Jessica Alter | May 30th, 2013
This guest post was written as part of our FounderTalk series by Noah Glass, Founder & CEO of OLO. OLO is the leading digital commerce engine for restaurants, providing online and mobile ordering capabilities to top restaurant brands like Five Guys Burgers & Fries, La Boulange (recently acquired by Starbucks), and many more. You can follow or respond to him @nhglass.
Between my freshman and sophomore years at Yale in the Summer of 2000, I had the good fortune to work as a Product Manager Intern at Shutterfly (SFLY) in its very early days, with about a hundred employees. Beyond the sheer exuberance of that time – the peak of the first dotcom boom, I loved Shutterfly because I had the opportunity to work on a B2C service. It was a joy to spend my time working on a product/service that my friends and family could use and enjoy. One that would make consumers’ lives better. When it came time to start my own company five years later, I was thrilled to dive into the same challenge to make consumers’ lives better. Like many a young founder, B2C was kind of all I knew and I was enamored with it. I’d launch a service and touch millions of consumers –that was the plan.
When I first moved to New York City after graduation, I lived on Wall Street – which was like living in a ghost town after 6pm on a weekday and a tourist attraction on the weekends. A combination of New York City development grants and general public disinterest in living in the Financial District made Wall St. ridiculously affordable. Every morning, I would stop for coffee at the 45 Wall St. Starbucks and get stuck in a 10-20 person long line of stockbrokers and i-bankers trying to get their caffeine fix. My personal frustration turned into a fascination with creating an easy way to order and pay ahead, so that I could skip the line. With a scrappy founding team, some seed money, and a working beta at the ready, I headed back to the Yale campus in New Haven to launch GoMobo.com – the first mobile ordering service, allowing consumers to order and pay by text message and skip the line for their morning coffee.
My grandmother and mother came to New Haven on November 30, 2005 to place the ceremonial first two orders. Yes, really. Yale students loved it and so did the coffee shop. We adopted “Skip the Line®” as our trademarked tagline and returned to New York City to launch in Silicon Alley, at Rockefeller Center, and on Wall St. in 2006. The press ate the story up, culminating in a lead-off piece on “Good Morning America” and BusinessWeek naming me a “New M-Commerce Barron.” It felt like I was living the dream. In March 2008, we quietly raised a $7M round to scale up independent restaurant sales and consumer acquisition.
Bear Stearns and B2B
For a couple of months, we ramped up our consumer acquisition efforts and were spending $150k to generate 10,000 new consumers per month. GoMobo’s customer lifetime value story was less than clear. Restaurants paid us 10% per transaction. Were we really expecting the average customer to spend over $150 on GoMobo before churning? That seemed like an awful lot of coffees and sandwiches.
Then came the Bear Stearns collapse and the financial calamity that followed. Our new Board of Directors encouraged me to explore new business models. What if the restaurants paid a flat monthly fee and promoted the service to their existing customers as VIP access: an extra benefit for their loyalty? That line of thinking ultimately led to experiments with a SaaS subscription fee model and a white-labeled offering. But that meant that the B2C model that I had cherished was getting tossed aside. Despite the sky falling all around us, I was in the “Kellogg’s overtook Post by doubling down on marketing during the Great Depression” mentality, trying to convince myself that now was the very time to ramp up consumer acquisition even further.
It’s So Hard to Say Goodbye to Consumers
What followed was a soul-searching period in my life as a young entrepreneur. I knew that the numbers were not on my side, but did I really want to spend my time working on a non-consumer startup? That wasn’t why I’d gotten into entrepreneurship in the first place. I wanted to create consumer-facing products to make consumers’ lives better. I didn’t want to have to compromise with other companies’ brand guidelines and other exogenous limitations. I shuddered to imagine my company being categorized as just another supplier/vendor/service provider. What would it feel like to be one of many companies to receive an RFP (request for proposal) – a dreaded indication that you are not special and one-of-a-kind but one of many who could fulfill a customer’s need? What would it feel like to forego our consumer brand and offer a private-label version of our service?
