Early stage startups present their companies under the scrutiny, guidance of VCs

By Dennis Clemente

Where startups in New York go by the numbers of introducing new products or services to a curious, relaxed audience, the startups that present at the Hatchery events face perhaps what no other meetups offer—the scrutiny of venture capitalists (VCs). In both cases last May 22 at Chadbourne & Parke, LLP, the audience saw how the pitching process works and how VCs give feedback to early stage startups.

With some having not much presence online being in the early stage of their business, the VCs dissected their business model, assessed their presentation skills, asked financial questions and most important, gave essential tips.

The presenters were Bespoke Social Media, Pretty In My Pocket, Sentometer, and Unbound. The VCs were Peg Jackson of Gridley & Co, Warren Haber of Exoventure, Josh Bruno of Bain Capital and Bill Reinisch of Paladin Capital.

Pretty In My Pocket (PRIMP) and Unbound are aimed at the female market—the former offers perks in primping, the latter gives you orgasm in a box.

PRIMP CEO and Founder Caroline vin Sickle said the idea came to her when she went to a popular pharmacy store and couldn’t open the beauty products. “We’ve all made lots of “oops” purchases over the years.”

Raising $1.5 million in funding, PRIMP is a mobile shopping solution for beauty products during in-store shopping experiences. With a quick mobile bar-code scan, its selection engine provides product look-ups, social recommendations, and location-based incentives.

“Our goal is to help women find the products they need at the most critical time—in the aisle. We help them choose products based on preferences and personal beauty needs,” she said of the $50 million beauty industry.

Raising $500,000 in capital, Unbound is looking at subscription and affiliate sales in what the three female founders think is going to be a $25 billion erotic products industry in the foreseeable future.

The founders call themselves Greer, “product goddess,” Sarah Jayne, “content czar,” and Katie, “minister of design” and one of them handed out a free box worth $60 to the only female VC in the panel, Peg who smiled mischievously as she accepted the gift.

What’s in the box? They contain “several tested and adored products, inspiring erotica, thoughtful guidance and extra swag.”

The other presenters were tame in comparison.

Bespoke Social Media Atelier is going the Pinterest route but with privacy in mind. “Ours is a tool for creatives to curate, organize and present content that is kept private or shared with small groups,” said Michele Spiezia, founder and CEO.

Bespoke has two main elements: the Inspiration Stream and Inspiration Books. Users can add their social media streams (Twitter, Facebook, Instagram, Tumblr) and any RSS feeds they follow to their Inspiration Stream for a real-time, visual flow of content. Content can then be saved to Inspiration Books, which users can share with friends or keep private.

Spiezia said Bespoke recently partnered with Evernote, but she is still seeking $750,000 in funding, as she also estimates profit to come in by 2014.

Sentometer, for its part, is a tool for measuring and monitoring conversations in the social media universe.

Founder Mike Kelly has set up appointments with ad agencies to offer his social media tool. He likes to think of it as “taking the pulse” of a topic and letting people know when it speeds up. “We have the social aspect in cruise control.”

Some of the feedback from VCs included these gems:
• It doesn’t mean you can start a company you should
• Biggest variable is not time, it’s the market
• If you are not #1 or #2 you will not be able to stay around. Figure out how you can be #1 in the market. No one wants #3
• Credibility (when first presenting) is very important
• Have a backup Powerpoint slide (if you need to show more)
• Make sure you understand your market

Organized by Yao-Hui Huang, the Hatchery helps build communities of entrepreneurs and investors.

What makes a great leader? Try asking your team how you could fail

By Dennis Clemente

Being your company’s intrapreneur or leader, you have to ask your team, “Tell me all the things that could go wrong?!” 

As a leader, do you think you can ask your team this question–“Tell me all the things that could go wrong?”–and expect to get real answers? That startling question is from the best-seller, “Decisive,” by Chip and Dan Heath, and it’s the same question asked at the NY Intrapreneur meetup on the Upper East Side last May 14.

