On Friday, March 29, 2013, OLC attended The Hatchery's event, Investor Series featuring Benjamin Sun, a seasoned entrepreneur turned angel investor. Sun is an internet entrepreneur, co-founder of Community Connect Inc. in 1996, creating AsianAvenue.com, BlackPlanet.com, MiGente.com, FaithBase.com and GLEE.com, collectively generating over one billion page views per month. Sun started Community Connect in his apartment with a team of friends. In 2008, Community Connect was acquired by Radio One, Inc.
Benjamin Sun talked about his background as to how he became involved in the internet community. He was born in New York, and considers himself a New Yorker. "I was born in Queens," Sun said. "And I went to school in Michigan. After college, I chose to be an analyst at an investment bank. At Merrill Lynch, I was part of the technology group and helped tech companies raise money. I heard about Netscape in 1995, which turned out to be a web browser. The whole investment banking department went to Cambridge, Massachusetts to get an IPO for Firefly. It was about 10 months old and it had about $70,000 in revenue. We went out there with a huge team and research analysts would check them out. The team evaluated Firefly at $350 million. The founders at Firefly said that it was too low," Sun said. It was at this point that Sun became super enamored with the internet.
"The internet was about communicating with people," Sun said. "It was an information super highway. But now, it's changed to a community highway. My friends and I ended up writing a business plan and designed one of the first social community platforms on the web. We launched our first company called AsianAvenue. People started coming on to the website and it was really exciting to watch. We put all of our money on servers, though. When 15 people would log on at the same time, it would crash our servers. It was a challenge to start a tech company back then. There was no New York venture capital firms," Sun said.
He said that he traveled out west to seek investors for his next idea that would target the African American demographic, but Sun revealed that he was laughed out of the boardrooms. "We went out west and people laughed at us because our next company was to venture out to African Americans and Latinos," he said. "We bootstrapped for a couple of months and luckily got some press. We got an investment from a gentleman who had invested in a biotech company. We raised $15 million. We launched BlackPlanet and didn't allocate any money to marketing. DJs actually gave shot-outs for BlackPlanet and Kanye West actually rapped about BlackPlanet. People actually got BlackPlanet tattoos," he said. "The communities as a whole was doing about 1 billion page views a month. In 2001, the internet bubble burst and we had all this traffic so I took a look at other business models out there and saw Match.com as the big one. My team and I built a dating platform. It was in development for three to four months and we launched the dating service. In 2002, a percentage of users would apply for the full use of the profile," he said.
"I was getting phone calls from the Army, MTV and from girl scouts. They asked me because they could not claim or target specific races," he said. Sun's websites ended up being the solution to the solution to skirting that issue. "We generated plenty of cash," Sun said. "I went to the board because I want to expand out into college, LGBTQ, Christian communities, but the board, they were hesitant because they were comfortable with the money they were getting. Another problem was that we had over 2 million lines of code. We had to rewrite the code because it was all based on old technology. The undertaking was about a year and a half. It was at this point that I received an invitation to Friendster. I realized that social media, especially community was going to launch quickly. I ended up meeting the CEO of Myspace and it turned out that Tom Anderson was a huge AsianAvenue user," Sun said.
Sun sold his company to Radio One Inc. right around the beginning of the financial meltdown. "It came out to be a good exit for the board in investors," Sun said. It was around 2008 when this event took place.
"I wanted to be involved in startups, so I started angel investing. I realized how difficult it is because we don't familiarize ourselves with the spaces. If I know more about what VCs know, then entrepreneurs are going to be more talkative to me and be more willing to accept me and it was more a synergistic experience," Sun said. "I ended up investing in dating companies, Facebook analytics companies and I want to know if entrepreneurs will be more willing to accept me and my brand," he said. "Facebook started doing something weird with its app pages,' he said. "So when I heard about Groupon, I picked it out and I started a Groupon-for-moms and raised $30 million."
From here, the floor was open to audience questions.
"What happened to Firefly?" an audience member asked. "Firefly was a suggestion-based company. It never went public and basically just about folded. Microsoft picked up the technology and the founders went on to do something else," Sun said.
"Ecommerce is getting big. Are there any other sectors that you're excited about?" a member asked. Sun listed a number of successful companies: Shutterstock, LiveTrading, FreshDirect, Seamless, Yext. "You fish where the fish are," he said. "I just need really good entrepreneurs in New York with a good team around them. You hire A-list managers so that they hire A-list employees. You don't hire B-list managers because all they're going to bring in are the C and D-list talents."
When asked about key takeaways that the audience should know about, Sun replied that entrepreneurs should have a laser-like focus. "Don't drink from the kool-aid either," he said and reminded everyone to recruit great talent.