Viewpoint follows role: 2013 in review
I left Acquia in the capable hands of its current management team last December after I had the fortunate experience to be tightly connected to TechStars during the Fall 2012 class. That involvement made me wonder whether there might be a business opportunity in building an accelerator for companies using Drupal as a technology platform, and I left Acquia to follow that idea. Fortunately for me, the TS Boston Managing Directors, Katie Rae & Reed Sturtevant, let me sit closely "inside the tent" (their excellent term) that fall to dig deep.
In the end, I decided not build a Drupal accelerator. But, the process of working with that class reinforced in me that I really enjoy the early stages of building a company. So I spent this year actively trying to "pay it forward", and meet with as many startups as asked to meet me. I'm sure I've met with many dozens - maybe over 100 - in the last 15 months.
Just to give you an idea what I mean, here's a couple of the companies I helped, and what we worked on:
- Skillbridge. CEO, Raj Jeyakumar. Skillbridge is an online marketplace for users to post, find and execute short-term finance, strategy and marketing projects at revolutionary low price points. I met weekly with the leadership team of this MassChallenge Finalist on how to understand what an inbound marketing & sales looks like, and how much of this they need to build, when, in order to discover if this was the best way for them to acquire their business customers.
- Mootus. CEO: Adam Ziegler. Mootus helps law students and lawyers at all levels build reputation and knowledge through competitive, collaborative legal argument. Like Skillbridge, I met weekly with Adam and Jeff to work on positioning, messaging, market validation, and pitch prep for MassChallenge judging.
- FetchNotes. CEO, Alex Schiff. FetchNotes lets you organize your notes how you want, share them effortlessly and collaborate instantly. I worked closely with Alex to create a way to model & analyze his adoption metrics in a way that tells him about the health of his business - not mere ungrounded data.
- Silverside Detectors. CEO, Andrew Inglis. Silverside develops radiation detectors that reduce the global threat of nuclear terrorism. This sounds like it might be way outside my expertise - and from a product perspective, it is. But I've had some experience selling to, and have connections with people inside & outside the US Gov't that have, and will be useful to the company. In fact, I might be the only mentor in the Boston ecosystem who happened to have the perfect connection to a former official in the Department of Homeland Security that will be a significant help to the company, and I'm thrilled to have connected them.
I don't want to diminish the difficulty of building in early stage; but what I've discovered this year is that - having spent the bulk of my career in small tech companies - I often see challenges in startups that I've seen multiple times before. I see what to me look like simple, possible solution paths that can help first-time founders. The scars I received learning the hard way can occasionally help make difficult things much easier for founders.
I've helped companies learn interviewing, and team-management skills, make decisions on product & business models, and - I think most usefully - about how to turn their collection of activities into a coordinated business. I hope my personal reputation becomes well-known for jumping in and helping - in situations where I'm qualified to do so - without first thinking about what's in it for me.
But, I do want something to be in it for me in the long run. So I've chosen to not start another tech company directly, but become an investor in tech startups. Instead of describing why I invested in each one individually, let me give the general rule: I invested in each because:
- The leadership is fabulous.
- There is a right-sized market opportunity for the business to address.
- The team can build the product required to win.
- I see a path to revenue, and company value.
- The economics of the deal make sense to me (e.g. price, potential return). Note that unlike a large-fund VC, I look at the deal economics slightly differently - e.g. a company that might be acquired for $40 million after $4 million of total investment would be a great return for an angel like me, but doesn't move the needle for a fund.
Here's the list of everybody I invested in this year, in date order. I will freely admit that I don't write big checks; what I lack in investment size I try to make up for by putting my time to work for the companies.
- CarePort Health. CEO: Lissy Hu. CarePort enables hospitals to identify and connect with high quality post-acute care providers
- Fashion Project. CEO: Anna Palmer. Fashion Project turns purchases of resale designer goods big cash for charities.
- Fancred. CEO: Hossein Kash Razzaghi. Fancred is the worlds fastest growing sports social network.
- Synack. CEO: Jay Kaplan. Synack supplies a secure platform that enables real-life security researchers to test systems for security vulnerabilities.
- HelmetHub. CEO: Chris Mills. HelmetHub builds a smart vending system for bikeshare programs to deploy in order to to dispense rental (or for-purchase) helmets at the bicycle point-of-rental.
- CheckIO. CEO: Liza Avramenko. An interactive and educational game and competition platform for software developers.
- Rifiniti. CEO: Michael Gresty. Rifiniti provides data to workplace managers on office space utilization.
- Zagster. CEO: Timothy Ericson. Zagster provides a complete managed solution to customers that want to deploy a private, or public bike-share program.
- OwnCloud. CEO: Markus Rex. OwnCloud provides an open source solution to corporate IT managers for file sync and share.
In addition, I've officially become an investor / member in Common Angels and Walnut Ventures, which both see companies that are a bit later-stage than the ones I listed above, which also helps me learn to be a better investor. I've also invested directly in the TechStars fund for the upcoming Boston classes, and have committed to invest in a seed fund that is not yet public with its announcement.
All this activity has definitely given me a new perspective on "investing in the team." When I raised capital in all my companies, investors always said "The team is the most important thing." I don't think I really understood what they were saying then as well as I do now. Having met with all these companies has given me a new, improved insight into evaluating teams. I'm not sure I know how to describe my insight yet. Describing strong founders is still a lot for me akin to how the US Supreme Court tried to define pornography: I'm not sure how to define good founders, but I (increasingly) know them when I see them.
I feel quite good about this list of companies & founders. These are companies and funds that I believe will succeed, and that are also ones to whom I can add some value. I've got several more investment candidates my deal flow pipeline (which is feeling nicely developed after my first year of doing this). My plan is to continue to invest at roughly one company per month. I may stop & assess how things are going once I reach 18-20 investments.
Experience should always inform future behavior, and I have two New Year's Resolutions I want to hold to in 2014:
- I resolve to actively find things to do to make our Boston tech startup community culture better. Helping Dmitri Gunn with Lunch Beat Boston in 2013 was great; I resolve to build on that this year & find new things to add.
- I resolve to ask more questions when startups ask me for help, and to admit when I don’t have good advice. It’s all too easy to spout the most obvious thing when asked for advice. That first answer, though, may not be the right one for a situation, and I resolve to dig more before saying something, or simply admit I don’t have an answer. I hope others like me will consider adopting this approach, too.