I didn’t have many startup entrepreneurs to turn to and ask for advice and perspective. Essentially every startup I knew was in the B2C space and found B2B “boring” and/or “not worth the effort.” So instead I went to restaurant industry tradeshows over the next couple of months and spent my time trying to get into the heads of the suppliers – the companies like PepsiCo Foodservice and Sysco that provide their products to the restaurants to then sell to consumers, oftentimes without a trace of the supplier’s brand. Talking to the executives of these foodservice companies showed me that a company could take pride in scaling to a large and commanding market share, even if it’s brand was not front and center to the consumer. It also showed me that one could take the same kind of approach to product design and development with enterprise/B2B users as one could with consumers. In fact, many of the suppliers that I spent time with at the restaurant industry tradeshows described formal enterprise/B2B user groups that they developed and maintained to help steer their product direction and ensure that they were building products to serve large future market needs.
B2B2C – A Scrappy Model for Scaling
I committed to giving the B2B model a shot and told myself that we could build a “B2B2C” model: we would be the backend technology that enabled restaurant brands to provide better service to their consumers. GoMobo.com gave way to OLO.com: the restaurant industry acronym for “On-Line Ordering” and our new B2B2C brand. Nobody heard much about the company for the next couple years. The consumer press seemed less enamored with the new model. The irony was that we actually were finally starting to crush it – and by doing so, we were actually reaching many more consumers and having a much larger impact toward my goal to make consumers’ lives better.
I remember the Board meeting when I got to explain that we had been paying $150,000 to bring in 10,000 new consumers per month and now we were getting paid $150,000 to bring in 100,0000 new consumers per month. By shifting to a flat subscription fee model, we were able to align incentives with our B2B restaurant partners so that they marketed the lights out of the Skip the Line service on their websites, through their email marketing lists, and in-store and got their money’s worth. This was much more targeted and efficient marketing than we could ever have pulled off as an independent consumer brand. The predictable cost and overwhelmingly positive ROI of the flat fee model led to OLO signing marquis restaurant brands like Five Guys Burgers & Fries, the fastest growing chain in the history of the restaurant industry. In B2C mode, we only ever reached 100,000 consumers.
Today, in B2B2C mode, we will soon blow past 3M consumers. We power restaurant branded mobile apps and do not compete with our own, instead providing our aggregated roster of restaurant menus as a feed to an exclusive network of discovery websites and apps like GrubHub.com – our former rivals – for incremental transaction fee revenue. And while I am consistently haunted by the inevitable question “so, where do I download the OLO app?”, the plan is to stick to our knitting and keep up the scrappy B2B2C growth that has served us well over the last several years and keep iterating and improving our offerings with both the consumer and the enterprise B2B user in mind.
My original fear of loss of control with a B2B model turned out to be overblown. I’ve been able to challenge major brands to rethink their consumer experience and use OLO’s platform to make consumers’ lives better – my original reason for becoming an entrepreneur – at a much grander scale. It is a great honor to touch as many consumers as we do today and with many different varieties/applications of the original digital ordering and payment service. Many of the best ideas that have gone into making OLO the elegant platform that it has become originated from a close and collaborative partnership with our restaurant clients in true B2B client-vendor style. Today, as an older, wiser B2B entrepreneur, I am grateful to OLO’s clients for pushing our thinking and giving us a grand platform to make millions of consumers’ lives better. That’s the very challenge I set out to meet eight years ago. It just came to fruition in a different manner than I had planned. But doesn’t it always?
Jessica Alter | May 22nd, 2013
Yesterday was another reminder that life is short. A friend of mine announced that his wife has been battling cancer and without a bone marrow transplant, she only has two months to live. Aside from the fact that she has otherwise been a healthy, vibrant woman who doesn’t do anything in excess, she also has a 2-year old son. It’s heart wrenching. But what does this have to do with entrepreneurship?
