On December 13th, 2012, OLC attended Ultra Light Startups December Investor Feedback Forum hosted by Graham Lawlor of Ultra Light Startups and Mary Howard of MIT Enterprise Forum. The event was held at the offices of Microsoft at 1290 Avenue of the Americas.
Eight (8) startups pitched their business plans to a lineup of venture capitalists (whose collective investments include LearnVest, ChallengePost, 10gen, 33Across and Tremor Media) including Nasir Ali of StartFast Venture Technology, Jay Levy of Zelkova Ventures, Paul Sethi of PKS Capital International and Matthew Witheiler of Flybridge Capital Partners.
First place finisher, Paul Grossinger of Pervasive Group, presented MMGuardian an application that helps parents manage kids’ smartphone usage. MMGuardian has over 50k downloads on google play and will soon be available for tablets. Witheiler felt that the historical issue with this product class was the user’s willingness to pay for it. With no prior exits in this market space, felt it might be hard to build a scalable business. Sethi suggested that with a large enough user base maybe someone else will pay for the product, either a carrier or a corporate who could upsell another product. Levy mentioned that similar products already exist for desktops, the needs for MMGuardian are to figure out carrier relationships and solve privacy issues. Ali reiterated needs for carrier relationships, also cited insurance implications, whereby an insurance offset pays for service and download-free options.
Second place finisher, Ed Boyle of Point Payments presented their technology platform allowing users to spend frequent flyer points directly at merchant web sites. The business is a front-end affiliate marketing platform with a back-end payment processing arm. As over $48 billion points are issued each year, PP estimates the potential market at over $2 billion. All of the VC’s agreed this product faced the challenges of a classic, two-sided marketplace.
Third place finisher, Alex Fair of MedStartr presented their currently profitable model for crowdsourcing for healthcare. Witheiler mentioned that the site looks exactly like kickstarter, asked if the crowdfunding model was the right model for the individual contributors and what would be the review process? He felt MedStartr needed successful, high profile success stories and super influential people to gain traction. Sethi asked how do you get eyeballs? He suggested using media and entrepreneur buzz as well as an influencer model such as Consignd. Levy suggested partnering with large corporates and being diligent about demonstrating transparency around where money is going. Ali saw a two-sided business model, self-serve vs. a service model and asked how will the firm balance and manage the scaling between the two models.
Also presenting were Luke Sherwin of Consignd.com, currently residing in the Blueprint Health incubator. Consignd assigns sales items to influencers in product categories and allows an influencer to scale tastes without having to hold inventory. Witheiler expressed concern that this was OpenSky’s original business model and he was not clear blog readers are in a buying mindset. Consignd will need to test the conversion rates of purchases. Levy felt that money may not motivate influencers and that the firm will need to figure out other compensation for them.
Ilya Zatulovskiy presented Applique, a recent Dreamit! Philadelphia graduate, demonstrate their product for converting powerpoint presentations into mobile apps. Their target customer is media company with many shows or channels and/or event spaces or organizers who have short-term needs/horizons for mobile apps. Levy suggested partnering to make the platform more robust. Sethi felt that product differentiation and distribution would be key issues. Witheiler suggested thinking hard about user acquisition and running appropriate market testing
Greg Schvey presented Aggregift, whose mission is to change the concept of social marketing. Gifting is a $6 billion market, primarily among 18-34 year olds. They are seeing average gift contributions of $10, occurring 8x/year and estimate needing 120-300k users to break even. Witheiler asked what Facebook is doing and expressed concerns over building a $1 billion business by accumulating 10% affiliate fees. Sethi asked what the customer acquisition strategy would be. Schvey estimates the average gift brings in 3 new users, which allows for an 8% growth rate. Levy suggested a drop-ship model, which would allow Aggregift to partner with existing sites and even sell an epayment service. Ali asked how returns were handled and suggested looking carefully at gift recipient satisfaction levels.
Anuj Gupta presented autoWorkout, an OpenTable for auto repair and maintenance. autoWorkout provides CRM/marketing tools for auto shops, an industry historically least-impacted by technology. The platform would be based on a freemium model, with premiums for marketing and other modules such as email and stand-alone websites. Witheiler expressed concerns that this was a fragmented, tech-averse industry and that they must focus on acquiring, scaling autoshop adoption of their product. Sethi asked how do you get multiple quotes and how do you get consumers to book? He suggested focusing on small geographies, in order to test the value proposition. Levy questioned the concept, suggesting that the pain point is finding trustworthy service providers, not booking an appointment. Ali also asked what problem is being solved? As there are over 175,000 auto shops and over half independently owned, autoWorkout needs to create a brand of trust, similar to Angie’s List.
Gidon Coussin presented Feelday, a Yelp/Foursquare for families looking for children’s activities. Feelday is attempting to build a marketplace and derive revenue from businesses via transactions. Witheiler mentioned a prior investment in Goby for local event search and suggested the challenge was monetizing growing traffic. Feelday must focus on customer acquisition. Also, mobile is very powerful in this space, the company needs to build a mobile app. Sethi asked what is solution for smaller marketplaces? He suggested marketing to the teacher community. Similarly, Levy asked how do you build traffic and make the product social? He suggested building a viral product, implementing the flock concept, creating partnerships with event providers and providing business/community outreach, all in an effort to build the user base. Ali asked how information was inputed to site and suggested indexing/normalizing data from other sites.