Launch Pad Ignition

Launch Pad - an open approach to mentorship and network

Fri, 24 Aug 2012 16:18:00 -0400

At Launch Pad, we are passionate about helping entrepreneurs develop as leaders and succeed and we’re proud to announce the continued growth of the mentorship-based programs at Launch Pad. Next year, we will be integrating Launch Pad and Launch Pad Ignition in an expanded approach to work with the entrepreneurs of our community.

OPEN & INTEGRATED

We’re extending the curriculum, mentors, and network that we developed for the Launch Pad Ignition accelerator program to an open approach that focuses resources on all Launch Pad members, founders in our community, and companies launching in the region. We’re exchanging the standardized slice of equity model for a more natural approach where we’ll be investing as angels in companies we love.

MENTORSHIP

Access to our mentor network for Launch Pad Ignition will be more available than ever to all Launch Pad members and companies in the region. Members will get free access to an expanded slate of mentor events and there will be a nominal fee for Skillshare classes for non-members.

We’re merging classes we already run at Launch Pad with Launch Pad Ignition’s lean startup curriculum, meaning more classes and community events like Hack night, meetup groups, and hackathons alongside mentor sessions that happen on a year-round basis.

NETWORK

Core to our philosophy is the importance of connecting founders in New Orleans to the broad network we’ve built of investors, mentors, customers and partners around the world, specifically in New York and the Bay Area. We will build upon our annual presence at important startup events like SXSW, and our pitch events in New York and at 500 Startups in Silicon Valley.

We’ll continue to expand upon our role in the ecosystem as the conduit to investment capital outside the region alongside educating and catalyzing angel investment locally.

ALIGNMENT

We are focused on ecosystem alignment, not overlap. The entrepreneurial season created by Idea Village and culminating at New Orleans Entrepreneur Week in March has emerged as a powerful institution. We’re focusing on strengthening the post-season that provides a platform for the best companies to pitch to a national network of investors at Launch Fest, the Louisiana demo day, in May.

In the spirit of alignment, we no longer will run Launch Pad Ignition as an accelerator program, we’re encouraging founders to apply for the Idea Village IDEAxcelerator (apply by 8/27) for the formal mentorship and curriculum provided by an accelerator program.

We’re also already collaborating with 4.0 Schools in a continuation of the sector focus that has emerged in New Orleans and will continue to expand that effort.

LAUNCH FEST

For three years, we’ve hosted Launch Fest as an investor-focused event where Launch Pad Ignition companies pitch to local angels and national early-stage investors. Going forward, we’re opening up the event to qualified companies raising investment capital that have local investment in a current round. We’ll continue to expand our angel investor luncheon to build on our mission of educating and catalyzing the local angel community. We’ll cement Launch Fest as the reason investors come to New Orleans during Jazz Fest and deals get done.

//

We’re excited about this next phase for Launch Pad and the entrepreneurs of our community.

- Chris, Peter, Barre, Will, Katy

Dan Parham (Neighborland)

Thu, 03 May 2012 13:06:37 -0400

Neighborland is a platform that started from an idea created by Candy Chang, who asked a very important question: why are there now services in my neighborhood and how do I find out where things are, what people thing? She created a project called “I wish this was” - stickers placed all over town where people wrote in what they wished something in a certain neighborhood was or could be. She then recorded the data. (Example - an old parking meter sticker said “I wish this was a bike rack.”)

People responded to each other on the stickers, sharing ideas and trying to collaborate. She then posted online and included the location on Flickr.
Dan then built the tool (Neighborland) to help people “create the neighborhoods they want to live in.”
A complete, connected, and compact neighborhood is sustainable a neighborhood.
Everyone can create ideas - people can add what they want in the city, in their neighborhoods, on the platform. The ideas are then aggregated to show how many people support it. It has discussion threads for further chat and information exchange right in the tool.
You can see what people want in the city. Conversations happen everywhere. Having them on an open and transparent online platform is powerful.
Example: the St. Claude NIght Market - residents are self-organizing, pro typing, and connecting around one idea. The market is now a regular event.
Neighborland is about people connecting, sharing and understanding, and finding the resources to get something done.
Start with a fun and interesting question and conversation.
Neighborland challenged the RTA to open their data. They did - and now developers can use the data to build tools for transportation to increase transparency.
You have to understand politics if you want to get something done.

