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Entrepreneur Energy – LaunchUp #27 20120301

LaunchUp had an attendance of about 70 people at Mountainland Applied Technology College. Thanks to all the sponsors, presenters and companies. During the presentations I learned some new things and was introduced to more new people. Keep it up!

PITCHES

Imply Labs – Zach Oates

Scott is my partner. I was getting email from BoomStartup email before, but then Xydo has sent them and now I am starting out each day with using the email because it is awesome.
When you walk in to a store there is this feeling that you get that is not the same as online. What would happen if websites didn’t just sell products but sold to people? “Here are some insoles for your shoes now that I see you ran yesterday.”
Our vision with Imply Labs is to create a more relevant world. We use Social Predictive technology and we translate streams to product definitions of what you want.
We built a demo of the product called “GiveEmThis.” It is a mobile app to help you find gifts for your friends.
When you connect on social media you can take a look at your friends and check out what they will want based on their posts. We have gift recommendations based on what they have posted.
The algorithms and technology that has come out allows us to do this. We use python API connections, Java, and Berkeley DB as the backend database.
We launched the company at Techcrunch Disrupt in SF. We were able to find the right product for 80% of people. We made quite a splash.
We went home and with all the traffic the server crashed and we got some good publicity. We are now in the discussion phase with some investors.
The gift industry is huge. We use GiveEmThis.com for 3 reasons
1) Generate data
2) Publicity
3) Traffic
Companies want to have a solid ROI from social media and want to spend less money per consumer. Consumers want high touch.
We are not a social shopping solution based on my friends choices. We will take information from Amazon as well. We want to provide more than just Gift widgets. We want it to be more than that. But Kosmix was acquired by Walmart Labs. They launched ShopyCat which is the same as what we have.
Hunch was acquired by Ebay.
We are just focused on working with Pinterest and Google Plus. From the company standpoint they can buy an in-house solution, license software or White label. We want to be the white label provider in this market.
ASK
1 Tech ninja
2 Introductions to ecommmerce/recommendation engines
3 Funding to improve
We just got back from SF tour and are headed for another one shortly.
zack@implylabs.com

Statement: I worked for an ecommerce company so I would like to talk with you after.

Q? Other than tracking purchase how are myeachring relevance.?
A. Purchase is the main result. 4% conversion for products purchase with our choices. We have a rating system on the site. We then look at click through on site or going to Amazon and we are working to improve this.

Q? Biggest funding obstcle?
A. Oen of the gibiggest things was theat they wanted to see more data … and show me more and more. OTHey then ask which big ecommerce are you working with. Fudning to exectue … so execute before funding.

Q? API for bring that in?
A. It is debateabl. So when is the API coming out. I want to build one but does tht hurt the business model. Perhpas feeding in content and then extracting ourt what you want.
There is something there and alot of interest.

Q? When you determine an intereste how do you match that against a product catlog , but which camera do you show?
A. We lok at information in 3 ways. Data, behavior a dn trends. We are We then cross over the technology and scrape to find out. If you are interested in running and cooking we might batch a running cookbook. We have a couple of different onese.

Q? Whey not serarch for purdcots directly? Is there anywa to work with them?
A. We covered ealeirwe are not building a social shopping. I am looking for books wfor my siste not for me. We have found that if we can offer people a benerit like suggesting a gift THEN people will give us their Facebook.

grasswire – Austen Allred

This problem graph is the number of newspaper workers that are employed in our countries. Over 50% of these people have been laid off. And so there is a lot of news writers that are not employed. So this is a great opporutnity and just needs a new strategy. As we have been talking to freelance journalist they are trying to sell to companies and it takes a lot of time. 60% writing 40% selling/hustling their product. We are going to create an istockphoto for news.
There are a few different steps that a story has to go through. The freelancers want an editor, cultivation and distribution.
#1 – Editing: Normally you get a bunch of people together who do quick editing.
We are going to to hand over the editing to readers. You click once and it brings up an editor. You can fact check and become a participant in the news. Then the author can look at the suggested edits and keep or challenge.
Once it is live then people can see the revision. So instaed of 15 pro editors, you are letting the readers do it.

#2 – Curation is a question of what goes where (front page etc). As a general idea we chose Upvote versus hackernews, EdiReddit and Digg.
But we started from scratch. You can Upvote or downvote each story.
Based on the karma you have you will have more weight in the vote. If I have 1,000,000 karma I will have better vote and sway.
#3 – Distribution.
Writers will want to have an audience. Our first step is to license to newspapers and publications. We allow a news editor to download based on if they are willing to pay fee.
Then you can pick it up to not only license news, but to read it.

EFFECT
Meritocracy for the best news wins.
No more selling for journalist – only writing. They are businesses.
News organized best to worst for readers/buyers
News is democratized

ASK
1 newspaper licensing
2 help with beta test (grasswire.com)

Q? You mentioned karma and how to build up?
A. We have to look at that as we go. We don’t have an app right now but we will look in to it.

Q? How do you incent the editors to edit?
A. If you could change something as you read there is an incentive. We haven’t proven that it will work but we think so.

Q? karma is time or clicks?
A. We didn’t have time to answer that fully but basically the comment is done through comments and edits. If the edit is approved then your comments will move. The comment karma is based on the tags for that article. So if I am good at entrepreneur I won’t have karma in foreign policy.

Q? A lot of publications AP and Reuters 70% is already syndicated?
A. A lot of those syndicated AP and other we would be in direct competition with. We can compete on quality and price point. Since we have an upvote system then people can find out who is the best source. They get garbage from so many angles. If there is merit then it should be an easier sell. But that is another thing we need to validate.

Q? How do you see industry in 10-20 years?
A. I think the Reuters may be gone. There is a flaw because of technology. But the costs that go in to a system like that can’t compete with lean journalism. That is why Huffington Post makes millions of dollars. They are not lean enough to make it so they will go away.

