capitalist John Doerr coined the phrase "SoLoMo" in 2010 to describe how three technology trends—social, local and mobile—were fueling a new Internet boom.
But now that Facebook Inc., FB +2.55% Zynga Inc. ZNGA 0.00% and Groupon Inc. GRPN -3.94% have fizzled in their first year on the stock market—even though they were considered on the cutting edge of some of those tech trends—the hype over "SoLoMo" has subsided.
For many of the still-private Web startups that rode the wave up, that now means grappling with the downside of the cycle.

Some companies that were preparing for a public offering after Facebook's May IPO have shelved those plans. Others are distancing their businesses from those of Zynga and Groupon, amid concerns their companies will be tarred by the same brush. And some have watched their user growth trail off and are working to recapture the viral magic they once experienced.
Several Web startups have closed shop entirely. Color Labs Inc. raised $41 million in venture capital last year before even launching its social photo app for mobile devices, but it has since imploded and the app won't be available after Dec. 31.
"There's less heat in and around the SoLoMo market," said Brian O'Malley, a venture capitalist at Battery Ventures in Menlo Park, Calif. "For a while, there was a suspended disbelief about how hard it is to build a company. Now that's coming back to bite people."
Here is how three closely held SoLoMo sector startups all raised hefty financing at sizable valuations during the froth and how they are dealing now with the other side of the hype cycle.
The roller coaster for Viddy Inc. Chief Executive Brett O'Brien began in March. His Venice, Calif., startup, which launched last year, was steadily growing its user base for a free app that lets people enhance, edit and share videos on their iPhones. Viddy, with about 10 employees at the time, was "pretty much heads down," Mr. O'Brien said.
Then Viddy connected its app to Facebook's Open Graph platform in March, enabling people to automatically share their Viddy activity in their friends' Facebook news feeds. That raised Viddy's profile.
The number of monthly active users connecting to the app through Facebook quickly soared—to 890,000 by late March, up from 60,000 in January, according to AppData. By late May, the number skyrocketed to 31.1 million.
At the same time, Facebook in April said it was acquiring mobile photo-sharing app Instagram for $1 billion, spurring investors to hunt for the next mobile hit. Though it was producing no revenue, Viddy was inundated with investment offers. In May, Viddy announced it had raised $30 million. The company's valuation was pegged at $370 million, said people familiar with the matter.
All of that "brought a spotlight to this category that I don't think anyone expected," said Mr. O'Brien, 46 years old. "That brought issues and challenges, as well as opportunities."
Among the problems: The user influx strained Viddy's technology so some people were unable to get onto the app on their first try, or they found the app operated slowly. Some consumers vented their frustrations about the app in emails and online posts.
"We were getting distracted just trying to deal with all that," said Mr. O'Brien.
Viddy's user growth through Facebook started cooling off. By July, the number of active monthly users connecting to Viddy through Facebook had fallen to 10.9 million; by November, that amount was down to 650,000, said AppData.
"The hype helped Viddy, and it hurt them," said Battery Ventures' Mr. O'Malley, who is a Viddy board member. The startup now has enough capital for several years, has built out its back-end technology, and today counts 40 million registered users, up 10 times from the start of the year. But "the hype also changed the bar and [Viddy] lost focus on some things," he said.
For Mr. O'Brien, it's now back to the basics of improving the app. Viddy is hiring and currently has about 30 employees. This month, it released an app for devices powered by Google Inc.'s GOOG -0.86% Android. The company also plans to launch a new version of its app early next year.
Mr. O'Brien said he isn't "hung up" on all the ups and downs, and Viddy has "learned a lot."
The hype "was a moment in time," he added. "We're fortunate we got to spend the last six months without the noise."
For LivingSocial Inc., 2012 has been a year of contraction.
Enlarge Image

Agence France-Presse/Getty Images
LivingSocial has now tabled an IPO, and its valuation is declining. Here, a view of the reception desk in Washington earlier this year.
The Washington, D.C., daily-deals firm rode the boom last year along with rival Groupon as consumers paid up for the online discount coupons the sites offered from local merchants.
LivingSocial raised about $580 million in funding last year; its latest $176 million round in December 2011 valued the company at $5 billion to $6 billion. LivingSocial used the money to expand and build its brand, including blanketing TV channels with ads.
