Back in August, Y Combinator held its summer session demo day, introducing the world to 60 new companies in one of its strongest batches to date. One of these companies, DoubleRecall launched as a platform that enables companies to roll out digital campaigns that actually succeed in prompting users “to read an ad,” rather than scoff and click elsewhere.

In that sense, the Y Combinator alum is looking to replace — or at least become a complement to — paywalls with simple, CAPTCHA-like messages that have the potential to be less annoying revenue generators. For example, DoubleRecall might offer its service on a news article, which would contain a CAPTCHA-like recall mechanism that would prompt readers to pick out a couple of words from the text and enter them into a textbox.

The idea is to create experiences that are quick enough for users to navigate that they lower the barrier and obnoxiousness level and are targeted and clickable enough for brands to actually make money and potentially avoid using a paywall altogether.

As to the effectiveness of this model, DoubleRecall says that the campaigns it ran over the course of Q4 2011 showed an 82 percent engagement rate, versus one to three percent for paywalls, an average CTR of 3.6 percent, and an elevenfold increase in brand awareness, versus using banner ads. The startup closed the year with $300K in revenues, which isn’t too shabby for having been up and running for four months at the end of the year.

These results have been intriguing enough that investors are buying into DoubleRecall’s strategy, as the startup has announced that it has raised $1.6 million in seed funding. Like the other startup’s in YC’s summer batch, DoubleRecall was offered $170K from Yuri Milner and SV Angel’s Start Fund, as well as Y Combinator. Since then, Digital Garage, Itochu Ventures, Mentor Equity and TEEC Angel have all joined in to bring the round to $1.6 million.

Sure, this model is great, in that it’s got the potential for publishers to monetize through an alternative approach, and readers don’t have to wrestle with paywalls, but with this slight description, readers may be inclined to see this as a me-too idea very reminiscent of the same strategy that has seen Solve Media attract buzz and venture capital.

DoubleRecall COO Julien Coustaury tells me that the main similarity between Solve and DoubleRecall is that, at some point, a reader has to retype words from text into a textbox. Solve’s “TYPE-IN” platform replaces those fuzzy CAPTCHA words and numbers with a brand message or logo, with an input box. Essentially, they’re using input boxes for advertising. DoubleRecall, on the other hand, doesn’t want to advertise on the input box, but instead wants to serve some non-branded text readers have to recall, and use that to unlock content.

In most cases, this would come in the form of pay walls. Sure, publishers, content producers need to make money, but readers generally shudder at pay walls, especially if they’re not loyal customers of the brand in question. Those who read the Wall Street Journal everyday don’t mind paying a bit more for some of their content, while casual readers may seethe at finding a pay wall, when they were looking for a specific article that couldn’t be reached other than by paying.

Thus, DoubleRecall works with publishers and sites to maintain this wall, but replace it with another gateway. They get the user clicks, show the content they want to show, and then get to give readers access to the content anyway. It can be a win-win, although there’s still a lot more testing to be done.

DoubleRecall is opening headquarters in NYC this month, as it works to expand its reach internationally (the team is originally Slovenian, and gained a bit of European traction in the earl-going), launching in Japan later this month. So far, the startup has signed on 40 publishers and 50 brands in total, and will look to use its new infusion of capital to fuel this international expansion and ramp up hiring.

The company also has a social component to let brands share the best from their social media streams, as well as real-time monitoring and report making to enable them to instantly adapt to feedback.

For more, check out DoubleRecall at home here.

Inherently, we like doing things in groups, as it makes our experiences more social. It’s not about what we’re doing so much as who we’re doing it with that makes our experiences enjoyable. Group messaging took off two years ago, overrunning SXSW, as a better way to keep groups of people engaged; Kickstarter has grown like a week thanks to the power of the crowd lending legs to fledgling projects that need quick capital to get off the ground.

A new startup launching today called Crowdtilt is taking a page out of Kickstarter’s book, riffing on “crowdfunding,” but instead choosing to call itself “groupfunding” or a “Kickstarter for groups of friends.”

What does that mean? Well, we all love Kickstarter, but if you’re looking to pool money to throw your friend a birthday party, for example, that ain’t going to happen on Kickstarter. For a good reason, but that doesn’t mean the crowdfunding model can’t work. Thus, Crowdtilt has built a site that makes it simple for groups of friends to organize things to do together, with the specific focus on making it easy for the organizer to collect money from anyone.

How does that work? The site allows you to easily create a campaign, like “Help Hagan get to San Francisco” or “Phish Party Bus in DC,” while specifying how much money is needed for the campaign to actually happen — or in the startup’s lingo — “tilt.” You can then send this campaign out to your friends, who can authorize their credit cards for a certain amount with Crowdtilt.

Like groupbuying, friends’ credit cards won’t be charged until the campaign has tilted, or in other words, the specified amount has been reached. Not dissimilar from Kickstarter in this way, especially as projects have a certain amount of time before they become defunct.

Crowdtilt gives the organizer and friends 7 days to raise their total, and then shuts it down. And the startup, at least initially, isn’t taking a cut of credit card transactions. Although the need for a clear business model remains, Crowdtilt is trying to keep their platform as frictionless as possible in the early going to try to reach critical mass.

Testing it out within the confines of Y Combinator, Crowdtilt Co-founder James Beshara says that the current YC batch used Crowdtilt to organize buying a communal pickup truck that current founders can use to move their stuff in and out of offices, etc., as well as using it to organize social events like BBQ’s. I mean, it’s deceptively simple: One person creates a campaign, anyone else can contribute, paying when it meets the benchmark.

Bashara told us that the platform started under the auspices of a way for charities to efficiently collect donations, but he decided to pivot once he saw the idea taking off among groups of friends. Other unexpected use cases have emerged in early testing, like a couple in Denver creating a campaign for friends and family to contribute towards the cost of their wedding, rather than putting it all on the groom’s father.

Crowdtilt currently has 3,000 users, and the number of campaigns has been doubling every seven weeks, with campaigns succeeding in raising 188 percent of the proposed total. And all this has come entirely through word of mouth. The team soon plans to add social features to their model, allowing people to follow their friends so that you can be quickly notified when they create campaigns.

Unlike Kickstarter, there’s no requirement for users (or organizers) to specify multiple levels of rewards, apply, and wait for approval from management. Simply create a campaign and share it with the people who you want to share it with, pay when you get there. And it doesn’t just have to be your friends. I almost feel like I’m repeating myself, because the idea is so simple, but in that way it’s intuitive, and potentially savvy.

The longterm goal for Crowdtilt is to become the default way to manage all group-based transactions online. Right now activity happens on the Crowdtilt portal, but the team wants to take the experience to other websites, where the UX of sites that rent hotel rooms, for example, could integrate the Crowdtilt model as another way to serve their customer. And that’s where revenue models would enter the picture.