Andy Weissman (Union Square Ventures) and Andrew Yang (Venture for America)

Thu, 03 May 2012 12:52:22 -0400

Andrew asked Andy several questions about his experience at Union Square Ventures and working in the tech industry. Andy talked about the momentum and rebirth that is happening in New Orleans, which are both great ingredients for creativity and start ups.

What are you seeing in terms of companies who are pitching now? What are the attributes that make you take notice and consider investing?

Every venture firm should have a different perspective and point of view/focus.
At Union Square Ventures, they have a wide view of why the internet is important - because it’s a network, it has the power to create transformational businesses and opportunities.
We are at a unique point, where we are seeing the early days of the informational economy. This is a major transformation from before, in what we now produce, including software, content, services, ideas, and applications. This is where the greatest growth will occur. The internet connects people, data, business, etc. As a network, it will destroy the incumbent and create new things in its place.
USV look for networks, market places and platforms for the exchange of information, ideas, etc.

Do you have advice for entrepreneurs in cities like New Orleans, which may be considered non traditional tech hubs, versus NYC or Silicon Valley?

There is no such thing as a non-traditional tech hub anymore. Anyone can build from anywhere now. VCs are only limited by how quickly they can meet with people. Union Square Ventures looks for large networks of engaged users.
They don’t care where they are. You just need a geographic density and creative group of people. That builds energy where an eco system can sustain itself, including investors, creatives, schools, developers, etc.

What are the magic ingredients to a successful start up?

If your company doesn’t work out, it can become something else.
Just go for it. 1/3 of all investments will not work out. USV has a 67% failure rate.
It’s important to find and create a service that will help people.
Silicon Valley has taken the friction out of failure by enabling easy rebirth. It’s an ongoing process. Start again if you fail. Eventually some things may work out in a different iteration.
It’s ok to make mistakes - but not the same ones over and over again.
Be transparent - publish first and edit later.

Do you have any advice for those who are trying to create a start up?

Just get into it - find a company you love and get involved.
New Orleans provides a great environment for this - people are open here and want to hear from you and talk to you. Reach out to them.
This may be true about the industry as a whole.
Twitter and someone’s online presence is a great way to check their references.
Use your networks to find people who are interested in the same things as you and reach out to them.
Keep going until someone says yes.

Being an investor is hard; it includes:

Pattern recognition to identify trends in successful start ups.
Gut feelings and moving on those start ups that just feel right.
The ability to revisit ideas; sometimes VCs change their minds.

(Audience question) How do you deal with increased competition in the Angel Rounds?

More transparency, more competition is good. There is nothing wrong with it - it makes the VCs have to work harder to get to invest, to understand what they can bring to a company.
Money is a commodity. VCs are a good model for pushing capital to the start ups. VC customers are the entrepreneurs.

Richard Mumby (Bonobos)

Thu, 03 May 2012 12:25:14 -0400

Richard is the head of marketing for Bonobos, a clothing company. He just moved to New Orleans and will be advising local start ups in the area.

Start Up Observations and Things that Inform Success.

Identify and address a need in the market

Find friction in an industry and be disruptive where possible. Find the problem in the industry and set out to fix it.
Fix the pain points in your own life. Where is there a lack of satisfaction?
Focus on a specific value proposition. In an effort to think broadly, think of all the benefits of your business and focus on the value of your company. The elevator pitch is VERY IMPORTANT.

Target a very specific customer

Focus on a specific population first. Understand what their specific needs are and what you can do specifically to help them.
Create an army of advocates and equip them with a referral tool to extend your brand reach over time. PR and referrals are the greatest way to grow a company.
Prove out economics with a favorable audience. This will help with attracting investors over time.
Targeting audiences in advertising can help in figuring out who your customers are.