LivingSocial also began talking to bankers in the summer of 2011 for an IPO that would raise about $1 billion, people familiar with the matter said at the time. One person said the company, which was founded in 2007 and is led by CEO Tim O'Shaughnessy, said LivingSocial was "all teed up" to go public. That position changed soon after Groupon's November 2011 IPO, when its stock began to drop partly amid questions over the sustainability of the daily-deals business.
LivingSocial has now tabled an IPO, and its valuation is declining. Inc., AMZN +0.66% a 29% stakeholder in LivingSocial, said in filings that LivingSocial's book value plunged to $324 million in September from nearly $1 billion in June. Groupon's stock, meanwhile, has fallen nearly 80% since its IPO.
"When the only comp for us is Groupon, and Groupon's value has come down a long way, that has a bearing on LivingSocial," said Jeremy Liew, a venture capitalist with Lightspeed Venture Partners, a LivingSocial investor.
LivingSocial is no longer airing any TV ads. In October, the company reported a $565 million third-quarter operating loss, compared with a roughly $400 million operating loss in all of 2011. Recent losses were mostly due to write-downs from the declining value of some acquisitions, the company has said.
Last month, LivingSocial said it was cutting 400 jobs, or about 9% of its 4,500-person workforce. It added it was moving the bulk of its customer-service operations to Tucson, Ariz., from its headquarters and is scaling back some office space.
The recent changes "put us in control of our own financial destiny as we move into 2013," said LivingSocial spokesman Andrew Weinstein. He said Mr. O'Shaughnessy wasn't available to comment. An Amazon spokesman declined to comment.
LivingSocial is now trying to separate itself from Groupon with offbeat offerings such as food-ordering services and cooking courses with rapper Biz Markie. The company has said it favors such special events because they can be priced as it sees fit and aren't dependent on discounts off of menus.
LivingSocial investors said they remain pleased with the company's trajectory. In an October note to employees, Mr. O'Shaughnessy said September was the company's first cash-flow positive month.
"One of two things will happen: Either the public markets will recognize more value in Groupon, or we'll continue to take share away from Groupon," said Mr. Liew. "Both of those will take a couple of years. But that's OK."
Kevin Chou wants the world to know his social-gaming startup Kabam Inc. isn't like Zynga.
"We can show the market we're an incredibly different company than Zynga," said the 32-year-old CEO.
Mr. Chou's San Francisco company, founded in 2006, benefited when Zynga's rise helped spur investor interest in the social-games category. Amid that buoyant climate, Kabam raised $125 million and was valued at $525 million as of its last financing in May 2011.
Now Zynga is wrestling with losses, and investors are shying from social-games companies. Tim Chang, a venture capitalist at Mayfield Fund, said he has pretty much stopped investing in game developers because the growth waves from new platforms such as Facebook and the iPhone have passed, among other factors.
"Investors are skeptical now," Mr. Chang said. "It creates extra friction to explain on your IPO roadshow how you're different from Zynga."
Mr. Chou, who is eyeing an IPO in the next two years, said his 580-person company is distinct from Zynga because Kabam makes more intricate titles such as the strategy and empire-building game "Kingdoms of Camelot," compared with more casual games like Zynga's "CityVille."
And unlike Zynga, which has been weaker in mobile games and remains best known for its games on Facebook, Kabam now makes only 30% of its revenue from Facebook's website, with the rest split between partner websites and mobile devices like the iPhone, said Mr. Chou. Kabam's revenue comes from sales of in-game virtual goods like digital weaponry and other game enhancements.
Kabam is also still growing fast, he adds, with projected revenue of more than $160 million this year, up more than 60% from 2011. Zynga posted an 11% decline in revenue bookings, or the actual value of virtual goods sold, for its most recently reported quarter.
Still, Kabam's coffers aren't rising as the company spends to buy other gaming studios. Of the $125 million that Kabam has raised, the company has about $45 million left.
Mr. Chou said that's all part of Kabam's growth plans. "We've had a lot more interest among bankers in the last six months," he said. He adds that the startup is developing 15 new games for 2013, as well as a new line of business that he declined to disclose.