I don’t know, maybe it’s because it’s Friday, maybe because I’ve wanted to build something similar myself, I think Crowdtilt is really onto something here. Come on, trolls, you hate group email and “reply alls,” so when APIs spread this around the web, you can use it to buy a new couch for your mom’s basement.

Check out Crowdtilt at home here, and let us know what you think.

If you’ve ever set up an automatic ‘Bill Pay’ feature on your bank account to pay off your utility and cable bills, then you’ve taken advantage of a nifty feature called an ‘interbank transfer’, also known as an ‘Automated Clearing House’ payment. Once they’re set up, they tend to be very convenient — the amount of the bill is automatically deducted from your account, saving you the hassle of having to write yet another check (or fill out another online form) each month. Merchants benefit from this system as well, because their fees are significantly lower than those that are charged by the credit card companies.

Thing is, this feature is typically only available for paying bills from big companies — it’s rare to see a smaller online merchant that’s offering these automatic transfers, because the process for them to set it up is complicated and costly. Until now. Y Combinator-backed startup GoCardless is launching today as a UK-based service that allows smaller merchants to easily set up interbank transfers for customers.

Part of Y Combinator’s Summer 2011 class, GoCardless was founded in 2010 by Oxford graduates Hiroki Takeuchi, Tom Blomfield and Matt Robinson. GoCardless is also announcing a $1.5 million round led by Accel Partners, Passion Capital, SV Angel, Start Fund, and Y Combinator. Proceeds will go towards building out the team and product, and expanding the merchant base.

The service is offering a REST API that allows smaller merchants and companies to easily integrate these automated transfers into their sites for one-time and recurring payments. By bypassing the credit card network, GoCardless is able to offer the service for one-third to one-fourth of the cost of most network-based payment options — the fees charged are around 1 percent (but will never reach higher than 2₤ per transaction, no matter the amount).

As the startup explains to me, interbank transfers are commonly used in the UK and Europe to pay bills from giant companies, like your gas or phone bills. But each of these payment applications had to be custom-developed by a consultant, and negotiated individually with each bank — which is an impossible task for most small businesses.

GoCardless has spent the past year speaking and negotiating with banks, doing all the requisite legwork for broad approval. And, aside from the lower fees, another advantage of interbank transfers is that merchants don’t need to worry about credit cards expiring (which is a huge problem with recurring or subscription payments) and there is no need to deal with PCI compliance.

For consumers, GoCardless makes it quick and easy to make payments. After the initial sign up, users can authorize future payments anywhere GoCardless is offered with just one click. The company has also created a dashboard where users can easily manage all of their payments made via their bank accounts, giving them more control over their online spending.

Since launching a beta product in late 2011, GoCardless has already integrated with over 300 merchants and is growing quickly. The startup has over 1,000 merchants in the UK who are on a wait-list. For example, Kashflow, an online accounting service for SMEs, integrated with GoCardless to help its customers collect money. Other users include SaaS companies and those who charge for digital content.

Interestingly, Dwolla is also doing something similar in the US, allowing an easier way to accept payments (and reduce fees) for merchants. One advantage GoCardless has in its favor across the pond is that it is fairly commonplace to pay via interbank transfer in the UK when it comes to major company bills.

Editor’s note: The following is a guest post by Jon Paris, CEO and co-founder of Astrid To-Do. Astrid participated in AngelPad and immediately raised a successful seed round from Google Ventures and other investors. His opinions are his own.

Incubators are playing an increasingly vital role in acquiring meaningful investment for first-time entrepreneurs. TechCrunch reported that elite accelerators like Y Combinator receive on average one application every minute, and AngelPad reminds its participants that it is many times more selective than the Harvard Business School.

Incubators ask for a 2 to 10 percent stake in your company, a sum that could alternatively be used to attract a junior co-founder or provide meaningful ownership to the first few engineers you enlist. In return, incubators offer intensive coaching, networking with other founders, and warm introductions to likely investors. Incubators give first-time entrepreneurs and international teams alike a crucial link to Silicon Valley.

In addition to the giving up of meaningful equity there are other downsides to consider before participating in an incubator. Most have a schedule that’s built on a demo near the end of the program. While many companies view that external structure as helpful, others can find that working with such a timeline damages their business.

The long lead up to D-Day could mean a delay in fundraising or product launch, which in turn can translate into missed opportunities. There are other potential pitfalls, from committing too quickly and prematurely to an idea, to trying to scale before properly understanding a market and the company’s place in it. And with any robust community, there’s the danger of succumbing to groupthink. Founders need to remember they understand their market better than anyone.

For most first-time founders, these downsides are far outweighed by the benefits. Below are some lessons I regularly share with prospective entrepreneurs interested in applying to incubators.

1. Know their interest and expertise

When planning to apply to such incubators as 500 Startups, Y Combinator, TechStars or AngelPad, watch any and every online video you can find of incubator leaders outlining what they are looking for and what they can offer your company. Numerous incubator leaders, including Paul Graham, Thomas Korte and Dave McClure, have explicitly mapped out what they can bring to the table and what kind of companies they are targeting.

Know what’s important to the investors: Dave McClure at 500 Startups will want you to have a deep understanding of the micro-economics; AngelPad loves great B2B opportunities; and Y Combinator appreciates founders who have already demonstrated their smarts with submissions on Hacker News. They all will make exceptions, but you should pitch in a way that will resonate with the specific incubator.

2. Understand their challenge

All incubators play an arbitrage game, curating great early-stage startups for the community of larger investors. They need to believe they can readily convince other investors to put in an even larger sum at the end of the program. It is your job to convince them you have the raw material, which usually means great engineers (preferably branded by great universities or companies), beautiful design, strong team dynamics, and an ability to get a meaningful user base. If you have these ingredients, the incubator can help you polish your pitch and get in front of investors.

3. Intros matter

Getting a friendly introduction from someone the incubator knows can prevent your startup from getting buried in the application avalanche. The best intros come from people they trust who have insight into what it takes to start an effective company. Founders, fellow investors or former colleagues (hint: search LinkedIn for shared connections) can help get that needed extra attention. Intros from their friends and family members outside the startup ecosystem will be much less helpful. I got a key intro to AngelPad from the MoPub founders and to Y Combinator through Posterous co-founder Garry Tan.

4. They will be watching closely

Many incubators now require a video submission with your application and will follow up with an in-person or video chat with you and your co-founder(s). While these might cause the incubator to miss great people due to some unconscious bias, they also give a glimpse of confidence, charisma and, perhaps most importantly, your relationship with your colleagues.

The least you can do is ensure that everyone pays attention to whoever is speaking. If the engineer rolls his eyes, yawns or corrects the CEO when he speaks, the incubator might regard your startup as radioactive. If you get a live interview, make sure everyone has defined roles, with the CEO answering all market and business questions, the CTO answering all technical questions, etc. And practice the interview dozens of times. Enlist smart friends to barrage you with questions in rapid succession until you can confidently provide short and clear answers.