Utilize public relations

Distinguish launch from ongoing press. Create newsworthy activities over time.
Actively manage your PR; consider a PR firm versus buying advertising. Maintain ongoing active conversations. Manage the PR firm like a direct report.
Create stories. Make them creative. The company has to come up with these ideas just as much as the PR firm, who figures out how to use the event to push out to the media to create coverage.
All Bonobos marketing channels have direct responses to the audience. It’s important to develop a true relationship with the customers. Facebook has a high volume of engagement. Nearly all marketing is web-driven.

Paul Singh (500 Startups)

Thu, 03 May 2012 11:58:59 -0400

Moneyball and Startups: It’s not spray and pray. It’s a process.

Paul started the fund a few years ago, and has invested in 330 companies across 18 companies. A lot of failure, many big wins.

Changes for early stage fundraising:

Smaller checks are being written. Funding is now driven by the fact that it’s cheaper than ever to start a business.
It’s not uncommon to see a start up launch and get to a paid customer in one weekend.
Years ago, you needed more money to purchase infrastructure. You don’t need that anymore.
Investors have to buy wins - they can’t just fund everything.
Tactics have changed over time. Channels have not changed. All you can look for is smart founders who have proven they can execute, give them money, and get out of the way.
Everything is increasingly going to referrals. Investors are looking for verticals that the referrals are in. Make sure the referrals are coming from the same verticals.
BRAND MATTERS. BRAND IS EVERYTHING. Functional expertise matters.
Costs are decreasing, launching happens faster. Diligence happens after the first check. VC makes money on the second check. You still need big money to scale.
Loans and funding may be based on your social media presence.
They do sentiment analysis on your company - what does the market think about what you are doing?
VCs are looking for signals online that funding might occur, that a company might die, based on what is being said online.
The initial check is designed to give the VC greater access to more data about what the company is (or could) be doing.
Founders need to understand that investing doesn’t work unless the investors make money. The bar in early stage VC is very low.
People are becoming less sensitive to pricing.
The average initial investment is anywhere between $10,000-$100,000. This is typically paid by the VC to get to the next stage with the company. You don’t want to put too much money to work at first.
They love web infrastructure, companies that make it easier for other star tups to grow. They also love family tech, food, games, and child-focused verticals.
Make sure you check out Angel List (angel.co); it’s helping to level the playing field.
Try and raise money outside of your region.
VC is interested in multiples when looking for funding opportunities.
VCs are looking for the regional funders to provide the initial support. They are looking for this first before writing larger checks. They need to know that the region supports the start ups.

Launchfest - Noah Kagan (AppSumo.com)

Thu, 03 May 2012 11:34:27 -0400

From Ghetto to Classy

Noah has worked at several companies, including Intel, Facebook, Mint, and Gambit. The most precious resource is time. After today, he hopes that everyone will walk away with one actionable idea.

How AppSumo Started - Start simple and build out from there!

They started with a landing page and began collecting emails. Noah treated business is a hypothesis - he wanted to test it out to see if the idea worked. He thought that people would want to buy digital goods in bundles (daily deals for web geeks), and created AppSumo to see if it was true. They built AppSumo for $50 in one week. Paypal integration, and he built out the front end. He searched Google and used the code he found to build the landing page.

Here are some important points:

The velocity to the first dollar - how do you get to prove your business is working?
Focus on relationships - they are the most important aspect of starting a business.
Start your work with those who you want to build a relationship with. That should be done first.
Don’t build out at first - it’s more important to prove people want to use your business.
It’s not about being pretty - it’s about getting customers quickly. Over time, get classy. Make sure you pace yourself. Don’t spend a lot before you make it.
Do not a/b test if you are not at least at 100,000 visit a month. you haven’t proved your business is working yet.
Evolve from ghetto, using free products, to hiring, to paying more, to growing. Use Google website optimizer at first. Build out from there as you become more successful over time.
Have a specific target and focus on achieving it.
Think about your business as a funnel - start at the type of the funnel.
The bar for amazing ideas and people is really low. How do you be memorable, and treat your customers well?
Think about optimization - do you have a fast enough computer? What else do you need? Work the way down your funnel.
Optimize your landing page. Then go from there.
Test stuff out before building it out to see if it’s really wanted. Do something for a day, throw it out there, see if it works, and then build it out.
It’s not that you can’t do big things, but the point is how do you do the core of the good idea quickly without distraction, and then go from there without wasting $$$?
86% of their efforts fail.
Surround yourself with better people. They will help your business grow.
If you do anything more than once, set up a system. Document things - make sure you know what to do if people leave. Don’t repeat things over and over and over.
Generate and automate if possible.

