Great talk last week at EmergeMemphis with Rey Flemings, the Founder of Stipple which is cool thriving early stage company based in San Francisco. Rey was back in Memphis and gave a inspiring overview on "What it takes to secure Angel and VC funding". Having secured angels like Naval Ravikant, Rick Marini, Eghosa Omoigui, Mike Maples, and Justin Timberlake, as well as VCs with Kleiner Perkins and Nest-TN, he speaks from experience. His story on the funding process is one that he refers to as 'gaining social proof' which is all about gaining momentum. Another way to look at it is the 'country club' approach. Knowing who else is in 'the social tree', if they are the right folks, can really help validate and lock up funds pretty quickly, esp in Silicon Valley. Certain angels are the right catalysts and influencers for getting into a hot deal and that is exactly what Rey conveyed in his talk and was how his process evolved.
He also touched on what has to be the compelling argument for investing. Of 3 core areas in team, product, and market....the market is the most important component. A startup can have a rock solid team and a great product, but if the market isnt ready or accepting of what they are offering, the company will not be successful. Ive seen all sides of the equation here....and it is especially upsetting when the market is ready and ripe, but the team is off and the players are not the right ones. At least that can be fixed, but a market is harder to fix and out of your control.
Thx Rey and we will get you over again soon.
Some interesting stats from the NY Times on Sunday regarding those areas where the most job growth is likely to occur until 2018. 8 of the top 10 categories are health care or wellness related, 1 is in IT, and the other is in financial services. Here they are in order of projected demand:
--1)BioMedical Engineering--Designing and building innovative devices for artificial limbs/organs
--2)Network Systems and Data Communications Analyst--Backend implementers of an IT dept
--3)Home Health Aide--Assisting the elderly in homes/assisted-living facilities, esp medically.
--4)Personal and Home Care Aide--No medical emphasis, but more day to day needs of elderly.
--5)Financial Examiner--Accounting forensics/internal auditors/compliance examiners
--6)Medical Scientist--Focus on human disease and conditions, biotech, pharmaceutical cos, hospitals, and universities.
--7)Physican Assistant--Key member of the medical team. Not a Dr, but not a nurse.
--8)Skin Care Specialist--Treatment of face/body. 98% are women.
--9)Biochemist and Biophysicist--Study living organisms at the molecular level. DNA manipulation and how that can be used to treat disease and genetic disorders.
--10)Athletic Trainer--Work under a Dr's supervision. Not a personal trainer.
Check out the article that shows other data ie projected salaries and percentage growth.
Ever heard of Techstars or Y-Combinator in Boulder/Boston? SeedHatchery, a similar program, has been created here in Memphis! SeedHatchery The concept is a collaborative venture between Solidus (a vc firm out of Nashville) and EmergeMemphis. We are a very early, seed stage investment vehicle with a heavy mentorship driven program behind it. For $15,000 and a 10% equity play, an entrepreneur with a great idea (mainly technology driven, but all ideas are welcome) can apply to get the venture off the ground, incorporated, and into reality....if committed enough to the idea. The setup will be a 90 day cohort effort where there will be accountability events 2-3x a week to make sure that the idea is growing and being further developed.
There are a lot of entrepreneurs in this area that need a small funding jumpstart to help them get their ideas off the ground, so we feel like this plan will help find qualified others who have a strong desire to get something tangible actually launched. Behind SH, will be a group of 25-30 mentors who all have various backgrounds in a variety of areas, ie angel and vc investing, sales, financial and legal, pr, IT, etc. This should provide the necessary platform and firepower to assess whether any of those that apply has the potential to scale and grow. If an idea gets a user base and further customer attention, then as a next step.... an angel base will be attracted and ready to have more conversations about increased funding opportunities, if there is enough interest. This will help ensure additional continuity of a concept so that a better chance will be enabled for success.
The location venue will be at the Launchpad here at EM. Eric Mathews will be the lead hatcher and myself/Vic Gatto at EmergeMemphis/Solidus, resp will be providing additional resources to help with this compelling initiative. Applications are being accepted now and due by FEB 11th at SeedHatchery so APPLY!!
My high school, Memphis University School, honored David Sacks this week and EmergeMemphis was fortunate to grab him to get him to speak to our entrepreneurs. It was really great to see him again, as David has had a nice ride, so far....and I was glad he was able to tell his story to a few folks here in Memphis. The whole Paypal story is an amazing one, where David rose to COO, bf they unloaded to eBay for 1.5B. Hearing how Peter Thiel recruited him and all the other rockstars that Paypal subsequently 'incubated' ie Max Levchin of Slide, Reid Hoffman of Linked In, Jeremy Stoppelman of Yelp, Elon Musk are all worthwhile individual home run case studies worth reading about. Something genetic about Paypal has produced what every place strives for with' recycled entrepreneurship'.
Geni www.geni.com and yammer www.yammer.com are David's more recent exploits and im particularly interested in watching yammer, the private social network for enterprises which seems to be gaining a lot of momentum. He made some other remarks about the importance of relationships in silicon valley and how it is hard to tap into those without a referral, as that is how deals get both looked at initially and executed. Without that, it is hard to garner the attention of influencers and funders....unless you have a product that is so unique and differentiated with a high barrier to entry that everyone wants to be part of it. It is tough to argue with those points. Having a product go viral and generating/acquiring an exponential user base each month, are both models that he has tried to position his companies of replicating.