5. You’ll get a new Alma Mater

Incubator provides fantastic coaching and rich networking opportunities with other companies and investors during their programs. This is especially helpful for international teams that can boast great products and meaningful traction, but lack connections to the Silicon Valley investor community. But the time in the incubator is just the beginning. Months out, the mentors continue to provide trusted counsel and meaningful introductions.

Our incubator class provided us with thousands of dollars in free services and have consistently been among the first to try our new products, provide honest feedback and give them a five-star rating in the App Store. The camaraderie runs deep, fostered by shared experience and an understanding that each companies’ success will elevate everyone’s status.

Many first-time entrepreneurs succeed without participating in an incubator, in the same way many professionals can have successful careers without going to college. But this will increasingly be the exception. Young companies passing on the incubators can squander time, even years, when they could be building their networks, getting greater market feedback and scale their business with investor dollars.

In the past year, I have seen four great teams with early traction and Stanford founders stagnate while trying to do things on their own. Each had a few connections with the investor community, but they didn’t compare to what the best incubators deliver. Don’t make their mistake — if you want to build a company with world-wide impact, joining an incubator may be your most important early step toward achieving success.

At this point quite a few internet companies have protested H.R. 3261, the Stop Online Piracy Act (SOPA) in creative ways. Held by many to be the worst thing to ever happen to the Internet if it passes, SOPA would makes it really easy for copyright holders to force sites offline that they think are offending, among other things.

While the judiciary vote has been delayed until next year, the list revealing the companies who support the act was released yesterday, and many startups, such as Reddit, have begun to drill down into boycotts of individual companies like domain provider GoDaddy.

The company boycotts  have sparked a thread on Hacker News, where user Solipsist posted a link to the list with the comment, “While I understand your sentiments towards SOPA, are you really going to distance yourself from all of these companies?”

To which YCombinator founder and investor Paul Graham replied,

“Actually that’s exactly what I thought when I saw the list yesterday. Several of those companies send people to Demo Day, and when I saw the list I thought: we should stop inviting them. So yes, we’ll remove anyone from those companies from the Demo Day invite list.”

Disinviting offending companies to YCombinator Demo Day? That takes, um, guts. Graham told me in a followup email that he was indeed serious and had just given the list of SOPA supporters to the people in charge of the Demo Day invites, ”I don’t know exactly which companies had people on the list.  But I know which will now: none of them.”

When asked if that boycott extended to investors in those companies, Graham responded, “Several of the companies on the SOPA list have venture arms.  I encourage startups to boycott them.  We’ll certainly encourage all the startups we’ve funded to.”

The rationale? “If these companies are so clueless about technology that they think SOPA is a good idea, how could they be good investors?”

The next YCombinator demo day is scheduled for March 27th, 2012.

You can read through our full coverage of SOPA here.

Update: So which companies on the SOPA list are being denied YC invites? Well no one except Demo Day organizers knows for sure, but as BI’s Matt Rosoff points out, Comcast/NBCUniversal’s Comcast Ventures has a stake in YC company CarWoo and listed companies like CBS Disney, GoDaddy, News Corp., Sony, Time-Warner, and Visa have all made tech investments in the past.

Last week, Erick wrote about the dramatic increase in startups and early-stage businesses we’ve been seeing over the last few years, likening the phenomenon to the Cambrian Explosion. In these fertile times for startups, naturally, there’s plenty of funding to be had: In the last year, according to CrunchBase, there were more than 1,100 seed/angel funding rounds, up from 855 in 2008.

There are fewer barriers to startup creation now than ever before, and as businesses pop up left and right, so have the incubators and accelerators that provide these companies with the early fuel they need to build their products. Y Combinator, one of the more well-known startup incubators in the world, is now receiving over one application every minute, for example, and recently expanded the size of its classes to keep pace with demand.

Each of the prominent incubators, Y Combinator, TechStars, 500 Startups, and Founder Institute, among them, have been expanding their programs and networks, both at home and overseas. TechStars has added hubs in a number of cities, and both 500 Startups and Y Combinator recently launched their “largest batches yet”. It seems that with each passing “semester”, enrollment continues to grow.

But which of these incubators is the largest? It depends on how you define “largest” — each of these incubators rock and each has its own case. But one in particular thinks it has the “biggest” case: Founder Institute, today announced that it has become the largest incubator in the world — at least in terms of the number of alumni, mentors, and locations.

Founder Adeo Ressi told us that the incubator has now helped launch 415 startups worldwide, with a total of 483 graduated entrepreneurs. Founder Institute has done so in less than 2.5 years, and Ressi says that, when the ten operating sessions graduate in the next two months, the Institute will exceed 500 companies launched and is on pace to launch an average of two tech companies per day in 2012.

The Founder attributes the incubator’s growth to, among other things, focusing not on bringing startups to Silicon Valley, but on building startup ecosystems in national and international markets, allowing entrepreneurs to create their businesses at home. The Institute is directly operating in 20 different locations and counts over 700 mentors among its flock.

Of course, while Founder Institute may be the largest in terms of scale and alumni (Y Combinator has graduated 317+ companies, TechStars 114, 500 Startups 174, and Plug and Play 300+), it does not hold claim to being the largest in terms of the number of exits that generated cash returns or the amount of money raised.

The top 21 companies incubated by Y Combinator, for example, have a combined value of $4.7 billion, said Founder Paul Graham. Comparatively, 41 percent of Founder Institute graduates have received funding, for a total of more than $30 million.

Founder Institute companies have averaged about $2.5 million for their series A raises, the largest of which was $5 million. While the Institute has produced entrepreneurs that have gone on to found companies like Cake Health, I-DISP, Identifii, Kaliki, Rentcycle, and Udemy, Founder Institute has yet to produce high-valuation companies like Dropbox and Airbnb — both of which are Y Combinator graduates and have raised over $100 million.

While more than 100 of Founder Institute’s graduates are based internationally, 20 percent have female founders, 40 percent have been funded, and the Institute plans to add another 75 international locations, the incubator has to be careful that it isn’t just becoming a startup mill. Entrepreneurs want to be sure that they receive fair ROI, and the total amount of funding raised by graduates, the number of successful exits, and high valuations can be a good marker for determining this.

Founder Institute accepts an average of 30 percent of the startups that apply to its program (compared to 3 percent for Y Combinator), so startups know that they have a better chance of getting in. Yet, unlike other incubators, Founder Institute doesn’t invest in its startups, though it does take 3.5 percent of the graduating companies and puts it into a pool for the founders, mentors and people who operate local chapters.

The key for Founder Institute is its international footprint. Seed Camp, in contrast, has a significant (and growing) international presence, but it doesn’t have the same connection to Silicon Valley that Ressi has forged over the last 2.5 years. There is a growing push to invest in up-and-coming international tech hubs, and with the Institute planning 75 new locations (in London, Buenos Aires, Seoul, Bangalore, Abu Dhabi, Istanbul, and Cape Town, to name a few), the incubator may have a leg up on incubators focused solely in the U.S.