Martin Roth: The "Minimum Viable Partner" Approach to Hiring a Developer

Thu, 19 Apr 2012 14:11:11 -0400

Martin Roth: The "Minimum Viable Partner" Approach to Hiring a Developer:

martinroth:

This post is a response to “How to hire a programmer when you’re not a programmer” by Matt from 37Signals.

If starting a company is hard, starting a tech company without a technical co-founder is even harder. Such is the case with Giftmeo, my fledgling company that is taking over the…

Ready to startup? Come to Launch Fest

Wed, 18 Apr 2012 16:44:00 -0400

Launch Fest is a conference with a dual mission:

1) Inspire and prepare the next generation of founders (morning)

2) Get early-stage NOLA startups in front of angels & VC’s (afternoon)

Last year at Launch Fest, Barrett Conrad was sitting in the audience watching the speakers talk about lean startup strategies and listening to the pitches by the 2011 Launch Pad Ignition founders. He had been the first tech lead on Jen Medberry’s startup, Kickboard, so he knew what it took to build a successful product. He thought to himself “I should be up there next year.”

Inspired by Launch Fest he applied to Launch Pad Ignition last fall, and on May 3rd Barrett will be onstage pitching Red Ticket Games, his new social gaming startup with his first app, Expert Trivia in the app store.

What a difference a year makes.

What will you be doing a year from now? Come to Launch Fest May 3rd and get inspired to achieve what you’ve always dreamed of doing!

Practicing What You Preach, Iterating Our Accelerator

Thu, 15 Mar 2012 18:07:51 -0400

Practicing What You Preach, Iterating Our Accelerator:

A guest post by Launch Pad Ignition co-founder Peter Bodenheimer for the Global Accelerator Network.

Launch Pad begins fresh remix of Ignition

Tue, 14 Feb 2012 16:32:25 -0500

Launch Pad begins fresh remix of Ignition:

From CityBusiness

How Launch Pad Ignition is Changing the Face of the New Orleans Tech Scene

Tue, 14 Feb 2012 16:31:02 -0500

How Launch Pad Ignition is Changing the Face of the New Orleans Tech Scene:

Post from New Orleans Tech

Launch Pad Ignition: 2012 Class Revealed

Tue, 14 Feb 2012 16:29:36 -0500

Launch Pad Ignition: 2012 Class Revealed:

Press from Silicon Bayou News.

Ignition Internship Program

Mon, 06 Feb 2012 15:02:47 -0500

Ignition Internship Program:

Want to work with NOLA’s next hot startups? Here’s how.

New Orleans and Young Entrepreneurs: Nurturing Each Other

Mon, 23 Jan 2012 11:39:01 -0500

New Orleans and Young Entrepreneurs: Nurturing Each Other:

Looking for a supportive start-up community in which to launch your venture but hoping to skip the extreme competition of the likes of Silicon Valley? If you hurry, New Orleans may be the answer.

—- From Inc. Magazine

Launch Pad Ignition and Abstraction Ventures Partner to Provide Seed Funding to New Orleans Startups

Wed, 11 Jan 2012 12:46:00 -0500

NEW ORLEANS, LA – January 11, 2011 – Launch Pad Ignition is announcing today a partnership with Abstraction Ventures to provide seed funding to select startups accepted into its accelerator program. Launch Pad Ignition is embarking on its second accelerator class in the spring of 2012, with the 12 week program commencing February 13.

In a shift from traditional accelerator models, Ignition is taking a stage-agnostic approach for 2012, allowing it to work with bootstrapped, pre-funding or angel funded companies. Combining world-class mentorship with a bootcamp-like intensity, the program focuses on helping companies demonstrate customer traction in just 12 weeks.

Abstraction Ventures will invest the critical seed capital of up to $20,000 in select companies accepted into Ignition that have not yet raised funding. Amith Nagarajan, co-founder of Abstraction Ventures, will join the Ignition Advisory Board.

