Brad Feld and Shawn Broderick visited us on 09/16 Wednesday, at 6.078 Founder's Journey. Brad gave us a brief autobiographical sketch which had refreshing content - he talked also about the companies he founded, that did not succeed. Here are some highlights from his talk:
Brad is a MIT alum. who decided on Course 15 (management) pretty early. He founded his first company in 1983-84 when he, along with 4 classmates at MIT, decided to write software for Macs. They managed to raise $10,000, bought a Lisa and got a consulting contract for a company that did speech recognition. The contract was worth ~$10,000. The team spent a year on the project without making much progress. When they realized this, they shut the company down, sold the computer for $7000, and returned $7000 to their investors. This was company #0.
Through college, Brad continued to consult on the side and undertook projects such as writing software for a dentist who happened to be his fraternity brother's stepfather for $25/hour. When he was approached to write imaging software for Cephalographic analysis, he hired a fraternity brother to work for him for the summer, raised money from another friend's FIL and was in business! This was company #1.
In Spring of 1987, Brad took a business plan class and ended up writing the business plan for "Feld Technologies". Feld Technologies created semi-custom software for networked PCs. In 1988, Shawn joined Brad at this company, and they have known each other ever since. The company grew to over 20 people, was sold in 1993 and eventually became a public company. Brad worked for the acquiring company for 18 months, the first 9 running the consulting group that was built around the acquisition of Feld Technologies, then as CTO of the overall company. He eventually got bored as CTO, and realized that he wasn’t really doing that much that was substantive or important to the future of the company. At this point, he decided to move on.
In 1994, he became an angel investor. Raj Bhargava, then a student at MIT Sloan, approached him after his talk there, invited him out to lunch and impressed him with his idea. Raj showed Brad the world wide web in its avatar, back then. Brad ended up investing $25,000 for 10% of the company. The company was NetGenesis, and eventually went public in 1999. Brad went on to found 4 more companies with Raj. The rest is history.
TechStars was pitched to Brad by David Cohen, an entrepreneur who had sold a his company in Boulder, CO a couple of years ago. Both of them shared a common passion - they wanted to help companies at the pre-seed stage and go beyond the traditional angel investor role by mentoring these pre-seed start-ups. Together, they reached out to the community and got a great response. The first class graduated in 2007 and 3 of the companies have been acquired since. These acquisitions more than paid for the cost of the program. Of the 10 companies from the class of 2008, 7 companies became self-funded or raised money. In 2009, TechStars decided to launch the Boston program in addition to the Colorado program with Shawn as its head. Techstars Boston graduated its first class last week to rave reviews.
What would be awesome is to see a couple of teams from Founder's Journey graduate from TechStars class of 2010.
Wednesday, September 16, 2009
Wednesday, August 12, 2009
Robots
Robotics has evolved so much in the last decade. This link landed up in my in-box courtesy someone who knows I am a certified robot-nut.
Check out these robo pics in particular:
#23: What a terrific idea! No more anorexic, unrealistic "models"... these robots are way better!
#25: Gotta admit, creeps me out. Insect-robot hybrids with the head of an insect and body of a robot?!
#28: Honda and Asimo have done it again, w00t! Thought controlled robots? How incredibly awesome is that!
#33: Stunned to see this one! Looks like Eddie is a descendant of Kismet, one of my favorite robots sitting right here in my backyard at MIT. Kismet was Dr. Cynthia Breazeal's PhD thesis at the Media lab.
Kismet's ancestors are showcased @ the MIT museum. Very exciting to see generations of robots evolve.
It would be a dream come true to commercialize one of these robots, combining my twin passions of robots and entrepreneurship.
Check out these robo pics in particular:
#23: What a terrific idea! No more anorexic, unrealistic "models"... these robots are way better!
#25: Gotta admit, creeps me out. Insect-robot hybrids with the head of an insect and body of a robot?!
#28: Honda and Asimo have done it again, w00t! Thought controlled robots? How incredibly awesome is that!
#33: Stunned to see this one! Looks like Eddie is a descendant of Kismet, one of my favorite robots sitting right here in my backyard at MIT. Kismet was Dr. Cynthia Breazeal's PhD thesis at the Media lab.
Kismet's ancestors are showcased @ the MIT museum. Very exciting to see generations of robots evolve.
It would be a dream come true to commercialize one of these robots, combining my twin passions of robots and entrepreneurship.