It’s also important, as part of this expansion, to get support of local governments and ecosystems. Singapore’s government has been backing 100 percent of Founder Institute grads with investment grants, market access and other services — so even without investing significant capital in startups themselves, it’s partnerships like these that will make Founder Institute continue to fly — without being seen as a startup mill.

Applications for Founder Institute’s Winter 2011 program are being accepted through tomorrow, so readers interested can take FI’s “Predictive Admissions Test” and apply here.

Back in August, Y Combinator debuted its largest (and I’d say most stellar) class of startups to date. One of those companies is now ready to fully peel back the curtain and launch its app into the public fray. Vimessa is a free video voicemail app for the iPhone that allows consumers to send high-definition video messages to any mobile phone number or email address. And, unlike FaceTime, iMessage, MMS, and other video messaging services, the app works on all mobile devices and desktops, including feature phones, smartphones, and tablets.

What’s more, users don’t need to have Vimessa installed or even own an iPhone to receive these free high res messages, they can access them through a simple link. However, because it’s faster to send, receive, and view messages for those who have the app installed on their phones, iPad, Android, and Windows Phone apps are on their way.

Vimessa CEO and Co-founder Peter Clark said that he thinks the value proposition of his startup is that it offers a fast and convenient user experience — one that’s similar to texting — but holds more visual and emotional power thanks to video. Vimessa users can share an experience, show a place, invite others to join them at an event, or just talk about what they’re doing over cellular or WiFi connections. Vimessa also shows which users have Vimessa installed and stores videos securely in the cloud and synchronizes them with users’ mobile devices.

Of course, thanks to MMS, sending video messages via mobile devices doesn’t seem like a new idea, but current solutions have been predominantly focused on video calling. Vimessa thinks that in spite of apps like FaceTime, this live video functionality isn’t really what customers want. Instead, users want to replay and reply to video messages at their own pace. Going slightly against the grain, Vimessa believes, for most synchronous conversations, audio will do quite nicely, thank you.

What’s more, Clark said that coordinating Skype video calls is difficult for people trying to reach international recipients (something that many heavy Skype users know all too well) and traditional voicemails aren’t personal enough. Vimessa takes advantage of the ubiquity of front-facing cameras on smartphones, which has made it exceedingly easy to for anyone to create insta-videos from any location, and hurdles this pain point.

Thus, Vimessa’s ability to send a video message to anyone, regardless of whether or not they have the app installed, solves a major mobile communication headache and gives the app a big leg-up on MMS. It’s also a nice bonus that there is no limit to the amount of video messages one can send through the app. Though it’s important to point out that video messages will “self destruct” after two months; however, users can choose to store their videos “forever” for an affordable $19 per year.

But for Vimessa to really kick ass, it will need to add some key features, like sharing conversation threads on Facebook and Twitter, send pre-recorded video stored on smartphones, group messaging, and video transcriptions.

In the big picture, considering text messages look about the same today as they did ten years ago and the ease of video recording only continues to improve, these kinds of easy, device and platform agnostic video messaging solutions are sure to be a big part of the global communication infrastructure going forward.

For more on Vimessa, check ‘em out at home here.

Yesterday, Facebook founder and CEO Mark Zuckerberg took the stage at Y Combinator’s Startup School in a candid interview with Y Combinator Partner Jessica Livingston. You can watch the full interview here, and it starts around the 43 minute mark, and lasts for roughly 40 minutes. If you have some time to spare, it’s well worth a look.

Zuck revealed a number of fascinating things about entrepreneurship, founding Facebook, and product development, but one of the more interesting (and surprising points) came at the end of the interview when Livingston asked him what he would do different if he could go back in time. Zuck replied: If I were starting now I would do things very differently. I didn’t know anything. In Silicon Valley, you get this feeling that you have to be out here. But it’s not the only place to be. If I were starting now, I would have stayed in Boston. [Silicon Valley] is a little short-term focused and that bothers me.

He explained that he had a conversation once with Amazon founder and CEO Jeff Bezos about this, and the average time someone stays in job at Seattle is twice as long than it is in Silicon Valley. “There’s a culture out here where people don’t commit to doing things, I feel like a lot of companies built outside of Silicon Valley seem to be focused on a longer-term,” he explains. “You don’t have to move out here to do this.”

“There’s this culture in the Valley of starting a company before they know what they want to do. You decided you want to start a company, but you don’t know what you are passionate about yet…you need to do stuff you are passionate about. The companies that work are the ones that people really care about and have a vision for the world so do something you like.”

Zuckerberg also talked about the early days, when he was at Harvard, thinking of the idea for what would become Facebook. I was in denial that we were going to make a company early on. When I was in college, I had a lot of conversations with my friends about the direction the world was going to go to and we cared more about seeing this happen. We built it and we didn’t expect it to be a company, we were just building this because we thought it was awesome, he explained

When Zuck moved out to Silicon Valley in his sophomore summer, he thought that maybe one day he and his team would develop a startup, but didn’t think Facebook was that startup. “It was not like in the movie, there was no drinking. We all just lived in a house, iterated, kept going,” he said candidly. “It wasn’t until we got our first office in Palo Alto where things became more like a company. We never went into this wanting to build a company.” But a company is the best vehicle in the world to align a lot of people to achieve a mission, he said.

Livingston asked Zuckerberg about how he pitched Facebook when he first pitched the business to Battery Ventures in Boston in 2004. “I barely remember that but I agree that it happened,” he recalled. “I don’t think I said anything and Eduardo said some things but it was fine because I didn’t want to do that anyway.”

Zuckerberg said that Eduardo early on said that Facebook needed to raise money, and he was skeptical of VCs. “That was one of the reasons that we accepted from Peter Thiel, because he could relate to us on a founder level,” he explained, referring to Thiel co-founding his own companies, including PayPal. Zuck said that in Silicon Valley, everyone was talking about flipping companies and he found that to be unattractive. Another potential investor Zuck really was passionate about was Donald Graham, CEO and chairman of The Washington Post. He explained that he came close to taking money from Graham, but Graham actually encouraged Zuckerberg to take money from Jim Breyer at Accel Partners. Zuck saw this as the “best of both worlds.”

He also gave startup founders advice how to guide on how to handle acquisition offers, and gave interesting insight on how he look at Facebook’s own acquisition offers. We really had one phase of this and the only reason why its’ this big story that everyone knows about us turning down a lot of money is because I messed up the process. It’s one of the biggest management mistakes I made through Facebook’s whole history. I learned a lot about the team at that time, and ended turning over a lot of that same team. I wasn’t in it for the acquisitions, and I wanted people around me who were in it for the long-term, he said.

It’s not clear that you should turn down offers, he explained but you should take it if it means the company can go in the direction you want it to go on. “If you go through some big corporate change, it’s just not going to be the same,” Zuck said.”If we sold to Yahoo, they would have done something different, if you want to continue your vision of the company, then don’t sell because there’s inevitably going to be some change.”