Much has been made lately of the hype around entrepreneurship – TV shows, movies, acqui-hires. Steve Blank even went so far as to call Silicon Valley “The New Hollywood.” And there is certainly some truth to the idea that entrepreneurship has been glorified. But those who have gotten a true taste nod their heads at Elon Musk’s quote, “Being an entrepreneur is like eating glass and staring into the abyss of death.” We have great days and terrible days (sometimes it’s more appropriate to talk in terms of hours). It’s mercuric and lonely. It’s not about being on a list of top xxx in tech or getting a TechCrunch article. It’s not about fleeting moments, it’s about building something great and that takes time.
So, it’s on days like yesterday that I take a minute to step back and ask myself the question every entrepreneur should ask themselves: “Is there anything else I’d rather be doing?” I’m thankful that I’m working on the problem I feel literally callen to solve – helping people do what they really want to do. But if you’re considering doing something entrepreneurial or you are an entrepreneur, ask yourself this question. If the answer is ‘yes’, go do it. If the answer is ‘maybe’ go figure it out.
Only become an entrepreneur if your answer to this question is a resounding ‘NO, THIS IS WHAT I WANT TO BE DOING!’. Only become an entrepreneur if you can’t stay away. If you are doing the thing you REALLY want to do. Because the glory rarely comes and life’s too short to do something else.
Jessica Alter | May 15th, 2013
David Murray and Brett Larkin are members of FounderDating. They met through FounderDating and have started their own company – GoalSponsors, a coaching and monetizing platform for non-medical health practitioners.
WHAT MADE YOU DECIDE TO BE AN ENTREPRENEUR?
David: It was kind of a cultural norm at Google that you’d “graduate” from Google to go run your own, successful startup. And being a product manager on GMail I often felt autonomy and it starts to give you the confidence that you can do it on your own. Beyond that I also believe there are 3 facets to life 1) mood, 2) pleasure, 3) meaning in life. I felt like I had the first 2, but the meaning was lacking and entrepreneurship has been the way I’ve found meaning and purpose.
Brett: I was really interested in freedom and building something I truly care about.
WHY DID YOU APPLY TO FOUNDERDATING?
David: I originally heard about FounderDating from Josh Merrill (a friend and fellow entrepreneur) who heard about it from Manu Kumar (K9 Ventures). When I started I was doing everything by myself. And I quickly found that there are a lot of things stuff that a) I wasn’t good at and b) I didn’t enjoy doing. I not only wanted help with those things, but also I was lonely. I actually worked at an office and had other people around, but that’s not the same thing as working with people. But I didn’t have anyone to share successes with or support me in the struggle (more importantly). When things don’t go well, you have no one to console with. Sure, you can call a friend or a loved one or something, but it’s not the same – they don’t the struggle and they aren’t as attached to it.
Brett: One of my mentors and a repeat entrepreneur, Larry Braitman, recommended it to me. He knew it was essential to find the right cofounder. It completely changed things for me.
TELL US ABOUT YOUR “DATING” PROCESS.
David: At first I took it slow, but then I reached out to probably 15 people and met with about 5 for coffee just to start a conversation and see if there was even initial interest in even working together. I originally reached out to Brett because I saw on her FounderDating profile that she had a gaming background and was interested in wellness now. We started by skyping becuase we lived about 45 minutes apart.
Over time I realized that the small distance didn’t matter given that everything else – chemistry, complimentary skills, working styles – came together.
Brett: David emailed me over Christmas time and I got excited. We ended up skyping 2-3 days in a row. We then met up for 4-5 hrs and were just talking. Nothing got built right away. After that, we started to meet very regularly for 6-7 weeks.
He met my mentor and had to pass that “test.”
I was actually talking with someone else from FounderDating and we explored all working together. But David just didn’t gel with the third person. They had different motivations, styles, etc. That was actually helpful, because David’s reaction to the other person helped clarify for me what was important. What was important – stage of life, methodology, personality, division of labor. ThingsI knew but was trying to see past because I saw that he had certain skills. I wanted the shoe to fit but the skills were not enough and it ultimately would not have worked.
