Tag: startups (Page 8 of 10)
Running a technology startup takes perseverance, money, luck, talent and the ability to adapt quickly.
That’s the takeaway from Bill Boebel’s Startup Ignite talk at the Geekdom in San Antonio Friday night.
Boebel, now an angel investor and managing director of Capital Factory in Austin, gave the audience of about 60 people an overview of how he co-founded Webmail.us and later sold it to Rackspace Hosting.
In 1999, Boebel and his friends, Pat Matthews and Kevin Minnick, founded FieldParty.com, which created searchable city event directories. They dropped out of Virginia Tech University just 20 hours short of getting their degrees to work on the business full time. FieldParty.com raised $120,000 in angel money, largely from friends and family, and on March 10, 2000, the website launched – the same day the Nasdaq started crashing when the great Dot Com bubble burst.
“The world changed the day we launched,” Boebel said.
Immediately, potential investors stopped returning calls, he said. “The website was live in three cities: Blacksburg, Charlottesville and Harrisonburg, Virginia.”
That’s when the company changed names to Exedent Technologies and pivoted from searchable directories to creating content management systems for events for newspapers. The company landed 20 customers paying $50 to $100 a month.
Exedent gave away the product for free to the Virginia Tech University newspaper to serve as a reference customer for other newspapers. The problem was “the newspapers didn’t understand the Internet,” Boebel said. “They thought it was a threat to put their content online.”
So Exedent created a general-purpose content management system.
“It was a pretty cool product at the time,” Boebel said.
But Boebel, Matthews and Minnick had $100,000 in credit card debt and the company was running out of money. Exedent laid off its entire workforce except two employees who received minimum wage.
The company pivoted again into a company that would “do anything for a buck” including content management systems, webmail hosting, search engine optimization and website development.
“We would do whatever people would pay us to do,” Boebel said. “With each change we had confidence that this was the right path.”
Then, the money just about ran out and Boebel said he “thought about quitting.”
Matthews took a job selling books door to door. Minnick took a regular job to support his family. They all decided to go back to college and work crazy side jobs to keep the business afloat. They moved the offices into the basement of a townhouse.
In 2002, they got lucky. Spam and viruses started to plague people’s email inboxes on the Internet. The company started heavily promoting its secure email hosting services. Boebel, using his search engine optimization skills, secured the top keywords for “email hosting” and “webmail” on Yahoo.
“Overnight, it started to become clear that the email thing was a thing,” he said.
In yet another pivot, they added a “c” to the company’s name to create Excedent and decided to focus exclusively on email and “build the most kick ass email company.”
“We had only $1,200 in the bank and no credit to draw from and servers to pay,” Boebel said.
Its bill for Server Vault, a hosting service, cost $1,200 a month, he said.
Luckily, the company landed its first major customer and asked for a $50,000 prepayment. That along with $30,000 raised from a private investor and a $50,000 bank loan from a friend, and the company was funded, Boebel said.
They took advantage of the fact that big companies didn’t quite understand that if a company had a professional looking website that they could still be in the basement of a townhouse, Boebel said.
Also, for two years, they paid pennies for search engine keywords that led to “awesome leads” and customers, he said.
At the end of 2002, the company had $250,000 in revenue. Minnick quit his other job and went back to work for the company full time. The next year revenue doubled with 1,200 customers. They ran a lean operation, Boebel said.
“Lean wasn’t cool back then,” he said.
In 2004, they rebranded the company to Webmail.us and focused on the small business market and partnered with Rackspace as a reseller of its services. Webmail.us had more than 500 resellers. It moved its servers from Server Vault to Rackspace. They also moved the company to the Virginia Tech Research Park and switched from a Windows-based system to Linux and open systems. By the end of the year, the company had $1 million in revenue and 4,000 customers and eight employees.
At the end of 2004, the company also raised $500,000 in venture capital from local angels and Pat Condon, a founder of Rackspace.
In 2005, the company had revenue of $2 million, 13,000 customers and 25 employees. Webmail.us was the place work in Blacksburg, VA and the company got its pick of computer science graduates from Virginia Tech University.
Then in February of 2006, Google launched Gmail, Webmail.us’s first real competitive threat, Boebel said.