One of the key parts of operations is a ‘growth team,’ which is a centralized team Facebook set up to help its users stay connected an engaged. For example, Zuck said that through this team, the company found that members need to have at least ten friends to have enough content in the news feed to come back to the site. So Facebook reengineered the whole flow of the site when someone signs in to focus on having people find other people to connect with, so that people can get connected with friends (and meet that minimum) right away. Zuckerberg said that the company has exported this idea to another startups, including Dropbox. “Once you have a product that you are happy with, you the need to centralize things to continue growth.”

When Livingston asked what surprised Zuck most in the history of building Facebook, he replied honestly, “most things were surprising.” “I don’t pretend that I had any idea that I was doing. I always felt like we were so close to dying in the first years, and were afraid that Google was about to build our product and we were going to be screwed, and look how long it took for them to build our product,” he said laughing, referring to Google’s newly launched social product Google+. “You are going to make a ton of mistakes, you don’t get judged by that.”

As for what Facebook’s future is, Zuck shed some light on his vision for the network. “I think the story that we look back will be the apps and things that are built on top of Facebook. The past five years have been about being connecting people and the next five to ten years are about what are all the things that can be built now that these connections are in place.”

And I’ll leave you with one of Zuck’s more memorable quotes from the talk, “The biggest risk is not taking any risk…In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

In episode II of Erick Schonfeld’s Founder Stories interview with Dropbox co-founder, Drew Houston, Houston describes how releasing a demo video to Hacker News during Dropbox’s early days catapulted his company into elite company.

“I hoped that the response would be good so that Paul [Graham] and Y Combinator would see it.” The response was better than good. Houston says the video held the top spot at “Hacker News for a couple of days” and it turns out the right people were watching. One viewer was Arash Ferdowsi, who was so impressed that he paired up with Houston as a partner. Houston also credits the video with helping him receive almost immediate and valuable feedback.

Asked if he was worried about copycats stealing the concept at the time – Houston responds, “It is easy for me to explain the idea, it is actually really hard to do it.”

Below, Houston takes us inside Y Combinator and describes how Paul Graham weighed in with key advice while Houston was under the Y Combinator wing. ”Our first sort of marketing attempt was like throwing spaghetti at a wall …we really struggled in terms of how to articulate this with investors because we had never really done that before, and Paul was really helpful to us in terms of distilling down the idea into a much shorter and sort of more compact presentation.”

Advice in hand, the team went before a room full of investors at Demo Day, where you get “waived like a piece of steak” and hit it out of the park by walking them through an admittedly risky demo that could have wiped-out their entire PowerPoint presentation.

Having survived the high-wire act, Houston says today, “Dropbox users save a billion files every three days.”

Make sure to watch the entire video for additional insights and be sure to catch the first episode of Schonfeld’s interview with Houston here.

Past episodes of Founder stories featuring Eric Ries, Fred Wilson and Dustin Moskovitz are here.

Episode III of this interview is coming up.

Wow. Silicon Valley-based startup incubator Y Combinator is getting just over one application per minute, according to a Tweet from co-founder and partner Paul Graham. Today is the last day for applications for the next Y Combinator class, and clearly founders are in a rush to get their applications in.

Back in August, Graham said that the acceptance rate to Y Combinator is just 3%. But because of an increase in applications, Y Combinator has increased its class sizes of late.

In June, Graham revealed that total value of YC companies is around $3 billion. In total, YCombinator has funded 316 startups including the summer round that just debuted in August. Checkout Graham and fellow Y Combinator partner Harj Taggar’s most recent office hours with startup founders at TechCrunch Disrupt here.

If you’re advertising a product, would you rather simply have an image of that product, or have your consumers be able to watch a video of that product in action? Unless you’re sarcastic like myself, you probably answered with the latter, because the truth is that videos help products sell online. This is true even for those vendors that sell products that one wouldn’t necessarily assume would be made more attractive with video. Consider Zappos, for example, which currently offers over 50,000 product videos. Zappos also happens to do a pretty good business.

For SellStage, a startup from this summer’s batch of Y Combinator companies that is launching today, Zappos is the standard. But most big eTailers are far behind the shoe seller in terms of video content. So SellStage is launching a platform that is designed to make it easy for both big and small businesses to add video content to their websites to showcase their products.

Product videos tend to be different enough from other video content that it needs a specific, if not niche, solution. Videos also tend to be a pain in the ass to integrate with product pages, as you can’t just take your normal embed approach, because it will take up too much space, and may even displace the product images.

So, SellStage wants not only host and stream your product videos, but also play them in a lightbox. So after your product video plays, you want a call to action, not simply a replay link. Of course, SEO is critical eCommerce sites, and that most product videos don’t take this into account, so SellStage automatically generates sitemaps optimized for video search crawlers.

On the merchant side, SellStage offers great value proposition in that all you have to do is add one line of Javascript to the product page, and the startup handles the rest, the players, the hosting, and the streaming. You can then drag and drop your videos where you want them, all with a few clicks.

What’s more, SellStage videos work on iOS devices, which a lot of product videos don’t because they use Flash. The startup is also working on tools to make video production easier, including this forthcoming iOS app, and some “you shoot, SellStage edits”-type features.

The startup, while still in its early form, is going to be very useful to marketing departments who want to manage video on their eCommerce platforms, especially for those who have a large product catalog and want to add 500+ videos and not have those turn into 500 IT requests.

“Retailers who consider their expertise a competitive advantage need to find a way to use their greatest asset – their knowledgeable sales staff”, SellStage Co-founder Tom Saffell said. “To differentiate their online stores from everyone else. Video lets them do that”.

Retailars already have everything they need to make great video: The store is set, the sales staff are the actors, and the script is whatever you say to the customers in store — your sales pitch, says Co-founder Thomas Escourrou.

But how is SellStage going to monetize? The Co-founders told me that they are going to establish a tiered pricing structure that takes into account how many videos the company wants to make, host, and stream, and whether or not they want production assistance from SellStage itself. As the startup moves forward, it also will begin giving its customers more customization options.

SellStage is launching in private alpha today, but is making 50 priority invites available to readers. Simply visit the startup’s homepage and enter “concorde” for a sneak peek.

Y Combinator is about to wield its rapidly-growing influence in the tech community to help startups everywhere. And it’s taking on one of the hottest (and most fear-inspiring) issues around: patents.

Today YC cofounder Paul Graham has written a note called The Patent Pledge in which he proposes that tech companies should commit to a straightforward promise: “No first use of software patents against companies with less than 25 people.”

That’s the entire pledge. There’s no legalese or confusing conditions around it. But it could shake things up for tech companies in a big way. More important: unlike government intervention, which would likely take years, YC’s Patent Pledge could be widely adopted in a much shorter timeframe. YC has set up a site at ThePatentPledge.org that lists a roster of the companies that have agreed to the pledge, which already includes fourteen well-known YC alumni like Airbnb, Disqus, Hipmunk, and Weebly.