So many tech meetups these days are all about pitching, showcasing us great works that come from creating products that promise to make all our lives easier.

In this meetup founded by Debbie Madden, also a CEO at Cyrus Innovation, the panel of guests from Coach, Ogilvy & Mather, Simon & Schuster and Kaplan Test Prep showed how they are willing to be candid.

They talked about work and the disruptions, ugly or not, that occur in collaborations, in how we organize ourselves, motivate one another and combine talents to meet challenges. So where other events shun sensitive questions, this meetup was open, incisive, and even conspiratorial, with all the biases we have as baggage.

For example, it may be surprising to hear people admit to having “self-interests,” but here is one example. “I want to work with the same team. That’s the fight I will fight,” said the reflective Ken Judy, VP Technology of Simon & Schuster Digital.

NY Intrapreneur's panel of speakers
NY Intrapreneur’s panel of speakers

There’s a certain grain of truth in that statement. Indeed, working with the same team who trust its leader as much as its members has some advantages—it saves time and effort, because Judy declared, “No one gives trust; it could take a year or more,” as he emphasized the gravity of what we face in any new project: distrust.

Judy was at one time executive manager and software developer who managed development and product at Oxygen Media (NBC-Universal), and was a product manager and agile coach at NYSE Euronext Advanced Trading Solutions.

As the moderator, Madden set the analytical tone of the meetup with questions that allowed the leaders to discuss their role as their company’s intrapreneur.

For entrepreneurial ideas to take off, Ilio Krumins-Beens, executive director, Agile Practices at Kaplan Test Prep said it’s important for the disconnected software and business team to connect, if it means changing processes. I spend time using agile technology with key influencers.”

Krumins-Beens has been working with teams to deliver software and web applications for over 15 years in a range of industries–government, media, tech startup, and education. He is a passionate agilist who has presented at several Agile/Lean conferences since 2007.

For the two women in the panel, time is key.

For Kathleen Gareiss, managing director of Digital Delivery at Ogilvy & Mather, having a timeline (to follow) is crucial, because “ideation can take long.”

Danielle Schmelkin, VP-Business Intelligence and Data Management at Coach, agreed. “Time is always a factor,” elaborating on how meeting deadlines is always a challenge. She is a proponent of “passion (being) one ingredient and relationship is another” to entrepreneurial success.

Gareiss is a digital native with more than 15 years of experience working in the interactive industry. The focus of her interactive career has been on producing new, large-scale platforms and global implementations. She works within a company to standardize and “operationalize” the processes needed to deliver these digital experiences.

“The outcome of the day is important for me,” Gareiss declared.

Schmelkin, for her part, is responsible for all of the technologies associated with transforming data into critical business information. Prior to joining Coach, Shemlkin held key positions at Barnes & Noble, Inc., where she was most recently VP of Business Intelligence, responsible for creating and implementing a business intelligence platform for the entire enterprise. She was also CTO during the launch of the nook, Barnes & Noble’s digital reading platform.

“We should always work toward a goal,” Schmelkin said. “Guide the company where they can go or not. (But know) there are concepts they will not be ready for.”

Answering that, Judy said, “You have to throw (some) ideas away. Not all ideas can be (executed).”

As a parting shot, each one offered their set of beliefs about what someone just starting can bring to the company they work for.

Gareiss answered first, saying good “writing” tops her list, as well as “being a sponge all the time.” Shemelkin thinks demonstrated “leadership and communication skills” are vital.

Krumins-Beens, for his part, said it’s important to “trust your idea and to not let anyone dissuade you when you get a ‘no.’ You don’t want a string of jobs. You want a career.”

Judy said with a crack in his voice, “Don’t take too much for yourself, though. Routinely collaborate. Work hard with humility.”

The meetup was organized by Madden, who founded NY Intrapreneur in 2012 to enable rich conversations about innovation within the NYC tech community. She is also speaks and writes on enterprise and startup trends.