David I and worked together for 6 -8 weeks before we drew up official paperwork
TELL US ABOUT YOUR COMPANY
Brett: It’s been great working together because we were working on separate projects and after coming together we merged our projects conceptually but started building from scratch. There was definitely an evolution and learning.
GoalSponsors is a platform for health practitioners to privately coach and manage clients at scale. This includes lead gen, payments, scheduling and automation tools.
It’s a coaching and monetizing platform for non-medical health practitioners. Right now, it enables mental health professionals, personal trainers, nutritionists, dietitians and more, to privately coach and manage virtual clients across all their devices (phone calls, texts, email), instead of or in addition to in-person appointments.
SIGNS IT WORKING?
Brett: The key metric we track is revenue and we’ve had 64% average monthly revenue growth and we have 700 practitioners have signed up. It’s been awesome to see.
We raised a small angel round from Larry Braitman and a few others (on track to raise more) and we’re working out First Floor Labs.
WHAT’S YOUR HOPE FOR THE COMPANY?
Brett: All health practitioners will be using the platform and it will allow them to scale their business and have a global/virtual practice. These are people who have amazing knowledge and expertise but aren’t good at marketing themselves. We can help them with that.
David: We want to disrupt the appointment model and make it easy to be in touch and always on so more people can get help.
WHAT ADVICE WOULD YOU GIVE TO FUTURE ENTREPRENEURS REGARDING COFOUNDERS?
David: Open every door that is available to you. Apply to programs you think you’d never get into, make cold calls to people you think would never listen to you. Even the small percentage of things that pan out have accelerated our growth or spawned incredible introductions. Be honest about what you really need and want to be happy, even if it’s not what you think is popular. That is key in finding the right person to be your cofounder.
Brett: Get a cofounder and not just any cofounder, one who is right for you. The minute we found one another all these doors opened – not only did people want to fund us but accelerators were open to us. Of course there are obstacles, but it’s better to have one another. Beyond that, be authentic and be yourself. Don’t try to be something you’re not, your business is you and vice versa.
Jessica Alter | April 24th, 2013
This FounderTalk post was written by Yoav Schwartz. Yoav is the founder and CEO at Uberflip. He holds a BSc in Computer Science from The University of Western Ontario and spends time advising other startups and with his family.
Let me set the stage.
It’s December 2009. My tech startup is hanging by a thread. My co-founder is gone. I’m sitting practically alone in a shared office, my remote sales team just abandoned me, and I’m struggling. I’m taking side jobs to stay afloat (among them, the first version of wagjag.com) because I’ve yet to take a salary. Oh, and did I mention I’m getting married at the end of the month? Needless to say there was nothing glamorous about that time in my life. But I pulled through. I got married, the business hung on (thanks to great people who came through when I needed them), and I knew then what I had thought for some time had to be my top priority – I had to find a new business partner.
As an entrepreneur we get this sense that we can do everything by ourselves. And to a degree it’s what drives us to dive into entrepreneurism head first. But I realized pretty quickly, that just because I could do several things, didn’t mean I excelled, or even enjoyed all of them.
I’m a product guy. I like to design, code, tinker and strategize about product and marketing. I don’t like to do sales calls, support or read/write agreements. Not only do I not enjoy those things, I’m really not great at them either. I’m a product guy.
So when it came time to find a business partner, it was much like finding a second wife (from what I hear – I’m happily married to my first and only! <~ save). I had learned enough from the first experience working with my first co-founder to know what didn’t work. And while that relationship was exciting and brought forth lots of highs and lows, it was not a good combination from the outset. Our skill sets did not compliment each other’s and we weren’t on the same page as far as direction. One example of this – we overlapped in regards to product vision. When we recognized that we had to make our first pivot as a company we didn’t share the same vision for our future. This, among many other factors, proved to be too much to continue working together.
Naturally, this time around I wanted someone who was good at all the things I sucked at or didn’t want to spend my days doing. In a nutshell, for me that was somebody that had a strong business background – an MBA was ideal, was great at building relationships and closing deals, knew their way around a 50-page legal agreement, and of course, wasn’t afraid to roll up thier sleeves and work their ass off. Needless to say we also had to have great chemistry if we were going to work side by side every day.