Now, lately you’ve heard a lot about patents with respect to mobile devices — Google is widely believed to have been interested in acquiring Motorola largely because of the latter’s large patent trove, which it can use to defend itself against Apple and Microsoft. But this isn’t an issue that’s particular to mobile, or even big companies. Graham says that one of the biggest concerns new founders often have is whether an incumbent competitor (with a large legal team) will try to kill them off early on by threatening them with patent suits.

Graham’s proposal is for tech companies to publicly commit to the pledge above, which would ameliorate some of these concerns, at least for companies just getting off the ground. Graham likens the pledge to Google’s “Don’t be evil” mantra, in that it will help attract the best kind of people. From Graham’s post:

The patent pledge is in effect a narrower but open source “Don’t be evil.” I encourage every technology company to adopt it. If you want to help fix patents, encourage your employer to.

Already most technology companies wouldn’t sink to using patents on startups. You don’t see Google or Facebook suing startups for patent infringement. They don’t need to. So for the better technology companies, the patent pledge requires no change in behavior. They’re just promising to do what they’d do anyway. And when all the companies that won’t use patents on startups have said so, the holdouts will be very conspicuous.

Of course, this isn’t going to solve the broader patent issues by any means. It obviously doesn’t help larger companies, like Google in its multiple battles over Android. And it doesn’t protect startups against patent trolls, who couldn’t care less if they’re detested — because they already are.

But Graham says that at least as far as startups are concerned, patent trolls are far less worrisome to entrepreneurs than incumbent competitors looking to stifle competition. The trolls, he explains, are just looking to get money — while the competitors are hoping to wield their patents to kill startups off.

I’ll be curious to see how far the Patent Pledge spreads. As Graham says in the article, companies like Facebook and Google aren’t out suing startups because they don’t have to, and I expect we’ll see them opt into the pledge quickly. As for those companies that are less startup-friendly, I expect we’ll hear a lot of hemming and hawing — and I hope YC and the community really holds their feet to the fire.

Graham closes his post, which is worth reading in its entirety, with the following:

Companies that use patents on startups are attacking innovation at
the root.  Now there’s something any individual can do about this
problem, without waiting for the government: ask companies where
they stand.

Assumptions are rarely safe. But I’m sure most of you will come with me when I go out on a limb to say that, by and large, kids love toys. Yep. And they also love cartoons. This has been true as long as either have been around, however, a more recent taste to trend among the world’s wee ones: Love for the iPad. Some even said it was the toy of the year in 2010.

A new startup from Y Combinator’s gigantic summer batch of 63 companies launching today, called Launchpad Toys, agrees that tablets are big among kids — and that they just happen to be an incredibly effective educational tool to boot.

In short, Launchpad wants to bring toys into the digital age. The startup is building a suite of apps for the iPad that allow children to create, learn, and share their ideas through games — in an effort to become “the Lego of digital play”. Through its apps, the startup aims to bring classic toys (and toy makers) like Play-Doh, Crayola, and Erector Sets to the iPad, but with an educational backdrop that is standardized and meets national educational requirements.

The first piece in Launchpad’s suite is Toontastic, a game launched in January that enables kids to create and storyboard their own cartoons (choosing from a bunch of different characters and backgrounds) and even move their characters around the screen via touch and record audio to give them a voice. The goal is to help children learn about the art of storytelling, while allowing them to enjoy the fun of animating their own cartoon, before sharing it with friends and family — and even winning awards.

Toontastic has been featured by Apple four times since going live and was recently added to the App Store Hall of Fame, which in turn has seen the app attract over 40,000 paid downloads and has led to its users creating over 170,000 cartoon characters. Check out how kids react to the app here; not surprisingly, they love it. (And so do their parents, apparently, as Toontastic was the recent winner of the Parents’ Choice Award.)

That’s probably because the subject matter in the app meets with late elementary-level creative writing standards, which gives parents a sense of well being while watching their young ones on an iPad — not to mention that the iPad’s multitouch functionality gives the app a collaborative spin that encourages parents to join in to play with their kids. Touchpad also creates a parent/teacher guide for its apps; check out the guide that explains some of the educational intricacies of Toontastic and how it matches up to National Standards for Creative Writing here.

What’s more, Launchpad didn’t just want the user experience to be limited to the standalone app, so the team created ToonTube, a global story-telling network, which allows kids to share the stories they’ve created on Toontastic with their family and other kids from over 100 countries. Users can browse the network from within the app, vote on the cartoons they like best, and interact with other kids. If a cartoon attracts more than 8 “likes”, then the creator of the cartoon earns a badge, while each badge collected unlocks new characters that can be used in stories.

The Launchpad team, headed by co-founders Andy Russell and Thushan Amarasiriwardena (who hail from prior lives at Hasbro and the Boston Globe, respectively) said that they’ve tried to take a specific educational subject matter — in the case of Toontastic, it’s creative writing and storytelling — and match it with a form of play (puppets, in this case) to provide an experience that fuses non-pedantic educational material with the fun of games.

Russell also tells me that Launchpad has had some great reaction from teachers — across the U.S. — and though the startup designs its apps to be consumer-facing (not for classroom-only use), he says that touch devices give both educational and game developers an opportunity to design for schools and kids, which was previously difficult to do because of the barrier for entry involved in integrating game consoles, etc. into the classroom. Launchpad’s suite of apps will continue to be designed with the home in mind first, but the key, he says, is to tailor the experience so that it is optimized for both.

In terms of the future roadmap for Launchpad: The founders said that they want to continue building apps that merge learning goals with play patterns, using this formula to expand into other verticals. They also plan to soon create a toy store to enable in-app purchases, like new characters and backgrounds.

Using the iPad’s ability to save, share, and collaborate as a launchpad, the startup is on its way to creating a new generation of early learning toys. So far, they’re off to a great start.

For more on Launchpad Toys, check them out here. Let us know what you think.

Y Combinator has just unveiled the dates and times of its 7th Annual Startup School; 2011′s event will take place on October 29th at Stanford University, where hundreds will gather to listen to talks about entrepreneurship and innovation by some of the Valley’s most influential founders and investors.

While the event is free, it is always extremely popular. Attendees must fill out an application form, with a September 28th deadline, and founders and aspiring founders will find out whether they’ve been accepted on October 4th.  Past Y Combinator Startup Schools have included talks from Mark Zuckerberg, Ron Conway, Paul Graham and Andrew Mason, which explains the high demand.

Posterous founder and Y Combinator part-time advisor Garry Tan describes why the experience was so unique, “Startup School 2008 was my first interaction with YC — I didn’t know anything about starting a startup even though I had worked at one. It is probably the most direct way to get valuable wisdom from the most brilliant people in the industry, meet others like you… real hackers and future founders, not like any other startup conference.”

We will of course be covering it just like we did last year.

Yelp provides a compelling platform for small businesses to connect with consumers via deals, reviews, reservations, information and more.