Despite the threat from Google, business continued to grow. By the end of 2006, Webmail.us had $4 million in revenue and 30,000 customers.
In 2007, Webmail.us was looking to raise $3 million to expand the company’s operations, but it never closed on the round, Boebel said. Instead, Rackspace acquired Webmail.us in September of 2007. That year, the company had made Inc. 500’s list of fastest growing private companies, ranking at number 217.
When Rackspace bought Webmail.us, the company had revenue of $8 million, 72,800 customers and 65 employees.
“By this point, Rackspace was our largest reseller and we were their fifth largest customer,” Boebel said. It was Rackspace’s first acquisition.
“Essentially, we had the autonomy to run the hosted email business inside Rackspace,” Boebel said. Webmail.us moved customer support to San Antonio but continued to grow the Blacksburg offices.
From 2008 to 2010, Boebel worked at Rackspace and continued to double the email hosting revenue annually. He left the company and moved to Austin two years ago.
Austin has a more developed ecosystem for startups than San Antonio, Boebel said. It’s also a great place to raise a family. He is married and has a two-year-old son.
“A lot of things are happening in San Antonio, but not a lot of things are bringing it together,” he said. He said he hoped Geekdom would change that and serve as a catalyst for San Antonio’s technology community.
Today, Boebel acts as an angel investor in several technology startups, primarily based in Austin. His investments include WP Engine, a WordPress web hosting site and InfoChimps, a data management business.
His investment criteria centers on the people behind the startup.
“I’ve just got to really like the team,” Boebel said. “I definitely look for ones where I get along with the team really well.”
At Webmail.us, the founders hired people they liked and wanted to hang out with after work. That’s the same strategy Boebel uses in his investments.
(Rackspace is a sponsor of SiliconHillsNews.com)
Who’s got $47.6 million in new financing?
That would be Apollo Endosurgery Inc. The Austin-based medical device maker announced that it has landed a big round of funding to develop its line of minimally invasive, scarless surgical procedures.
Apollo Endosurgery’s investors include Novo A/S, Remeditex Ventures, CPMG, Inc., PTV Sciences and H.I.G. BioVentures.
The company will use the money to launch its OverStitch Endoscopic Suturing System and other flexible surgical tools that allow surgeons to perform numerous procedures without making incisions into the patient’s skin.
Joshua Baer, founder of the OtherInbox and founder of a gazillion startups, has a new venture he’s heading up. He has joined with a handful of people in the Austin technology community to create WeAreAustinTech.
Each week the site will highlight an “icon” in the Austin technology community in a video interview posted to its site.
“The past two Saturdays I’ve been huddled under hot camera lighting with Toyin Akinmusuru, Ruben Cantu, Rene Lego, and Austen Trimble interviewing some of the top movers and shakers in the Austin tech community who also happen to be many of my idols,” Baer wrote in his weekly Startup Digest. “It’s been an incredible experience and we’ve captured unique and moving content. We will be unveiling the site soon, but for now you can follow us on Twitter @weareaustintech and Like us on Facebook.”
ChooseWhat guides entrepreneurs through the process of starting up a business.
And now the Austin Technology Incubator has announced a formal partnership with ChooseWhat.com.
The Austin-based company, founded in 2007 by Gaines Kilpatrick and Leo Welder, seeks to solve problems for small business owners such as how to get the best deal on a fax line or phone service provider or tax service. ChooseWhat.com has set up a special site tailored to the needs of ATI’s technology companies. My favorite piece of advice? How to choose a coffee maker.
uShip took the top prize in Austin’s inaugural Startup Olympics competition Saturday at the uShip headquarters. BuildASign.com captured second place and Sparefoot came in third.
We’ll post a full story and a video later on, but for now, here’s some photos from the event.
The Greater Austin Chamber of Commerce has culled through its list of Austin startups and tapped into its Technology Partnership to come up with an A-List of startups for 2012.
The shortage of technology workers in the Silicon Hills region continues. The Austin American-Statesman today reported that the recent trip technology CEOs from Austin took to California didn’t result in any new employees moving to Texas. Perhaps that’s why San Antonio-based Rackspace recently opened an office in San Francisco. The technology companies have to go where the talent resides. Also on Saturday, Rackspace held a recruiting event called Rackerpalooza at its Austin office. Rackspace also recently expanded its San Antonio headquarters.