Kudos to Scott Brown of Marks Menus for asking if David would briefly hear his pitch. Maybe there is funding opportunity there!
We look forward to keeping up with David's progress and in hearing more great news come out of his early stage companies.
For all of those brave enough to start and expand your own high growth companies, let us know, as we would like to hear from you at EmergeMemphis. As a business/tech based incubator that physically houses 25-28 companies currently, we help entrepreneurs accelerate their companies to profitability and sustainability by mentoring and introducing 'qualified' opportunities to our network of catalysts who can help open doors in a variety of segments. Those segments are inclusive of assistance in sales development, funding/angel investing, financial/quickbooks, legal, HR,PR, IT....to name a few.
We hope that you will reach out to us and inquire more about our value and the impact that EmergeMemphis might have to your success!!
This is one of the best articles that Ive ever read on the makeup of a successful (or not) early stage CEO. ACEF/Angels Forum does a great job of recruiting Tom LeFevre, a co-founder of Intuit--to give his perspective on what to look for in a CEO and especially when making an angel investment. If you are an angel investor, id really grasp this interview as it is a good/brief study of self-awareness of what you will be getting from the leader of a company that you invest in. It gives all sorts of scenarios and ive personally witnessed several of these situations which sometimes it would have been better to walk instead of going through the pain of having to deal with a non-performing CEO on the front end. (and in being aware of their background bf hiring). I like the fact too that Tom doesnt give us a winning formula for a successful CEO and is honest in saying that there isnt one.....but that there are common themes of 'not' CEOs.
Check it out.
http://www.angelcapitaleducation.org/newsletter-detail/114-id.209715312.html
It seems that over the last 9 months or so, here in Memphis, there was been an insurgence of entreprenuers who have an idea that they would like to see get launched. I can name about 10-12 of these concepts that Ive heard about or talked to, where the point/founder is actually employed and they are doing this on the side. It is a real balancing act to make sure that you are separating the 2 roles and managing your time, so that 'the hobby' is actually making progress and growing. it can be a tough proposition as some of these side projects have been going on for 1-2 years, illustrating a slow, methodical growth that in most cases isnt sustainable. i understand that most folks start their own company while still employed with their other job, which is the most practical....and ideally if there is a way to get revenue, then that is the most logical scenario.
Take a look at Jason Cohens perspectives on this from his a smart bear blog. he has soome good points on the approach that might be helpful, esp on picking a business that can thrive within your constraints.
Congrats to Eric Mathews and everyone at LaunchMemphis for an excellent 48 Hr Launch weekend. This is the 3rd yr that the event has occured (originally was called Startup Weekend) which 'starred' about 65 folks who camped here to EmergeMemphis. For those that arent aware of the format, there were about 15 ideas that were presented to the entire group and the goal was to develop a team comprised of various skills ie developers, programmers, designers, marketers, legal, etc---with the end goal to come up with an outline of a actual working prototype. obviously this is all at a very concept stage, but maybe a few of these ideas will get launched into a company and at a worse case, get further explored to assess marketplace validation. this effort is an entrepreneurial grass roots movement to get as many like-minded people to come together to build a product or service that has the potential to be bought.
So the winning ideas that were developed were 1)Tippjar; 2)TourneyCaddy; 3)Thelistofbands; 4)Onesongconcerts; 5)Romantic Playbook; 6)One Day Pro; 7)MyRepresentative; and 8)ChronoComics!! The ideas ranged from heavy in the music space ie selling art/media on a pay as you can model in the form of tips--artists can explore the biggest tippers and reward them.......a directory of musicians/bands organized by city......1 song concerts that are streamed live then archived..... a platform for advertising golf tournaments where courses around the us list their events to recruit others to play in.... a web based tool to educate the public on who their local/state/federal politicians are based on zip code and what the issues are that they are supporting or not.....a virtual assistant that is for hire on a project basis.
Urls and more info to come, but the expectation is for the development of these ideas to turn into a company with revenues, and entrepreneurs who have the wherewithall to see the implementation will be mentored to help review all possibilities for growth.
Great weekend, great work everyone!
Check out the latest INC which is the annual Entrepreneurial Superstars edition of the fastest growing private companies in the US. One interesting stat that I noticed, as a result of their CEO survey of 250 execs, was the statistical mix of the leaders and their companies.
Of the companies that were profiled 1) 42.5 was the median employee count; 2) $9.9 million was the median 08 revenue; 3) 888.5% was the median growth rate.
Of the CEO's 1) 90% were male; 2) 10% were female; 3) 21% were minority
Age range: 1% < 25 yrs 27%--25-35 41%--36--45 22%--46--55 9% > 55 yrs
Marital Status 1) 80% married 2) 5% divorced 3) 15% single
Im not sure what exactly this means, but there are some trends of this group---everyone is in a high growth sector with thriving industries---most were male---68% were from the ages of 25--45 so this is a young person's game---majority were married which i guess brings forth greater stability and enhances that hunger factor bc there is someone else out there that matters/that you have to provide for.
Also in another edition, I wanted to point out a slide show that INC did on 6 ways to be a better CEO. They are: 1) Delegate More 2) Become a Better Judge of People 3) Communicate well with your Board 4) Get Better at picking winning Ideas 5)Develop a sense of Humor 6) Just Be more Patient http://www.inc.com/ss/6-ways-be-better-ceo#5 All are great instincts which have come from some solid leaders ie Twitter, Zappos, Y-Combinator, Enterprise Rent a Car, etc...