Wednesday, June 10, 2009
Sources of seed funding
I am blogging from the MIT Enterprise Forum sponsored talk about raising seed funding at MIT. On the panel are representatives of Techstars, Spark capital, Google ventures and a angel/serial entrepreneur. About 10 minutes in, I heard something particularly interesting:
VCs are often hesitant to come in and invest in start-ups that have received angel funding already. They would rather be first investors. I did not understand why, I intend to find out.
Moderator asked what can inexperienced entrepreneurs do to get funded. Rich Miner said good ideas will be funded and to send email to miner@google.com. Shawn (techstars) pointed out that people in Boston are reticent as far as it comes to publicizing themselves as angels or people with good ideas and encouraged people to speak up.
Moderator asked generically, what can founders do to be successful raising a seed round? Shawn (techstars) says move the duck (idea) forward. Make progress. Spark rep. advises being ambitious and contacting highly placed people for advisors. Miner (Google ventures) says to be organized and focus on fund raising. Cold call people and ask for advice. David (angel) says to have a good elevator pitch that can be delivered in less than 2 minutes.
Twitter qn: What milestones need to be hit before looking for seed investment? Answer: depends on start-up. Need to agree with investor what that is for your start-up. An interesting response from David: if you are a new entrepreneur, take what you can get. Don't push for one form vs. another, take what you get. If you, the entrepreneur, are integral to the business, investors will give you equity in later rounds to keep you. If you are good at what you do, you will get compensated properly. Save the negotiations for the second start-up when the first has been successful.
Qn: if you are an angel looking to invest the first 25 to 50 K in a company, what should you look for? Answer was a vague look at the team and essentially, go with the gut.
Qn: among panelists, who invests in what industry sector and how capital intensive would they like their investments to be?
Spark: media, technology.
Techstars: extremely capital efficient businesses. B2B, consumer Internet, SaaS plays
VCs are often hesitant to come in and invest in start-ups that have received angel funding already. They would rather be first investors. I did not understand why, I intend to find out.
Moderator asked what can inexperienced entrepreneurs do to get funded. Rich Miner said good ideas will be funded and to send email to miner@google.com. Shawn (techstars) pointed out that people in Boston are reticent as far as it comes to publicizing themselves as angels or people with good ideas and encouraged people to speak up.
Moderator asked generically, what can founders do to be successful raising a seed round? Shawn (techstars) says move the duck (idea) forward. Make progress. Spark rep. advises being ambitious and contacting highly placed people for advisors. Miner (Google ventures) says to be organized and focus on fund raising. Cold call people and ask for advice. David (angel) says to have a good elevator pitch that can be delivered in less than 2 minutes.
Twitter qn: What milestones need to be hit before looking for seed investment? Answer: depends on start-up. Need to agree with investor what that is for your start-up. An interesting response from David: if you are a new entrepreneur, take what you can get. Don't push for one form vs. another, take what you get. If you, the entrepreneur, are integral to the business, investors will give you equity in later rounds to keep you. If you are good at what you do, you will get compensated properly. Save the negotiations for the second start-up when the first has been successful.
Qn: if you are an angel looking to invest the first 25 to 50 K in a company, what should you look for? Answer was a vague look at the team and essentially, go with the gut.
Qn: among panelists, who invests in what industry sector and how capital intensive would they like their investments to be?
Spark: media, technology.
Techstars: extremely capital efficient businesses. B2B, consumer Internet, SaaS plays
Sunday, June 7, 2009
The UPromise Story
Last week, I had the pleasure of speaking with Jeff Bussgang, co-founder, president and COO of Upromise. UPromise was acquired by Sallie Mae in 2006.
UPromise is a loyalty program where participating retailers deposit 1% of the end-consumers spending into a designated college savings account. The amount deposited can be used to pay off existing school loans or to pay for future loans. UPromise's business model was to reach out to students on college campuses, and encourage them to ask their parents to shop at participating retailers, thus saving/earning money for college. This allowed UPromise to drive business to retailers, and they were in turn paid by retailers for this.
Jeff started out by saying that when he and his co-founder Michael Bronner launched UPromise, it was around a very unique set of circumstances.
- Both he and Bronner were experienced entrepreneurs who had exited their previous ventures successfully.
- The company was launched in 2000, when the internet bubble was still intact.
- These two facts helped them raise $34 Million without having a single customer.
- Bronner had extensive contacts in the retail industry, which made it relatively very easy to get their foot in the door, and land the first few customers.