On Friday, Dirk Elmendorf, one of the founders of Rackspace, gave a talk at San Antonio’s Startup Ignite’s third monthly Hack-a-thon at the Geekdom in downtown San Antonio.
On Wednesday, Austin-based Portalarium, which makes games for social networks and mobile platforms, announced its first social network game, Ultimate Collector: Garage Sale. Gaming Legend Richard Garriott is developing the game, which will be available for a beta release later this year.
Also on Tuesday, the Austin American-Statesman reported that a group of investors including San Antonio Billionaire Red McCombs has invested $1.75 million in an Austin-startup called Bypass Lane, which has created an app that lets people order food and drinks from their seats in a stadium while watching an event.
On Tuesday, the University of Texas honored 40 inventors including Professor John Goodenough and Professor Adam Heller, pioneers of lithium batteries, according to this post from University President Bill Powers.
On Monday, Gowalla’s founder Josh Williams officially announced that Facebook had acquired the Austin-based start-up, but it didn’t acquire the company’s data. It mainly wanted their development team. The Austin American Statesman had a story on the acquisition and didn’t mention anything about the $10 million Gowalla raised in venture capital. But Michael Arrington at Uncrunched reported that the deal might be a liquidation and it was uncertain if investors would get their money back.
On Monday, Globalscape of San Antonio bought Tappin of Seattle in “a deal worth up to $17 million,” according to this story in TechFlash.
During the first One Semester Startup at the University of Texas, 75 students formed 20 companies.
Thursday night, the students behind those newly formed ventures pitched their startups to about 200 people, some students, university faculty, press, investors and entrepreneurs, gathered at the University of Texas stadium’s Red McCombs End Zone Club.
The pitches ranged from game apps to financial software to a solar powered car docking station to a new car company that wants to make 100 mile per gallon cars. The ideas centered around social networking, mobile and clean energy industries.
Professor of Innovation and Murchison Fellow of Free Enterprise Bob Metcalfe led the class along with Joshua Baer, entrepreneur and computer science specialist and John Butler, director of H.K. Entrepreneurship Center.
The class focused on fostering entrepreneurship among undergraduates.
Throughout the semester, about 50 mentors volunteered their time to help the students. They also got to listen to advice from successful entrepreneurs like Michael Dell.
Dell, who founded his computer company in his UT dorm room and then dropped out, spoke to the class a few weeks ago and shared his entrepreneurial experiences during a question and answer session with Metcalfe.
Out of the 20 companies, two admitted Thursday night that they would not continue beyond the end of the semester.
Elben Shira with VisualKite, a social media dashboard for businesses to display tweets, check-ins and promotions, told the crowd that the team of three built and then tested the concept and then decided that it would not work.
“We couldn’t figure out a way to scale,” Shira said. “The value we could produce was not worth the cost.”
All three of the founders are graduating soon and they’re going to work for local startups. Shira, a senior in computer science, graduates in a few days and will go to work for Mass Relevance.
He hasn’t given up entirely on entrepreneurship.
“It’s always in my head,” he said. “I feel like it’s inevitable that it will happen.”
Shira wrote a blog post a long time ago blasting UT for doing a poor job of fostering student entrepreneurship. So when he heard about the class, he signed up right away.
Magis Isotopes, which involves the magnetic separation of isotopes, also bit the dust.
Mariel Bolhouse, a senior in biomedical engineering, worked with a physics professor on the idea, which she brought to One Semester Startup.
“We’re working hard today to solve yesterday’s problems tomorrow,” Bolhouse said during her pitch.
The university funded the venture with $400,000 in research money, but it will take three years before the technology is ready for commercialization. Bolhouse will graduate soon and move to San Francisco.
“I’m going to find another startup,” Bolhouse said. “It’s something that I enjoy doing.”
The experience she gained in class has ignited her entrepreneurial spirit.
“It was a really good learning experience,” Bolhouse said. “You get to learn the business by doing it.”
Solspot plans to continue on and is already working on a prototype of its electric vehicle solar car charging station.
“We believe the future is in solar energy,” Agee Springer, chief engineer for Solspot said. “We also believe the electric vehicle is part of that future.”