“Launch Pad Ignition is focused on accelerating early stage startups and so are we. This partnership combines an excellent accelerator program with access to our seed-stage fund. The combination offers tremendous benefits for both organizations and most importantly for the entrepreneurs with whom we work.” said Amith Nagarajan. “We bet on smart people with great ideas, and we know at the earliest stage, entrepreneurs need an investor to believe in them. Launch Pad Ignition provides a great pipeline of interesting companies and the resources and support to position them for success.”

“Abstraction Ventures has been the most active early stage investor in New Orleans over the last year and shares our philosophy of investing early in passionate founders who have a path to revenue and focus on execution” said Chris Schultz, co-founder of Launch Pad Ignition. “We are thrilled to have Abstraction as the funding partner for 2012’s accelerator class”

About Launch Pad Ignition
Launch Pad Ignition’s mission is to develop the New Orleans start-up ecosystem and to create rich connections between start-up founders and its mentor network of entrepreneurs, experts and investors from across the US. In 2011, Ignition funded 6 companies and built a network of more than 50 mentors and investors in New York and Silicon Valley. The Accelerator program is housed and supported by Launch Pad, a co-working space in downtown New Orleans. Founded in 2010 by Chris Schultz, Peter Bodenheimer, Barre Tanguis & Will Donaldson, Launch Pad Ignition provides entrepreneurs the tools, community and support needed to move their business to the next level of growth. Learn more and get involved at http://launchpadignition.com

About Abstraction Ventures

Abstraction Ventures is a family fund formed formed to help early stage entrepreneurs translate their vision into commercially successful businesses. Abstraction provides both funding and guidance to early-stage, socially aware, high-potential growth companies. Abstraction’s portfolio is focused primarily on companies using technology in creative ways to accelerate growth, improve efficiency, or make new connections in traditional markets. Abstraction bets on smart people with great ideas. Learn more at www.abstractionventures.com.

Contact: Chris Schultz, chris@launchpadignition.com, 504-298-8884

We’re attending the second installment of SANFRANOLA, a...

Wed, 11 Jan 2012 12:32:24 -0500

We’re attending the second installment of SANFRANOLA, a celebration of the commonalities, connections, and culture of New Orleans and San Francisco on Wednesday, January 25 at Public Works, located at 161 Erie Street.

RSVP here.

Bay Area entrepreneurs and digital media professionals are invited to experience the music of DJ Brice Nice and Lagniappe Brass Band, alongside complimentary food from Jambalaya Girl. In addition, there will be a brief presentation on the rise in entrepreneurial and digital media activity in Southeast Louisiana and the opportunities that exist for Bay Area startups to participate in attractive business incentive programs and connect with like-minded individuals in their industries.

You Rule!

Wed, 04 Jan 2012 18:05:08 -0500

Thanks for submitting your application! We’ll be reviewing them as they come in and will contact you with any questions and/or follow-up.

Sneak Peek - Multi-Device Deployment Using GBS

Thu, 15 Dec 2011 13:40:08 -0500

gbsbeta:

Sneak Peek - Multi-Device Deployment Using GBS from Lavon Woods on Vimeo.

I’ve recorded a short clip of the Asteroids demo game running on the iPad, Blackberry Playbook, and on the desktop. If I had more devices at hand I would have included them all in the video. But this is just a little teaser of what you will be able to do with GameBuilder Studio soon. No one has made this an easy process until now! You can even deploy to iOS from a Windows computer :). No need to buy a 2k Mac computer.

Behind the Scenes: How Fab Raised $40 million with a lot of data and not much pain

Thu, 15 Dec 2011 13:14:35 -0500

betashop:

Let’s face it, fundraising can be a real pain in the ass for the entrepreneur.

It takes up a ton of time that can be otherwise spent managing the business.

Sure, it’s a necessary evil, but it’s also typically a big distraction.

It’s also a lot like dating. You have to go on a lot of first dates before you can move on the to the second, third, fourth, and then hopefully marriage. The worst thing you can do is slut around. It wastes a ton of time, can damage your reputation, and doesn’t get you far.