Their experience, branded VC backing, and Bronner's contacts earned them credibility with retailers and once the first few retailers signed up, it was an easier task approaching everyone else. He also mentioned a couple of other interesting points:
- When they approached retailers, they had a CMO with credibility, who had executed a similar strategy before.
- They approached retailers with a comprehensive marketing plan and a branding document.
- The typical time between first contact to contract with a retailer averaged 9 to 12 months.
I found it very interesting when Jeff commented that he was not sure he could found such a company in today's climate and be as successful. It goes to show entrepreneurship is as much about luck as it is about sweat and guts.
UPromise is a loyalty program where participating retailers deposit 1% of the end-consumers spending into a designated college savings account. The amount deposited can be used to pay off existing school loans or to pay for future loans. UPromise's business model was to reach out to students on college campuses, and encourage them to ask their parents to shop at participating retailers, thus saving/earning money for college. This allowed UPromise to drive business to retailers, and they were in turn paid by retailers for this.
Jeff started out by saying that when he and his co-founder Michael Bronner launched UPromise, it was around a very unique set of circumstances.
- Both he and Bronner were experienced entrepreneurs who had exited their previous ventures successfully.
- The company was launched in 2000, when the internet bubble was still intact.
- These two facts helped them raise $34 Million without having a single customer.
- Bronner had extensive contacts in the retail industry, which made it relatively very easy to get their foot in the door, and land the first few customers.
Their experience, branded VC backing, and Bronner's contacts earned them credibility with retailers and once the first few retailers signed up, it was an easier task approaching everyone else. He also mentioned a couple of other interesting points:
- When they approached retailers, they had a CMO with credibility, who had executed a similar strategy before.
- They approached retailers with a comprehensive marketing plan and a branding document.
- The typical time between first contact to contract with a retailer averaged 9 to 12 months.
I found it very interesting when Jeff commented that he was not sure he could found such a company in today's climate and be as successful. It goes to show entrepreneurship is as much about luck as it is about sweat and guts.
Saturday, May 16, 2009
Dr. Paul Jacobs, CEO of Qualcomm at MIT
After about 6 months of planning, 5 hours of meetings and 200 emails later, I had the pleasure of hosting Dr. Paul Jacobs, the CEO of Qualcomm on behalf of the Mobile, Media and Internet Technology (MoMIT) club at MIT. The talk titled "The future of wireless" was held at the Bartos theater in the MIT media lab and was very well received. Dr. Jacobs was incredibly down-to-earth and I had the pleasure of spending some time with him and his colleagues immediately before and after the talk. Here are the slides from the talk. I will upload the audio track when I get the green signal from Qualcomm's PR department.
Can't wait for Gobi to get here already! Mirasol and Kayak sounded pretty cool too.. look at the slides if you don't know what Gobi, Mirasol and Kayak are!
Can't wait for Gobi to get here already! Mirasol and Kayak sounded pretty cool too.. look at the slides if you don't know what Gobi, Mirasol and Kayak are!
Monday, April 27, 2009
Conversation with Paul Citron, Medtronic
I had the pleasure of speaking with Paul Citron who is the retired Vice President of Technology Policy and Academic Relations at Medtronic last week. I found some of Paul's comments about how to think about innovation and the innovation pipeline to be particularly insightful and relevant to our times. Though he made his comments with respect to innovation in medical devices, he made some terrific points that any innovator (and manager of innovators!) will do well to keep in mind.
Paul pointed out the importance of recognizing the mix of incremental vs. break-through innovations in a portfolio, and being mindful of how R&D dollars are effectively invested. He stressed the importance of recognizing that a larger R&D contribution does not necessarily mean that more dollars are going towards research, and that executives would do well to be aware of the actual contribution. A lot of the money is spent satisfying regulatory requirements and jumping through hoops instead of on research iteself.
He also pointed out how the lay person who is allowed to decide the fate of innovation (by being allowed to preempt FDA approvals and decisions per recently proposed bills in the congress) is often not best equipped to make the judgment. He felt strongly that the power to make such decisions must be removed from state courts and vested with the federal courts, where the people involved tend to be more sophisticated about these issues that affect science. He pointed to patent law as an example, and mentioned that there's a reason why patents can't be attacked/defended in state courts and must go only through the federal system.
Another excellent point Paul made: the scientists and researchers working on the breakthrough innovations we depend on for progress as a society are not fools - when company management/society consistently refuses to back their science in the name of minimizing risk and regulating them, they become progressively risk averse. This effectively stifles best-in-class, breakthrough innovation that we have come to rely on for progress.
In all, much food for thought for innovators, and manager of innovators.
