This weekend was the 2010 DreamIt Ventures Kickoff Event in Philadelphia. It was great to see 15 new startups in the Philadelphia area, buzzing with activity and ready to get started. The kickoff events were held at the soaring Comcast Center on the 45th floor, an exciting venue that helped amplify the energy.
Lots of folks from the Philadelphia startup community attended and there was a ton of good advice dolled out to the incoming companies. Two segments of the weekend, in particular, captured some good lessons for the 2010 DreamIt companies. I’ll recap these from my notes in two posts.
The first segment that I want to summarize was a panel session with three companies from the 2009 cohort: Jack Groetzinger from SeatGeek.com, DJ Stephan from Notehall.com, and myself for FanGamb. Clearly, having been on the panel, I’m a bit biased, but I felt there were a lot of good points made.
A summary of some of the important takeaways from the panel discussion:
- There’s more than one way to build a startup.
- SeatGeek launched at TechCrunch 50 and raised a good sized series A VC round.
- Notehall.com was featured on ABC’s SharkTank program in October and closed a moderate seed round.
- FanGamb closed a family & friends round in the fall to continue iterating the core game (something larger in the works that can’t yet be disclosed).
- The message: There are lots of different funding options. Find the one that works for your business. Raising VC funding isn’t the only definition of success. The longer you hold off on raising funding and the less you raise, the more options you keep open and the more ownership you maintain, generally. Another point by Jack: when raising funding, put one person in charge of the process and send him/her to the meetings only – don’t let the process distract your entire team, keep them focused on building the product.
- Don’t be afraid to pivot.
- SeatGeek grew out of the largest pivot from DreamIt ’09. The founders, Russ D’Souza and Jack Groetzinger, were accepted to DreamIt with an entirely different business – Scribnia.com, a blogger review platform. They sold this business in June 2009 and built the SeatGeek prototype in 1.5 months in time for Demo Day. The message: no matter what pivot you’re considering, it’s not bigger than changing your business entirely, so keep all options open.
- Notehall changed the way it sold notes at campuses. Originally, it gave notes away for free to kickstart the market, but advisors were suggesting they try another model. Finally, after months of ignoring this advice, they finally piloted a different model and found it to be hugely more successful. The message: be open minded – the DreamIt partners and your mentors may not know your market specifically, but they know how to grow businesses. Be true to your vision, but be open to trying other models.
- FanGamb pivoted with regard to two aspects of its model – how to drive engagement and its business model. Regarding engagement, a key assumption was that badges and leaderboards (i.e. social proof) would be enough to drive users to be engaged with the site. To a point this was true, but never to the level expected. Similar, virtual goods were expected to be a key monetization engine for the site, however, without the high levels of engagement, this wasn’t effective as a first step. As a result, the FanGamb team tested multiple options and is in the process of implementing a new model (again, no specifics currently – news coming soon). The message: get your core user base using the product as soon as possible, throughout your iterations and test your user acquisition methods, too. We wrote off early user behavior because we were testing with a different sport than we would launch with in the fall, but in retrospect should have taken a harder look at the data.
- What do you think some were some of the key factors that led to your companies succeeding, versus those that didn’t from your DreamIt cohort?
- Don’t die – find a way to pivot. In nearly every startup concept there is a nugget of truth/value – you need to distill your concept down and figure out what that is as quickly as possible and make course corrections along the way. Startups are a process of going down as many dark alleys as you can before you run out of motivation and money.
- Get real customers using the product as soon as possible and find out what they really think. (Side note: it was amazing how many of the DreamIt startups talked about the status of their customer development efforts in parallel with their product development efforts in their overview/status talks – quite a change from a year ago, really showing how the lean startup methodology has taken hold. Seems to be effective lean startup, too, not lean washing…)
- Solid, stable teams that put in a ton of hours (the three companies on the panel represented teams that put in some of the most hours throughout the program – SeatGeek put in 36+ straight at one point, winning the prize for the most time in the office) — this wasn’t specifically mentioned during the panel, but was an observation we noted afterwards
Certainly lots of good thoughts and lessons learned from the panel. More great thoughts and startup advice from Steve Barsh’s Kickoff presentation coming in a future post.