When we decided to raise a large round of financing for Fab in October, my biggest concern was that it would divert our management team’s time and attention away from running the business at a critical time, as we were simultaneously scrambling to prepare for our first holiday season at Fab. Yet, our numbers were really good, the business was accelerating exponentially, and the investment climate was strong for businesses with traction like ours. I also feared that Europe could collapse at any moment, so while we didn’t exactly need funding in 2011, waiting to 2012 scared me. So, we decided to wade in.

As our “one thing” at Fab.com is design, I put a lot of thought and consideration into how we might design our fundraising process differently from the norm, so as to optimize around time spent fundraising vs. running the business, and to quickly hone in on who we wanted to marry.

The typical VC dog and pony show goes like this:

VC’s approach company or Company approaches VC’s. Often this starts with an associate at the VC firm pinging the entrepreneur. That’s their job, to build deal pipeline, evaluate companies, and then hopefully engage a partner when they find something interesting.

VC’s ask company to send over a deck by email.

VC’s invite company to pitch at the VC’s offices.

Company presents the deck on the company: vision, market, strategy, progress to-date, plan. It’s mostly high level stuff at first.

VC’s ask questions.

Company responds.

VC considers next steps.

If no, company never hears from VC again.

If yes, interest, company is asked to come visit again and educate more partners.

If yes, interest, company is asked to provide a data dump of financials, models, projections, etc. An analyst or associate at the VC firm digs in to study the models, poke holes, challenge.

If yes, interest, company is asked to spend many more hours discussing models, providing further analysis.

If yes, interest, company meets with the entire partnership.

Final Yes / No decision.

Now, imagine doing that same process simultaneously with 3 firms for 6 firms or 10 even. The whole process can take A LOT of time and brainpower that otherwise could be spent running the business. The worst part of it is going on a lot of first dates, and then second dates, before really diving into the details that really make up the business.

Having gone through this process a few times in my career as a “serial entrepreneur,” one thing I’ve always been amazed by is that the VC’s typically don’t dig into the hard core numbers behind the business until near the end of the process. It’s mostly a lot of team + vision to start, numbers to follow. That makes sense from the standpoint of it takes a great team and a great vision to build a great business, but the numbers also need to add up.

Here’s what we did differently with Fab’s recent round.

From August through September I received more than a dozen inbound requests from VC’s to meet to get to know me and Fab. I politely put each of them off with the same message: “Thanks so much for your interest. Sorry, but we’re really heads-down right now running the business. Will circle back to you when we’re ready to have a serious chat about fundraising in the near future.” (Note to entrepreneurs: NEVER meet with VC’s unless you are 100% ready to fundraise. They may say they just want to get to know you but they are always evaluating every interaction with you. If you’re not ready, it will show. And it’s a waste of your valuable time to talk to potential investors when you’re not serious about raising.)

In October we decided to get serious about raising our round.

I set out a plan to try to design our fundraising process such that it would:

Take up as little of my time as possible.

Take up almost no time from my management team. I needed them focused on getting people the best design objects in time for the holidays.

Quickly accelerate the process by focusing more on finding the right team to marry vs. going on a lot of dates. I defined a “good marriage” as a firm that really understood and appreciated our business, and who met the 3 criteria below.

We put together a forecast for how much capital we would require. At our current run-rate, it’s no doubt that we’ll hit $100M in revenue fairly soon. The challenge was to model out how much additional investment we’d require to quadruple that in the next few years. (Note to entrepreneurs: You need to really know your customer acquisition metrics and customer lifetime value equations in order to create a viable model. So much of your model will depend on how much you have to spend to acquire members and then the percentage of them that buy from you over time. You need to be deep in the details on cohort analysis and payback periods for all investments you plan to make).

Before engaging any firms, I then developed a strategy with our board members to identify the 5-8 firms we thought best fit our criteria. In our case, we were looking for a unique blend of:

Venture Growth Capital. We needed an investor partner who could write a big check on their own (e.g. $25 - 30M), while still understanding that our business is relatively early stage as we had just launched 6 months prior.

Recently Active in Hot Companies. I really wanted a partner who had a recent track record picking winners. The consumer Internet moves so quickly. I wanted to work with a firm — and particularly a partner at a firm — who was at the forefront of recent trends, not playing catchup.