Solspot is working with an electric vehicle manufacturer in India to create its canopy car charging stations.
Solspot breaks ground Jan. 4th on its first prototype at the J.J. Pickle Research campus. The structure will be complete by the end of February, Springer said. He expects to have the final model in production by fall of 2012.
One Semester Startup gave Solspot connections to further its product.
“We had already been incorporated when we joined the class,” Springer said. “We were struggling to find our way and now we are way further along.”
To date, Solspot has bootstrapped its venture, but now the company is looking for angel funding, Springer said. One member of his team will participate in the next One Semester Startup, he said.
“It’s been a really fantastic experience,” he said.
Solspot also worked with mentor Julie Haugh, who runs a solar power monitoring systems company Greenhouse Computers. Her solar technology helped Solspot develop its product, Haugh said.
Laura Beck talks with Raj Mistry, CEO & Co-founder of MowGoo
Predictable Data, which corrects, standardizes and appends missing database information for marketers, also plans to continue. The idea began when Dwayne Smurdon and Tye Harrison entered a hacking competition and came in second. They decided to take their idea into
The team behind Predictable Data
“It’s helped us to meet the right people at the right time,” Smurdon said.
Ben Dyer, chairman of TechDrawl and a mentor, applauded the class overall.
“I thought this was an extraordinarily well done course,” Dyer said. “I think there will be several real companies that come out of this venture.”
Zilker Motors was one that Dyer helped mentor that he thinks has a bright future. The company headed up by Mark Wise, a senior in finance and Chinese, already has $50,000 in angel funding and its first customer. It’s building the Z-100, a car that can go 100 miles on one gallon of gasoline.
“They have a lot of momentum,” Dyer said. “They’re hell bent on making a successful business out of it.”
Zilker Motors needs $9 million to take its car to market. It’s currently raising stage one funding of $500,000 and another $500,000 during stage two, in which it plans to complete a prototype within 9 months. The cars will sell for about $55,000 to $60,000, Wise said. He needs to sell 1,080 to break even.
“What One Semester Startup has helped us do is get us involved in the local investment community,” Wise said. “Also, the wealth of knowledge and experience the mentors bring is just phenomenal.”
The next One Semester Startup begins in January and Baer, one of its creators, plans to change a few things. He wants to attract students who already have a company underway. He wants people who are passionately committed to their project.
“I think this class really exceeded my expectations in some ways. The university made it easy for us to work. Overall, I was impressed with the students” Baer said.
Some of the companies will get angel and venture funding to continue on, Baer said. A number of venture capitalists and angel investors attended the pitch session.
The UT band practiced while the companies pitched.
Next semester’s class will have fewer students and fewer companies, Metcalfe said. He’s looking for well formed teams to work on companies together. Some of the students in this class had varying levels of commitment to the project, he said.
Russell Hinds, an angel investor, mentor and managing director of RSH Ventures, thought a lot of the companies were too early in their development for funding, but he planned to follow a few.
“It’s like a rock band, you don’t know it’s going to last,” Hinds said.
But Hinds praised the students’ innovative ideas.
“It’s nice to be on the cutting edge of new ideas that are coming into this world,” Hinds said. “This is the birthing place for new ideas.”
Startup Texas launched today.
With Michael Dell on the board of Startup America, it’s natural that Texas is one of the latest regions selected by the organization to help foster entrepreneurship.
Startup America launched earlier this year and is a private-public partnership initiated by President Obama and the White House. But Steve Case, CEO of Startup America Partnership, sees the organization as rallying private companies to help spur innovation and create jobs through startups.
The Startup America regions already include Colorado, Connecticut, Florida, Illinois, Massachusetts and Tennessee. The Austin Chamber of Commerce is spearheading the Startup Texas effort. Its goal is to provide more jobs in central Texas and the chamber plans to provide funding through its Opportunity Austin initiative.
“Cities like Austin prove that as young companies are founded and grow, they create the jobs America needs right now,” Case said a in news release. “We’re thrilled to work with the Austin team to initially launch Startup Texas, and look forward to integrating our resources and reach throughout all of Texas, with its formidable and well-established culture of entrepreneurship.”
John Price, CEO of Vast.com will serve as chair of Startup Texas.