That was my laundry list. To be honest I had no idea where to look. How do you find someone like that to come into an existing business, take little to no salary, not much equity and keep him or her motivated to perform?
I needed a small miracle.
They say timing is everything and that couldn’t be more true in this situation. Not long after my search began, a close friend (who actually introduced me to my first co-founder) alerted me that a mutual friend had recently sold his business and was looking for a new opportunity.
That person was my current business partner Randy, and while we knew each other (I’m friends with his wife and was actually at their wedding) we had never really said much to each one another.
Randy’s background couldn’t have been further from technology. He had just sold his kitchen manufacturing business! But, being the creative guy that he is, in his spare time he created a really cool video resume using iMovie showcasing his passion for marketing and technology. For someone non-technical this thing was pretty amazing. As soon as I watched it I knew we had to get together and talk.
We felt the risk.
We hit it off right away after sharing that first breakfast at School, but we also both instantly felt the risk that lay ahead. He really had no background in technology (outside of his iMovie skills). But we got along well, he was smart, had a strong business mind and was really passionate about technology. I was his door into the tech space and he was my door to push the business forward. After 2 or 3 meetings over the course of only a couple weeks we put together a quick agreement to try out the relationship for 3 months. If either of us felt it wasn’t working, we could part ways without any hard feelings. Needless to say that didn’t happen.
The opportunity for both of us was completely unconventional, but made plenty of sense. His abilities and passions complimented mine, with really the only overlap being our strong work ethic.
Together, we cover most bases when it comes to running Uberflip, and any areas we both lack we’ve quickly filled with other really talented people.
It’s been just over 3 years since we’ve started working together, and things are going really well. That 3 person outfit is now over 20 and growing.
We’ve built an amazing business, product and culture at Uberflip and while there’s been plenty of ups and downs, we’ve both remained extremely passionate about what we do and we continue to push each other to work harder, and dream bigger.
If there’s any takeaway here it’s that as an entrepreneur the sooner you look at yourself and figure out where you lack, the sooner you’ll find the right person (or people) to go into business with.
From my humble experience, you’re much better off finding someone who’s got a different mind but the same drive, over someone who’s skill sets mostly overlap your own.
Jessica Alter | March 28th, 2013
A few weeks ago, I received an email from a close friend letting me know that her fiance, Hansoo Lee, had passed away after a 15-month battle with cancer (he was 35). It was a stunning reminder of how precious life is and it felt near impossible to offer even a hint of solace. Then I read the blog post below, written by Bhavin Parikh, Hansoo’s cofounder, on Magoosh’s blog. I realized his tribute to Hansoo encapsulated not only that people are truly a company’s most valuable asset, but also the indelible mark one person can have on another. It’s more poignant than any statistics we can post about why cofounders are important. If you’ve even thought about starting an entrepreneurial endeavor, I encourage you to read the below and honor Hansoo’s legacy.
Hansoo Lee was a visionary, a close friend, and my co-founder at Magoosh. On March 4, 2013, at the age of 35, he lost his 15-month battle with lung cancer. Hansoo changed my life, and I will be forever grateful.
Hansoo and I were classmates in the full-time MBA program at Haas School of Business at UC Berkeley. He came to Berkeley-Haas fully aware that he wanted to pursue entrepreneurship. In fact, he wrote the following in his MBA application:
“I believe in the power of a well-operated, sophisticated organization that generates social and economic value. My career goal is to found and lead this type of organization.”
In our first semester at Haas, Hansoo and I joined Pejman, another Haas classmate, and his friend Vikram in creating Magoosh, an online education product initially focused on test preparation. Hansoo quickly emerged as a leader among the group. He was deeply passionate about changing the world through education. He served on the Board of World Savvy, an education non-profit, for several years prior to Haas and continued to do so during and after. Unlike the rest of us, Hansoo had worked at a startup before and knew what it took. He acted with conviction and focused on getting things done instead of trying to make the perfect decision. He had a bias towards action, a value we hold dear at Magoosh today.
