On Thursday, April 12, 2013, OLC attended Ultra Light Startups: Investor Feedback Forum. Hosts Graham Lawler and Mark Caron welcomed the four panelists: Somak Chattopadhyay of Tribeca Venture Partners, Owen Davis of NYC Seed, Micah Rosenbloom of Founder Collective, and Peter Valhouli-Farb of Bessemer Venture Partners. The eight startups pitching were Nero Commerce (Daniel Buelhoff), SolarList (Tyler Tringas), Nutmeg Education (Jon Modica), UPlanMe (Sean Barkulis), FreshGrid (Edwin Baladi), Wavicle (Gregg Hill), Gift.Rs (Alex Mashinsky), and CreativeWorx (Mark Hirsch).
Daniel Buelhoff was the first to pitch. “We produce espresso capsules,” Buelhoff said. “We’re a Germany-based company and we’ve figured out that no companies do e- commerce well in the coffee business. We took the time to figure out how to make capsules and started making revenue in March. We’re a bootstrapped startup—I funded the company myself. Everything from social media to marketing is done in-house, which gives us a competitive edge. There’s been hardly any returns, so shipping and handling fees don’t worry us. The best part about us is that we’re already profitable,” he said.
Owen Davis asked if Buelhoff’s products were cheaper. “Yes, it’s convenient. It’s 30 percent cheaper and they’re quality products,” Buelhoff said. Somak Chattopadhyay asked what his gross margins were. “Right now, we have no funding. We need to focus on acquiring the first order. If we have money, we’d try harder to acquire customers. Our gross margins are about 30 percent,” Buelhoff said. Peter Valhouli-Farb asked what stops bigger companies from beating his company out in terms of sales. “They can’t afford to lower prices because they need to maintain their marketing division,” Buelhoff said. Chattopadhyay suggested that Buelhoff relate his pitches to the economics. “Think about if you can sustain your model in the long run,” he said. “I would think about the corporate market than the consumer market,” Davis said. “Brand matters to consumers. The reality is that I think you’ll have a hard time scaling in the consumer market. Try for the corporate market.”
SolarList presented next, with Tyler Tringas as the pitcher. “We’re going after the expensive solar panel system,” Tringas said. “The industry spends an average $5,000 on customer acquisition. We built software to tackle this problem of customer acquisition. We help homeowners go solar by connecting them with solar companies. We can then make a solar estimate in real time.”
Chattopadhyay asked how SolarList is able to make lead gen profitable. “We don’t think Google Adwords is profitable. It’s a slaughterhouse. We’re using a canvassing model. The industry also has set leads, which range from $50 to $200,” Tringas said. “Scope out your competition,” Davis suggested. “I also think canvassing will become expensive as you scale.”
Jon Modica pitched Nutmeg Education, an assessment education platform. “We let teachers collect data and individualize instructions for students. We’re helping teachers save time and effort. We don’t require school-wide adoption—we can be used by individual teachers. We’ve partnered up with Columbia University and our product will be rolled out to a few select schools in The Bronx,” Modica said.
Valhouli-Farb asked about Nutmeg Education’s unit economics. “Well, sale cycles are so long and bureaucratic that targeting individual teachers are the best course of action,” Modica answered. Davis asked about other assessment tools. “There is the manual mode of assessment, which is time consuming. Our competitors are far removed from assessment. It’s not as flexible as ours,” Modica said. “The power and pressure of better test scores means pressure on teachers. Maybe change up your business model. Free it up and monetize it after your raise test scores,” Micah Rosenbloom suggested.
Sean Barkulis pitched UPlanMe, a marketing brand platform. “People have a difficult time promoting themselves. UPlanMe is an easy way to push out promotions on social media. We added a code to make it easy for the owners to add calendars and events on their website. We have a network of sites and affiliates for owners to reach out to. That’s potential customers for them. Our technology saves owners time and money,” Barkulis said.
Davis asked Barkulis who his competitors are and why he started UPlanMe. “No one is doing exactly what we’re doing. There are companies like HootSuite that push out social media, but it’s not for websites. We’re marketing content and there are thousands of potential customers looking for technology like we’ve built,” Barkulis said. “It’s a really competitive space and there’s less vigor in daily deals. Look around for really interesting data that you’re going to get from your users and use it,” Valhouli-Farb suggested. “Pack a couple of verticals and stay with them. Go deep instead of going broad,” Rosenbloom said.
FreshGrad changed its name to FreshGrid and Roy Baladi presented the platform. “Manual hiring processes is time consuming. FreshGrid is a widget used during the hiring process. It captures information using 16 principles that the user rates him or herself with. It quantifies your abilities. It tells the hiring manager your skills and personalities in one easy go,” Baladi said.
Davis asked how FreshGrid would handle people who can’t assess their own abilities. “When you put yourself on a grid, you become more self-aware. People have an equal chance. It’s then up to the hiring manager to decide,” Baladi answered. Chattopadhyay asked why people would move to this type of system. “The software that hiring managers use has been static because of legacy software. For the first time, the No. 1 thing in the mind of the CEO is human management capital and it’s tricking down the company,” Baladi said. “I’d be interested to see if there is more to offer than what you are offering now,” Davis said.
Gregg Hill pitched Wavicle. “Wavicle is a quantum leap forward in game-enhanced learning,” Hill said. “It’s an e-learning platform. Learners are bored because the platforms are static. Wavicle changes all that. It adds the addictive aspect of gaming to learning. It connects training content to where and when you want it. It’s very simple to understand and use. We launched a two-year deal and signed with Citi,” he said.
Davis asked how Hill plans to focus the platform. “Vertically. We’re going to focus on finance, tech-first. We need to get to learning and development teams in those spaces,” Hill said. Chattopadhyay asked if Hill has data that supports the sales cycles. “The sales cycles are long, no doubt about that. In terms of how to connect and how to do it, we were hearing demand for this product. You can change your product on the fly, so everyone on your platform can see changes in real-time,” Hill said. “Your company has a lot of potential to be an agency business. If you want to be a product company, you need to pick and be focused in your offering,” Rosenbloom suggested.
Alex Mashinsky pitched Gift.Rs, “a new mobile app that solves a lot of shoppers’ problems.” Mashinsky says that Gift.Rs is allowing users and sellers to crowdsource items. “We’re allowing users and sellers to crowdsource items and let them purchase something right on the fly. You can pick items and get selection from sellers. Options are provided right on the app. It solves issues like payment options, inventory—it’s a unique process. A unique process that gives users social scores and higher the social score, the higher the item gets pushed on the trending list. We have to be ranking items consistently or else we lose credibility—and credibility is everything. As we scale, we’re able to fragment lists, catering to women, children, men, cities and regions,” Mashinsky said.
“Articulate that there is opportunity in the middle,” Rosenbloom suggested. “Talk about user-generated content. Look into ways to create a sense of virality and a sense that people need to participate—incentivize it,” Valhouli-Farb suggested.
Mark Hirsch pitched CreativeWorx. “We automate productivity, we bring your data in real-time and analyze it to provide critical insights when you need them. It is automatic, seamless process. It’s real-time dashboards and alerts. We’re hyper targeting agencies. It’s easy time tracking,” Hirsch said.
“Look into the timesheet space and see if the ad agencies or consulting firms are big enough to want this,” Valhouli-Farb said. “Ask yourself if saving that 45 minutes is really important to ad agencies,” Davis said. “’Timesheet Saving Company’ doesn’t have that sex appeal. It comes out as a timesheet investment company and investors might be scared of that vision,” Rosenbloom said.