Fitbark app for dogs: Woof of things to come

Wearable tech for dogs
Wearable tech for dogs

By Dennis Clemente

At the “TiE New York: Fostering Entrepreneurship Globally” meetup last May 8 in midtown Park Avenue, Fitbark launched a tiny wearable contraption that helps owners monitor the activity of their dogs, with the resulting data captured, stored and viewable on any iOS devices. It’s an app for dogs briefly mentioned in the previous post, so to provide more detail, here is Michael Chiang, “Woof Interpeter,” giving us more than a whiff or, woof, of things to come.

How did you guys come up with the idea?
We started FitBark about a year ago as a fun project to check up on our dog Freud and my Dad, if he was really walking him. We looked around to see if anything existed that gave us a real-time view into Freud’s safety, health and happiness and didn’t find a compelling product for dog owners to stay connected with their dogs.

So when we designed FitBark, our goal was to feel connected with our pets at all times, rather than attempt to reconnect with them only after they get lost. This is why we designed FitBark’s experience to be seamless (no manual inputs required), dynamic and that has use throughout the day. We love to be able to check on our dogs and get insights into their life as much as we like – even if we’re out of town!

How did you get funded?
We have been bootstrapping, but will start looking for outside funding soon.
We are also in the midst of a Kickstarter campaign where new customers are pre-ordering the product by the day. Here’s a link to our Kickstarter page -> fitbark.com/kickstarter

What makes your product stand out?
FitBark is being built from the ground up to cater to the needs of dog owners and other caretakers. With this laser focus, our goal is to contribute to a great pet parenting experience, which begins with keeping in touch with our dogs, and getting insights about how they feel by looking at their energy levels. We live by the saying that “a healthy dog is a happy dog”.

Who are your competitors?
No direct competitors. Among the GPS collar manufacturers, TAGG has recently added physical activity tracking. We also view the GPS collars as a complementary market. Here’s the blurb from its Kickstarter page:

Why don’t you have a GPS on it?
We familiarized ourselves with a number of GPS products, and we found that they were too bulky and heavy for our dogs. It would have also greatly reduced battery life.

See how Fitbark works. Visit http://www.fitbark.com/

Wearable tech for your dog, the ‘march of penguins’ to help you raise capital

By Dennis Clemente

What do dogs and penguins have in common? They were the topic of two presenters at the “TiE New York: Fostering Entrepreneurship Globally” meetup last May 8 at the Loeb & Loeb in midtown Park Avenue. The two presenters were Fitbark for dogs and DreamIt Ventures’ Arie Abecassis who explained why you need the concept of the march of penguins to raise capital for your startup.

Fitbark launched what it billed dog parenting 2:0, a tiny wearable contraption that helps owners monitor the activity of their dogs, with the resulting data captured, stored and viewable on any iOS devices. It claims to give real-time insights about their pet’s activity and energy level. Pre-orders are now available.

From that presentation, the meetup sequed into how to raise capital for your business idea—and yes, it does have something to do with the march of penguins.

“It’ s a world of lots of ‘maybes’ and few ‘no’s’. So the trick is how to get the ‘maybes’ to say ‘yes,’”” Abecassis said. “You wait for the first penguin to jump into the water. Once that happens, the rest (of them) just jumps in.”

“It’s a similar phenomenon with investors. When investors perceive their risks are mitigated, they’ll jump right in,” he added.

Attendees at TiE meetup
Attendees at TiE meetup

Abecassis acknowledged what everyone knows to be true. “It’s not about what you know but who you know. It definitely helps to get to the right people, but it’s important that the relationship builds up. If you’re planning to raise money next month, it’s too late to pitch to VCs.

“Build the relationship by sharing your progress. And as you progress and update them, you will notice the conversation changing, especially when they see you’re comfortable in the positioning of your product. They’ll see how you are demonstrating the job you are supposed to do.”

“It’s especially important to tell them (VCs) why they’re a fit, why it’s a good opportunity for them and why they can help,” he said.

For him, making a connection with a VC is about connecting the dots. He almost singled out LinkedIn but later in his talk, he mentioned other social networks and for those running in the same circles, he said find out if you went to the same school.

