On Tuesday, March 12, 2013, OLC attended New York Enterprise Tech Meetup's monthly event. The March event featured three demos from Ireland in the spirit of St. Patrick's Day. Datahug works by information you already have: communication data coming in and out of the business daily. With this, Datahug builds up a dynamic database of company-wide connections and uses analytics to show who is who. Waratek developed the first Java Virtual Machine specifically for cloud computing and Java as a Software (JaaS). It allows Java to run in a cloud environment without the need for code change. Preact is the first intelligent support and account management tool that integrates seamlessly into your existing workflow to accelerate and improve every interaction you have with your customers. Venture capitalist Ed Sim, founder of BOLDstart Ventures and co-founder of Dawntreader Ventures, was present for the fireside chat after the demos. Sim has 17 years of VC experience having led seed ad first-round investments in a number of high profile internet and software companies.
Datahug presented first, with Connor Murphy, the founder, giving the discussion. Datahug is a three-year-old company that has raised $5 million and is based in Dublin, Ireland. "Out core mission is to make the world a smaller place," Connor Murphy said. "Networking is the gateway job that helps get the real work done. Networking is important, but it's difficult. How can I tap into get more clients well the world works on who knows who," he said. Datahug helps facilitate what gets done. "Think of CRM [Customer Relationship Management] solutions optimized for the individual. For companies - 90 percent of company emails aren't captured by CRMS. Think of an expensive, shiny car, but you forgot to budget for data and for clean up and maintenance," Murphy said. Datahug analyzes all business and private information but only the headlines and not the content of the data. From the data pulled, the platform derives who is who. "It does it all automatically," Murphy said. "There's no data entry. It's surface data context when you need it and where you need it."
"Relationships touch every part of your business," Murphy said. "Data is automatically extracted from your contacts and is placed on a dashboard to get a sense of the time of the relationship and the strength of it too. It's scored and the insights are a great way for recruiters and consulting and for other relationship-based spaces," he said. A plugin for a browser can also draw information from a website to see if there are any connections between the organizations.
John Matthew Holt of Waratek presented next. Waratek is headquartered in Dublin, but started off as a research think tank. Now it has transformed into an infrastructure company focusing itself on virtualizing Java. "Java is an old language," Holt said. "It hasn't materially changed since it was first created. Java is now the language in the enterprise world, but nine to 18 months ago, people realize that Java has problems."
"JVM [Java Virtual Machines] are magic engines that's used to run Java. System administrators say that Java does not virtualize well. The virtualization tools are not less effective at virtualizing Java apps," Holt said. "To solve problems, it can't be fixed by modifying problems, it's by modifying the machines." Holt showed a graph where the cost per tenant using the Waratek JVM decreased as the JVM approached virtualization. The Waratek JVM is multitenant, metered, elastic, has no code change, more app density and less maintenance. "Waratek JVM is completely different than normal JVMS," he said. "It can run multiple Java apps at once and all are secure and isolated from each other. The most interesting thing is that Waratek allows anyone to write and change the language on the virtual machine."
Christopher Gooley, CEO of Preact presented his product as a customer analytics company. "We want to make sure information is available to you at all times," Gooley said. "Support tickets have to context to them at all. It's a long process to figure out what the customer was doing before you arrive at a solution. Preact shows what the customer was doing before and after they send in a support ticket," he said. Preact uses a sidebar to give information to the customer support team and it can see what browsers and what operating system the customer is using, facilitating customer support. The dashboard lists people who are actively engaged with the app.
"We're interested in the big data side of things," Gooley said. "Through the API, one can put a tracking pixel to log what a user does. For a specific customer for a specific company, Preact can show which customer is about to stop using your product, so you can take action against that. It's able to tell what account is in poor or good health." Preact is looking at developing an engine that looks at what leads to customer cancellation and to stop them from terminating service.
At this point, Ed Sim was introduced to the stage and host Jonathan Lehr acted as moderator to interview the venture capitalist.
"Can you walk us through closing a fund?" Lehr asked. "We started with BOLDstart Ventures on the side—it was experimenting with investing... We figured it was time to create a seed fund for enterprise and in 1998, we raised $10 million for data systems. Amazon launched a dataset today, and it was Amazon that basically ruined Sun Microsystems and Dell. Typically we invest with micro-investors and our goal is to help entrepreneurs with Series A funding," Sim said.
"What should entrepreneurs look for, going into Series A funding?" Lehr asked. "We look at ourselves as river guys," Sim said. "Look, here's your Series A and let's work back from there. It's figuring out what you need to develop and what you need to do to get it out there. We try to pre-work the whole thing to help you get to Series A."
Lehr asked about the Series A crunch and what mistakes Sim saw as a result. "Entrepreneurs are asking for too little," Sim said. "Our suggestion is to look for milestones that you need to hit. We know what the market looks like and so do our partners. We expect you to get 10 to 15 customers on your own and get capital."
When asked about what entrepreneurs should expect from him, Sim answered, "A small team of product engineers, probably three to four. We want your crown jewel at your company. It's also cost-effective this way," he said. "Go out and build your idea," Sim added. "Build something. It doesn't have to be pretty. Our typical profile is, we've done a couple of alpha investments. We don't want to waste your time. At the end of the day, you want a VC that's on the same level as you."
"How are you evaluating opportunities?" Lehr asked. "Our tag line is: Fortune Favors the Bold. For every investment, we want them to create the next big thing," Sim said.
Lehr asked if Sim remembered any memorable companies. "Failure is part of the process and you need to learn from your mistakes," he said. Sim gave an example of a company that he had invested in, but they realized too late that the business could not scale. "We had to scrap it and start from scratch. The founder put out $500,000 of his own money and we put up $1 million. We ended up firing the entire sales team and we did what we did. Entrepreneurs want to hire a VP of Sales—stop. Do you know who you're selling to? Learn more about your customers first. Then hire a VP of Sales," he said.
As a follow-up question, Lehr asked how entrepreneurs can attract customers without a VP of sales. "If you can't get customers yourself," Sim said, "you shouldn't be the CEO of a company. Everyone on your team, including you, should be able to sell the idea."
When asked about New York and what it was like in the 90s, Sim laughed and had this to say: "New York was a backwater place in the 90s. What New York has to do now is think about the next big thing. There are wonderful engineers coming to New York. This is where the money is," he said.
"Do you see any trends today that excite you?" Lehr asked. "The mobilization of the SaaS market," Sim said. "SaaS was sales force that used desktop-based experience. Saas 2.0 is taking it to mobile. You've got to be smart. We're talking about creating apps that are about intelligent filtering."
"What else does New York have to do to get a $1 billion exit?" Lehr asked. "Education. Just having more educators to teach people will help achieve this," Sim said.