But independent service professionals like hair stylists, bartenders, and DJs have a problem: if they jump from one establishment to another (which is quite common), they have a hard time taking their clientele with them. Enter Y Combinator-backed Opez, a platform that’s looking to help these professionals keep in touch with their clients on a long-term basis, making it easy to keep them informed of any job changes or hot deals they’re offering.

Of course, Facebook already offers Facebook Pages, which can be used for similar a similar purpose. But Co-founder Chris Tam says service professionals want to be able to engage customers but also maintain a distance, which is the problem with using Facebook Pages as their centralized business page. Tam adds that this product is built specifically for professionals in certain industries, such as DJs, bartenders, models, hair stylists, personal trainers, cooks, and waiters.

Service professionals can create a profile, upload photo galleries and videos, showcase work, create a vanity domain for their profile, and more. They can then encourage their customers to go to their Opez profile and follow them. Professionals can also post status updates and email their followers, but without either party seeing the other’s email address.

So if a professional switches jobs, he can email his follower list, and keep people updated on where he is working next. He can also publish updates to Twitter and Facebook directly from Opez.

On the customer side, anyone can see the profile of a professional on Opez, but in order to follow someone, you need to create a profile yourself. You can then post reviews on a professional’s page.

The idea of Opez could be powerful because it gives service professionals a platform that blends the parts of Twitter, Facebook and Yelp — and it fits a clear need. The question at this point is whether it is different enough from Facebook Pages that industry professionals will be willing to create a profile on yet another new network.

Initial results are encouraging: Tam says that the site is already seeing traction amongst bartenders, models, hair stylists and others. And he adds that a mobile app is in the pipeline.

When it comes to file sharing, there is no shortage of tools and services to help you transfer your files, big and small. There’s the old tried and true approach on email, or using VOIP services like Skype, or cloud-based services like Dropbox and Box.net, or the browser-based Ge.tt, to veterans like WeTransfer and YouSendIt. Then there’s newcomer, the social and sharing-focused Minus, which recently scored $1 million in funding and Sendoid, whose launch we covered back in March. The list is long, but new sites continue popping up, because no single business has a stranglehold on the market, and each method of file sharing has its drawbacks — and its limits.

A new startup launching in beta today, incubated in the most recent summer batch of Y Combinator companies, called Kicksend, aims to make it even easier to send and share large files, especially with one’s non-technical friends and family members. There are plenty of file sharing services available, but many of them are confusing to use or have needlessly complicated UIs, are expensive, or come with too much fine print. Even Dropbox, though it’s relatively easy to use, requires an installation process — which may be too involved if you just want to send a few files.

Email is great for small files, but with Gmail’s capacity restriction at 25 megabytes, for example, one needs to go elsewhere to send larger files. And sending via IM and Skype is synchronous, meaning that you need the other person to be online in order to accept the transfer. So Kicksend is trying to offer a better way that lets users automatically receive and download files, even if they’re not there to push the “accept file” button.

For now, there are two ways to use Kicksend: Through a web and desktop app. (Mobile, the important third piece to the puzzle, is on its way and should be available soon.) Users can sign up for an account or just login with their Facebook account to view which of their friends and family are already using Kicksend. Once a user is logged in, they follow a simple three-step process to send the files. Simply drag and drop the files (of any size) into the interface/prompt on Kicksend’s homepage and select the recipients, (the recipients need only an email address, they don’t have to be Kicksend users), and, then, press send. Fairly straightforward, methinks.

Kicksend also makes it easy for users to create lists of recipients, allowing easy group file sharing, and because the site offers realtime functionality, users will see instant notifications (Growl-style) on both the start of transfer and completion. Each file also has its own comment thread, which makes it easy for users to enter into a private conversation about the specific files being sent. Kicksend’s group file sharing and lists are similar in conception to Google+’s circles (except for file sharing, of course).

The site is currently free for up to 1GB of sending bandwidth, and, according to Kicksend Co-founders Pradeep Elankumaran and Brendan Lim, the startup’s future monetization strategy consists of adding premium features, wherein users will likely get a 10GB capacity per month, as well as delivery alerts, and a full set of detailed analytics. The startup also plans to add an enterprise plan for businesses, which will offer notifications, analytics, as well as the ability to mark certain files as fully “private”.

So far, just on a word-of-mouth basis, Kicksend has amassed 15,000 registered users and has sent over 40,000 files. At this point, the founders said, photos have been the most popular files shared, but musicians have also been using Kicksend to transfer large GarageBand files, as the use cases continue to diversify.

Kicksend’s desktop apps, available both for Mac and Windows, allow users to easily send big files, automatically downloading the files to the recipient’s computer. The founders gave the example of the case in which someone sends you a large batch of photos via Kicksend, and the desktop app automatically receives the files and will instantly organize them on your hard drive — all with direct hooks into your social graph via Facebook connect.

The startup’s backend infrastructure is also optimized for content delivery, so that it can rout any type of media and data to any end point; and when the startup launches its mobile apps, users will be able to take a photo on their phone and instantly rout the image to any other device.

The web app, too, is seamless and easy to use, allowing a user to browse all the files he or she receives and sends. The UI is simple, and really seems intended to have Kicksend become part of the infrastructure of one’s daily life, both on the desktop and on the web. Your parents are going to love it.

Kicksend’s current investors include Y Combinator, Start Fund, and SV Angel.

As we’ve written in the past, Drchrono, a startup thatsimplifies the professional lives of doctors by bringing electronic health records and much more to the iPad, has received official government certification. This is will result in doctors receiving $44,000 in incentives when they use drchrono as an electronic medical records platform.

As we’ve written in the past, drchrono’s iPad app allows doctors to schedule patient appointments, dictate notes via audio, take pictures, write prescriptions and send them to pharmacies, enable reminders, take clinical notes, access lab results, and, most importantly input electronic health records.

The electronic medical records element is key because the Obama administration is currently offering incentives for doctors to start moving their health records online. Drchrono will help doctors start, finish and manage this process. Because of this, the startup has been awarded aMeaningful Use certification, which allows doctors to receive up to $44,000 in government incentives for downloading the apps and using it enough to meet the Government’s requirement. The drchrono application tracks how much a doctor uses the EHR and automatically gives them key metrics to report to the government in order to get their incentive money for 2011.

The startup says the certification makes drchrono the first native EHR on the iPad to be certified for Meaningful Use.

Drchrono just raised $675,000 in seed funding from General Catalyst, Charles River Ventures, 500 Startups, Gmail creator and FriendFeed cofounder Paul Buchheit, Google’s Principal Engineer Matt Cutts, and the Start Fund.

My, how Y Combinator has grown. It wasn’t that long ago that the prestigious startup incubator had a dozen or so startups per batch. These days, class sizes are more like 60, and the alumni network is huge: in total, Y Combinator has invested in some 317 startups.