Paul pointed out the importance of recognizing the mix of incremental vs. break-through innovations in a portfolio, and being mindful of how R&D dollars are effectively invested. He stressed the importance of recognizing that a larger R&D contribution does not necessarily mean that more dollars are going towards research, and that executives would do well to be aware of the actual contribution. A lot of the money is spent satisfying regulatory requirements and jumping through hoops instead of on research iteself.
He also pointed out how the lay person who is allowed to decide the fate of innovation (by being allowed to preempt FDA approvals and decisions per recently proposed bills in the congress) is often not best equipped to make the judgment. He felt strongly that the power to make such decisions must be removed from state courts and vested with the federal courts, where the people involved tend to be more sophisticated about these issues that affect science. He pointed to patent law as an example, and mentioned that there's a reason why patents can't be attacked/defended in state courts and must go only through the federal system.
Another excellent point Paul made: the scientists and researchers working on the breakthrough innovations we depend on for progress as a society are not fools - when company management/society consistently refuses to back their science in the name of minimizing risk and regulating them, they become progressively risk averse. This effectively stifles best-in-class, breakthrough innovation that we have come to rely on for progress.
In all, much food for thought for innovators, and manager of innovators.
Monday, April 13, 2009
My conversation with Dan O'Malley, CEO, PerkStreet Financial
Last week, I had the pleasure of having breakfast with Dan O'Malley, the CEO of PerkStreet Financial. He had a very fascinating story to tell as a first time entrepreneur who closed his first round of funding within 6 months of starting, and an uncommon passion and willingness to walk off the edge of a cliff in order to pursue his dreams. That really resonated with me.
Dan was a senior executive at Capital One before he launched PerkStreet last year. At Capital One, he successfully introduced the decoupled debit card. A decoupled debit-card is is so-called because the cards are issued by Capital One but they are linked to checking accounts held at other banks. When he then came up with the idea of offering a debit card with rewards, there was a conflict of interest within Capital One that prevented the idea from being pursued, even though he had the backing at the highest levels inside the organization. Something Dan said at this point put things I was pondering in perspective for me:
"Regret is a powerful emotion. I did not want to regret not taking the chance and watch someone else build my product".
That is the passion a founder must feel! When he said that, something cleared in my head and I knew the choices I had to make. An entrepreneur must feel that kind of burning need to act on his vision in order to have a chance of successfully navigating the challenging, arduous path to the finish line.
Dan also said something else that really stuck in my mind. I asked him about the highs and lows of his entrepreneurial journey so far. He offered a philosophical response - it's dangerous to be swept to the peaks of happiness or be overwhelmed by setbacks, because higher the peak and lower the trough, farther the fall to the bottom. The key is to maintain a somewhat neutral steady-state, that allows you to wake up each day and roll with the challenges the day brings.
How very true! Dan said this so much better than I ever could have, and the point really struck home.
It took me forever to learn this lesson, and I am still working on trying to maintain a steady-state at all times. Some times I am more successful than others, but I suspect it's a very important lesson for me to learn and master in my journey as an entrepreneur.
Dan was a senior executive at Capital One before he launched PerkStreet last year. At Capital One, he successfully introduced the decoupled debit card. A decoupled debit-card is is so-called because the cards are issued by Capital One but they are linked to checking accounts held at other banks. When he then came up with the idea of offering a debit card with rewards, there was a conflict of interest within Capital One that prevented the idea from being pursued, even though he had the backing at the highest levels inside the organization. Something Dan said at this point put things I was pondering in perspective for me:
"Regret is a powerful emotion. I did not want to regret not taking the chance and watch someone else build my product".
That is the passion a founder must feel! When he said that, something cleared in my head and I knew the choices I had to make. An entrepreneur must feel that kind of burning need to act on his vision in order to have a chance of successfully navigating the challenging, arduous path to the finish line.
Dan also said something else that really stuck in my mind. I asked him about the highs and lows of his entrepreneurial journey so far. He offered a philosophical response - it's dangerous to be swept to the peaks of happiness or be overwhelmed by setbacks, because higher the peak and lower the trough, farther the fall to the bottom. The key is to maintain a somewhat neutral steady-state, that allows you to wake up each day and roll with the challenges the day brings.
How very true! Dan said this so much better than I ever could have, and the point really struck home.
It took me forever to learn this lesson, and I am still working on trying to maintain a steady-state at all times. Some times I am more successful than others, but I suspect it's a very important lesson for me to learn and master in my journey as an entrepreneur.
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