On crowdfunding, he said it is “probably the single most exciting development in the world of entrepreneurship right now, because it holds so much potential to unleash millions of dollars or capital into the startup space.”

It was refreshing to hear him acknowledge how Kickstarter and Indiegogo have a strong foothold in this regard without mentioning his company, AppStori, which does the same in principle but only skewed to apps.

These platforms are being developed to open investor opportunities. “In 2014, the average American household may not need to meet stringent criteria to invest in a startup. That’s going to open up a ton of capital,” he said.

“This could raise the bar for VCs, but all good for the entrepreneur,” he added.

When it comes to raising capital from VCs, addressing those non-binding term sheets are crucial, as it establishes the valuation and terms of an investment and basically reflects the economics and control for capital and guidance.

“For those just starting their business, the good news is that VCs have become entrepreneur-friendly and less aggressive on some terms,” he said. “Besides, there are other ways for companies to assign value to itself.”

He advised the startup, though, that it’s not always about going for the highest bidder. “Value what investors are bringing to the table.”

Abecassis also talked about the aspect of governance in a startup, which covers board size, its composition, protective provisions and the roles of directors and observers, even the role of an independent, to the business. Governance should improve investor returns, he said.

How does one make use of the raised capital? Abecassis suggested the following: build product or service; build sales; expand marketing channels and take care of operations like legal and accounting work.

“You have the ability to use the Internet as your infrastructure,” he said. He doesn’t need to tell us what should follow next is customer acquisition.

WeHostels, Tracks report increased app downloads, Uber NYC shorter wait

By Dennis Clemente

The Queens Tech Meetup on Hunters’ Point Plaza in Long Island City may just have the most scenic view of Manhattan’s skyscrapers in Queens. It’s already unique for being out of Silicon Alley’s neighborhood, but if you think about it, the venue fits tech startup founders. It’s nestled on a rooftop like how startup companies featured here must feel with more downloads to their respective apps.

The guests at the 7th meetup of this group last May 2 soaked in the sun longer than usual as they admired the view. Later, as the people trickled into the main hall for the product demonstrations, the admiration would be lavished on the three companies –WeHostels, Uber NYC and Tacks, for making it to the top.

Brett Martin, co-founder and CEO of Sonar, kicked off the night by sharing some sobering startup stories: He said “you won’t get the best people right away,” but you still have to pursue your dream.

His company, Sonar, is a mobile app that tells you when your friends and friends’ friends’ are nearby. It leverages social and location data from networks like Twitter, Facebook, Foursquare and LinkedIn.

Wehostels report 50 bookings a day.
Wehostels report 50 bookings a day.

The demonstrations started with WeHostels’ Diego Saenz Gil, the hard-working Argentinian who moved to Barcelona and moved to the U.S. with an app that aims to make it easy to find and book value accommodations around the world while also connecting other travelers using the mobile device.

WeHostels started as a Web site, but when Saenz Gil realized the 411 percent growth in search mobile, he went full app on iOS (Android to follow) and linked it with Facebook. “We’ve had 120,000 downloads of our app so far and 50 total bookings a day,” he said.

Hostels are popular among young people who don’t mind sharing rooms with other strangers. This, he said, “is a $136 billion market.”

When they did the app, Saenz Gil said they only focused on three things: beautiful design, social integration and easy booking functionality. He made the booking functionality easy by doing his research on-site, asking people in hostels.

The next demonstration came from Ed Casabian, senior community manager of Uber NYC, the company that has been in the news lately. It will be recalled that the New York City’s Taxi and Limousine Commission (TLC) initially banned Uber from Gotham’s taxicabs last year. But TLC has green-lighted the cab-hailing app.

In Uber’s world, you don’t have to carry cash or pay the driver, as this will be deducted from the credit card you signed up with when you downloaded the app. You tap a few keys, the cab closest to you comes to you.

Regarding the concern about the wait, Casabian said it’s now down to “4 minutes from 15 minutes last year.”