Given how many YC startups there are, it isn’t really surprising that a lot of them have some overlap, or are at least tackling similar problems. Today, YC is announcing an event that’s taking advantage of that fact: the Ad Innovation Conference.

The event, which takes place on September 14, will feature fifteen YC companies involved in building new ad-related technologies. Among the topics that will be covered:

NFC advertising; the use of Twitter and Facebook content in display ads; ad/game hybrids; embedding ads in the 3D space of videos after they’ve been shot (i.e. retroactive product placement); geolocal ads and offers; audience polling; the evolution of SEO; marketing on Facebook; monitoring competing AdSense campaigns; landing page optimization; ad-based alternatives to paywalls; and the future of QR codes.

The event is free to attend (you can request an invitation using the link on this page) — but you’ll need to be involved with an ad agency, big advertiser, or publisher to do so.

YC cofounder Paul Graham says that this is the first conference revolving around YC startups that’s been open to the public, but that it’s previously held internal conferences that have focused on issues like SEO and fundraising. It also sounds like we’ll be seeing more public-facing conferences focusing on different topics in the future.

YC is best known for its Demo Days, where it brings together top-notch investors for a whirlwind series of startup demos from its portfolio companies, and it’s also orchestrated other startup-related events including Startup School (a crash course in entrepreneurship), AngelConf (a similar crash course, but for prospective angel investors), and Work at a Startup (a rundown on what it’s like to be an employee at one of these fledgling companies).

Aside from being informative, these events have a nice side effect for the participating YC companies: they’re also great for recruiting.

Drchrono, a company that brings electronic health records to the iPad, has raised $675,000 in seed fundig from General Catalyst, Charles River Ventures, 500 Startups, Gmail creator and FriendFeed cofounder Paul Buchheit, Google’s Principal Engineer Matt Cutts, and the Start Fund.

Y Combinator-backed drchrono simplifies the professional lives of doctors and medical professionals by bringing electronic health records and much more to the iPad. The free iPad app allows doctors to schedule patient appointments, dictate notes via audio, take pictures, write prescriptions and send them to pharmacies, enable reminders, take clinical notes, access lab results, and input electronic health records.

The electronic medical records element is key because the Obama administration is currently offering strong incentives for doctors to start moving their health records online. Drchrono will help doctors start, finish and manage this process.

And drchrono is more than just a simple iPad app. Doctors can upgrade to more storage for records, and complete medical billing. The billing component is another win for doctors, who spend hundreds of dollars each month for medical billing processing. Drchrono’s system integrates with all U.S. insurance companies, even the insurance agents that only use paper billing.

Since launching in February, drchrono has accumulated a physician user base of over 5000 users. Co-founder Daniel Kivatinos says that this growth has been purely organic, and that doctors have simple found the app in the App Store.

There’s no doubt that drchrono is entering the online medical space in an interesting time. As medical records move online, doctors are increasingly bringing laptops into the exam room to take notes, write prescriptions and more. But laptops can be cumbersome, and the iPad has emerged as a popular device for medical professionals.

But not every initiative to bring medical records online has worked. For example, Google recently shuttered its online health platform Google Health. Kivatinos says that he believes that Google Health didn’t bring much innovation to the space beyond aggregation of information. Because drchrono includes distinct features like speech to text audio dictation functionality and integrations with insurance companies, the app provides value to doctors.

I have several medical professionals in my family and I can attest to the fact that paper records are in the past. At the very least, drchrono gives doctors an online repository for all of the information, like notes, prescriptions, dictations, images and other data. But I believe we are going to see more and more doctors turning to the iPad and other tablet devices for use in the exam room and operating room. Drchrono is in a great position if both of these trends scale significantly in the next few years.

MemSQL may not have the sexiest name or, as a database management software startup, live in the sexiest industry, but that doesn’t mean it isn’t appealing to investors. The Y Combinator Winter 2011 grad is announcing today that it has raised $2.1 million in seed funding, led by an impressive list of angels and VCs. The stalwart list includes venture backing from First Rounds Capital, New Enterprise Associates, Start Fund, SV Angel, and Y Combinator — as well as participation from celeb tech investor Ashton Kutcher, early Google employee and FriendFeed Co-founder Paul Bucheit, Loopt Founder Sam Altman, Guy Oseary, and several others.

MemSQL will be using this infusion of capital to complete its move into new offices in downtown San Francisco as well as adding to its current team of six.

But just what is it about this young startup that has investors fired up? MemSQL is a scalable in-memory database that, according to co-founder and CEO Eric Frenkiel, is up to 30-times faster than relational databases on disk. The database primarily focuses on online transaction processing (OLTP) workloads, and aims to deliver speed and through-put advantages, while retaining SQL and ACID compliance without resorting to NoSQL or caching technologies.

While online transaction processing software may be unknown to some, it helps manage transaction-oriented applications in data entry and retrieval, work that is integral to a number of industries, including banking, airlines, supermarkets, and manufacturers. As such, it’s a space that is poised to grow from $20 billion to $60 billion in value over the next five years, Frenkiel said. This is largely due to the fact that the size of data sets being employed by major web companies is doubling every 18 months.

Today, memory is cheap and abundant, and these large data sets can finally fit into memory systems. So, while input/output remains sluggish in the cloud, so companies that want to optimize their data sets and achieve performance in the cloud is to go into memory. Google, Facebook, Twitter, Zynga, and more, already have their datasets living in memory and backed-up on disk.

MemSQL has built a database from the ground up to allow applications to read and write at the same time, run analytics in realtime — all in an effort to provide a faster alternative to MySQL on disk — 30 times faster, according to the team. Plus, MemSQL’s software “speaks MySQL protocol”, so, according to Frenkiel, that means that there is no need for a code change for applications that talk to MySQL databases.

“If you want to achieve real performance in the cloud, you need to take the database into memory, and all the better if you can use SQL to access it”, Frenkiel says.

It’s also likely that MemSQL won over investors based on the credentials of its team, counting former Facebook, Oracle, and SQL server engineers among its ranks. It also helps that Frenkiel’s co-founder, Nikita Shamgunov, spent 6 years as a senior database engineer at Microsoft, holds a masters and PhD in computer science, has several patents to his name, and is a world medalist in computing machinery contests.

Not to mention, MemSQL’s first customer is fellow Y Combinator Winter 2011 alum, LikeALittle, which hit 20 million pageviews within 6 weeks of its launch and raised a round of seed funding from an equally impressive list of investors (several of whom also invested in MemSQL). LikeALittle has since raised another $5 million from Andreessen-Horowitz, among others.

Seeing as LikeALittle is already being valued at $35 million, the fact that MemSQL is providing much of the technology that has allowed its fellow startup to scale and perform well in spite of a huge influx of traffic (and resulting data), the $2.1 million investment seems a sound one, to say the least.

To get invitations to MemSQL’s private beta, visit their homepage here. And they’re also hiring, so for developers looking for a startup with a hacker-centric culture (and former Facebook talent), click here.