Got E-Commerce Scaling. We’re a rapidly growing e-commerce company. We needed a partner who understood our business dynamics and could help us scale it up.

We narrowed our list down to about 7 firms.

When we decided in October that we would be raising a large round for Fab.com, one of the things I was most concerned about was spending too much time raising money vs. preparing Fab for the holiday season. The last thing I wanted to be doing going into our first Fab holiday - nor could afford doing without detrimentally impacting our business - was to spend the majority of my time in VC meetings and preparing for VC meetings.

So, we designed a different approach to engaging the VC’s.

The big thing we did differently was to send each of the potential investors a login to our RJ Metrics Dashboard before we agreed to meet with them. We requested that each potential investor login and review our RJ data and decide for themselves if they wanted to learn more about Fab.

For those of you not familiar with RJ Metrics, you need to be. Basically, RJ Metrics is the best business intelligence dashboard for startups on the market. If I were a VC, I would demand that every startup send me their RJ login before meeting with them.

RJ Metrics works as follows. You spend a couple of hours connecting your production database to RJ Metrics and then it spits out the most amazing graphs and charts on all facets of your business. It updates every couple of hours based on your actual production data. As a dashboard it’s fantastic, but the real power of RJ is in its cohort analysis — RJ enables you to effectively monitor each cohort of users by join date and then then evaluate their revenue contribution, payback periods, engagement levels, and lifetime value.

From a fundraising standpoint, providing access to the RJ data basically said to the VC’s, “here we are, here’s the data, we’ve got nothing to hide, take a look and decide for yourself if you want to pursue investing in Fab.” Effectively, we turned the pitching on its head. Since the RJ data updates several times per day directly from our database, it was many times more powerful than providing powerpoints and excel spreadsheets. This was the real stuff, auto-updating! And, since RJ enables all the data to be downloaded into excel, the analysts at the VC firms were able to do all of their own analysis on the front end of the investment process.

This enabled the VC firms to get themselves educated on our progress

And, it then teed up a series of well-educated discussions with the VC’s around the next level of data analysis, e.g. trends amongst cohorts, time to 1st purchase, and repeat purchase rates.

And, it made the vision stuff less of a ppt deck, and more of an expression of what we’re all about:

As you see, the slides became more launching points for discussions, than the meat itself — because we had already served up the entree for the them to digest up front.

In the end, we had many firms that wanted to invest in Fab. The process worked well for us because we were able to pick the partner we wanted to work with to scale our business while not allowing the process itself to disrupt our operations and eat away at our ability to continue executing. And, we cultivated educated VC’s who really understood the fundamentals of our business. Remember those 13 typical steps in the VC process from above? We managed to shrink them down to about 4.

Not every entrepreneur is as comfortable as I am with putting all the data out there. To be honest, I wasn’t this comfortable sharing the data either my first few times raising money. Having gone through it a few times now though, my philosophy on this today is simple:

The data is the data is the data. If you can’t measure it, it never happened. Any investor worth their salt needs to understand your data before they invest, or you don’t want their money anyway. So, put it all out there. If the data is good, it’ll speak for itself, and then you need to tell the story of how it gets even better. If the data isn’t good, well, then you need to tell a story of how you are going to turn it around. Either way, the data is the data is the data.

One final note. I’m just thrilled that we’re working with Jeff Jordan and the team from Andreessen Horowitz. Jeff and his partners — more than any other firm we talked to — really jumped right into the data, digested it, analyzed it, and then quickly focused on how they could work with us to realize our big vision. In the end, we didn’t focus on valuation much at all, rather we picked the firm we really wanted to get married to and work with to grow our business. Jeff and team met our criteria and then some.

I hope this was helpful.

p.s. I’m such a big fan of this RJ Metrics stuff that I recently asked them to let me invest in them. More on that later.

Last night at the 3-2-1 Ignition info session for our 2012 class...

Wed, 07 Dec 2011 11:06:45 -0500

Last night at the 3-2-1 Ignition info session for our 2012 class we presented this deck. We had a terrific turnout, if you weren’t able to make it, please feel free to email us if you have questions about the structure of this years program.