Hansoo and I pursued Magoosh full-time during the summer, foregoing traditional paid internships. We worked out of the basement of his apartment for 10+ hours a day. That summer, we released Magoosh in small iterations, from just one page with a question, video explanations, and a text box for email addresses, to over 200 GMAT math questions with full-on video explanations. Early into the first semester of our 2nd year, Hansoo and I were the only remaining full-time members of Magoosh. We were at a crossroads: Should we go back to corporate America or continue to work on Magoosh full-time after graduation?
Hansoo, the visionary
Hansoo was fearless. The decision to pursue Magoosh full-time was a no-brainer for him despite the company having very modest revenue and no funding. His confidence was unparalleled and often led to tension between us. But I later realized that while I could only see what was right in front of us, Hansoo could see through the fog. He had a vision for Magoosh of making high quality educational material accessible to all, and he had confidence in us to see that vision through.
He dragged me, often kicking and screaming, through many of Magoosh’s milestones. In October 2010, Hansoo spent weeks convincing me that we should raise a seed round. I still recall a three hour walk we took around Berkeley’s campus debating the merits of fundraising that ultimately he won out. And the process was easier than I expected, thanks to the previous 12 months that Hansoo spent building relationships with potential investors. I could always come up with thousands of reasons to defer a decision, but he would usually get his way, and we would take action. His way was the right way — make decisions and move forward — it’s why Magoosh is successful today.
In late December of 2011, I received a crushing email from Hansoo. “Hey Bhavin. I’ve been diagnosed with a rare form of lung cancer…” I could barely read on. I was 3,000 miles away visiting my wife’s family in Massachusetts, but my heart was with Hansoo in California. I didn’t understand. He was fit, active, and a non-smoker. He did everything right. How could this happen to him?
He stepped away from Magoosh operations as of January 2012, but he remained fearless about his prognosis and the company’s future. His positive attitude was infectious. I still can’t believe that during this time he provided me with support because he knew running the company as a sole founder would be difficult.
Unfortunately, his condition worsened throughout the year. Despite going through various advanced treatments, he faced complication after complication. Our weekly walks turned into monthly phone calls and then just the occasional email. I couldn’t imagine what he was going through, and I wanted to do more for him. But whenever we spoke, he told me to focus on Magoosh. He was watching from a distance and loved seeing the team’s progress.
On Monday March 4, 2013, Hansoo passed away due to complications from his cancer. He died in the arms of his fiancee and was surrounded by his family. We had spoken for nearly an hour just two weeks prior, and I’m grateful that we were able to chat then. I was able to tell him about his impact on me and on Magoosh.
Hansoo’s impact on Magoosh
Hansoo left a lasting impact on our daily lives at Magoosh. He was the impetus behind our daily standup meetings and the weekly one on ones between managers and employees. He cared so deeply about crafting an amazing culture and brand that he led us through an exercise to define our core values when we had only 4 full-time team members — we still hold those values dear today. He was transparent with our vision and finances because he believed in providing everyone with purpose and autonomy in their work.
I’m reminded of Hansoo everyday when I walk into the Magoosh office. Without him, Magoosh would not be what it is today, and I would not be who I am. We’ve grown into a successful business and have helped thousands of students improve their GRE and GMAT scores thanks to Hansoo. He was our leader, and we’ll miss him.
How you can help
To honor Hansoo’s memory, we have created the Hansoo Lee Fellowship. The Fellowship will provide a stipend and mentorship to help Berkeley-Haas MBA students pursue their venture full-time for their summer internship, as Hansoo did. Students will receive:
- A summer stipend of $5 – $10K
- Mentorship from Haas alums focused on entrepreneurship
- Office space donated by Magoosh
This fellowship is a realization of Hansoo’s vision. He always looked for opportunities to give back, and this is our way of celebrating him. To donate to the Fellowship, click here.
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