Uber is now in 10 countries, including London, Paris and Singapore. “All drivers (in New York) are vetted,” he added.

The last presenter, Tracks, showed its mobile social storytelling app. Designed for friends and the entire family to enjoy, the app collects your photos and turns them into visual stories automatically using Facebook and your phone’s camera roll. Tracks are also auto-published on a web application for viewing and sharing.

Tracks reported 2 million downloads for the app, so far.

Also in attendance was Senator Michael Gianaris who spoke about Queens and the planned $133-million infused funding for building the Cornell NY Tech on Roosevelt Island. Marissa Shorenstein, president of AT&T New York, lauded the Queens Tech Meetup and reiterated the continued sponsorship of its events.

How to get noticed in a marketplace overflowing with apps

By Dennis Clemente

How many apps do you have on your smartphone? How many do you actually use? In a 2010 study by Localytics, 26% of apps downloaded were just used once. The problem persists to this day with nearly 7 billion mobile apps downloaded, but with one in four apps never used again. Consider that Apple has nearly 800,000 apps—and growing; we haven’t even mentioned the fact that most of them are free, not counting other apps made for Android and other devices. How do you get people to notice your app?

Still, app developers have a reason to be optimistic, when sales of apps, in-app purchases and subscriptions across smartphones and pads combined are projected to hit $36.7 billion by 2015, according to Canalys. Total of apps now is 1.7 million.

The potential to earn from apps is there as long as consumers can find you. For advertising, that’s a creative challenge. For a news hound, that’s a story. For a startup, that’s a daunting one that requires entrepreneurs of the app kind to come together.

Last April 30 at the Alley NYC, they gathered together to find out “How to get noticed in a marketplace overflowing with apps.” Jake Ward, executive director of the Application Developers Alliance, served as moderator, with guest speakers Arie Abecassis, co-founder of AppStori; Mark Ghermezian, CEO of Appboy; Louis Simeonidis, CMO of Applico; Michael Ludden, senior technical marketing manager at Samsung Developers; and Glen Nigel Straub, director of Global Monetization Solutions at Millennial Media.

Guest speakers at Alley NYC
Guest speakers at Alley NYC
Abecassis led the panel of speakers—and rightfully so, as his company AppStori serves a higher calling for the rest of us who may want to have our own app but can’t afford to do so. It’s kickstarter.com for apps, a crowdsourcing and funding platform that connects mobile app consumers with developers.

Abecassis talked about the importance of lead-generation marketing your mobile apps, from concept to completion. He cited the importance of relationships with bloggers and app review sites as well as cross promotions. He suggested appflood.com, the only 100% transparent and 100% commission-free platform for trading app installs. “Favorable reviews can create appvocates.”

If one has an advertising budget in place, he suggested pay per click mobile advertising, which can increase an app visibility and rate of conversion. Constantly tracking and analyzing your success or progress is also highly recommended.

“Don’t fall in love with your idea too much. Test as many tools as possible to see which tools yield the most downloads and usage for your apps,” he said.

Beyond marketing, it was also discussed how improving the experience for users may help promote apps more effectively. Would it, for example, be a good idea to try an app before downloading it? Should there be a better curation of all the apps?

And how much does it cost to succeed in this business?

It’s a question that proved to be the hardest to answer. For Ghermezian, it’s about choosing the right team, which everyone at the panel agreed. But everyone was also in agreement that you just can’t get the best team right away, so it’s essential that you launch an app project, even with all its imperfections.

Ghermezian was emphatic about just having your app out there instead of constantly tweaking one’s app.

Straub said creating apps for Microsoft and Blackberry, being new to the marketplace, could pay off. Ludden mentioned developing for Samsung, while Simeonidis said Facebook is another option.

“More than the cost, it’s the sweat equity you put in,” added Straub whose mobile ad company Millennial Media identifies the best ad types, features and actions that most effectively engage consumers.

The event was organized by the Applications Developers Alliance Emerging Technology & Research Working Group. Visit devsbuild.it for resources to grow and analyze your business.