Q? You wanted to contact to validate but why not get newspaper to license from you?
A. I have talked to a couple that are looking to get content in and costs down they are happy. Their content is not the way it used to be. One of the reasons that freelancers are running they are just filling up the paper with fast content versus high quality.

Q? When is the mobile app coming out?
A. It is a long way down the road since we need more work on the web first.

TextMeTix – Mark

I get the sense that there is a lot of intelligence in this room. This is the second time that I have done his. Yesterday I was at the UStar. I got to meet some of you here earlier and you are where I was about a year ago. There are some familiar faces here.
We launched on July 24. SLC Bees gave us 30 tickets. We then sold 107 tickets for them on their last game.
Before this I was Director of Bus Dev with RockStar Shows.
And also Director of Sales & Marketing – Utah Flash
With Utah Flash I got to understand distressed inventory and the hard facts about getting butts in seats. Empty seats is a huge issue.
SPORTS Pain:
It devalues the experience for the Fan if they think that it is not a well wanted experience.
Leaves money on the table
Relationship with sponsors is hurt too beacuse they want audience.
CUSTOMER Pain:
Ticket Cost pain though is that it is too expensive
Service Fees are terrible
Inconvenience of one person having tickets and then you are late to the game that your friends are going with you to. There are big ticket sellers that want to control this but consumers want something they can use now.
PROMOTERS
Devalues the product
Competing events – If I have a competing event against other venues.
Lack of excitement – Utah Jazz in the middle of the week with New Jersey Nicks
Bad Weather
Seat Upgrades and Bounce Backs – if it is windy you may still buy the $35 ski pass because we sent it to them
94% of text messages are opened and 90% are read within 3 minutes
This is a great chance for a viral sale.
Jazz gives us last minute 500 tickets at $10.00
10,000 subscribers
50% off Jazz tix
800_+ tickets sold around $28.30 average price
TMT Now
We have hovered around 2500 to 3000/mth revenue. We want to get this out to New York as soon as possible
We have had 25 deals to date
2500 advertising
Competitors but don’t do last minute sales
GroupOn does not allow the last minute drop of offers and they are tying the hands of the venue.
ASK
$500,000
Intro into to large market (NYC)
Sales team
Development
Marketing

Q? Do you work directly with the venues or with someone like Meadowlands or MetLife fields?
A. With the Bees we came on as a sponsor and they let us buy on consignment and risk. Typically we will go find who is in control of tickets and we send out the blast. We take 25% of the revenue we generate.
We could become our own outlet if we wanted to in the future.

Q? What marketing activities have you built for this growth?
A. At event PA reads. With KUTV news we gave away “An Experience with Taylor Swift.” They also would want to take drumsticks from concerts.
The Orlando Magic was doing that as well. At a large event, text in your message that will appear on the Jumbo Tron. People love that.
“Thanks for taking me to the game.” All the while that is capturing information about the people.
At Events it has gone very well.

Q? Is your primary cost getting consumers or suppliers?
A. That is a great question and my brother asks me it all the time. Who is your end consumer? It is a little bit of both . This is the Place Monument or Hogle Zoo are some other customers. Most people think concerts and other venues. But we do well at Haunted Houses, Amusement Parks and Expos.
To your question when we go to the Zoo they get excited about 10,000 people seeing their promotion. We need to grow a bit more for the larger tickets. What we do when we have spoken to Claye Jensen at Utah Jazz he says come back when you get 100,000 or 600,000 subscribers.

Q? Are some of the promoters or venues worried about devaluing ticket sales because some may wait for the deal?
A. Spontaneity is about getting the people who are on the fence to buy. If they don’t know it for certain then they get the random surprise.
KSL approved us about 10 days ago and we are working on a new affiliation with them. If you like the Utah Blaze then you might think about looking at our site for the game on March 24. I don’t know for certain but….

AMP Session
Robb Kunz – BoomStartup
I am the cofounder of BoomStartup and also Venture Blue Capital. I want to talk about why it’s a great time to do a startup.
Up at the top of this slide is the word “Community.”
We have LaunchUp. The E is for the Salt Lake Entrepreneur community. They went from 0 – 900 in just a couple of months so they are exploding. Utah Startup Marketplace is another place to look for help. They are a great group to get interns and college people to help you.
On the Right here you have “Knowledge” and there is a ton of information on the web. This market is moving so fast. I have never seen it be so fast. You have to continue to listen to the thought leaders who are just sharing it all on the Internet.
This week in Startups.
Mark Sister is a big blogger with Venture Capital (techcrunch, Feldthoughts, Foundry, Teschstar.
David Chosen answers all his email!
Here on the bottom left is a movement with “Lean Startup.” IT is the cheapest now at this time with the cloud services but also the Business model is startup so fast and lean. Don’t bother with the business plan. Use a Canvas and have customer driven development. With these techniques and tools you can make it go. LeanLaunchLab.com
If you have two founders or less then you can walk through the whole process. They can help you track what you need to do to get validation. These tools help you drive the new process. This will help to get your company started.
“Acceleration”
YCombinator, BoomStartup, techstars, StartupAmerica Partnership.
accelerator.rs is a central place that will feed the networks.

People actually can donate money and you can get money off the KickStarter. We will see if some can make it.
This is not legal yet, the unaccredited investors can invest in you. Try to get Angel Rounds and you will see that you have a 3% chance of getting funded. These opportunities for crowd funding are coming up and growing.

Kickstarter, Anglelist, Indie GoGo, SLC Angels, Park City Angels, Utah Angels, Dixie Angels.
These guys are starting to syndicate deals with each other. That is huge for you guys trying to raise money. Once one of them goes in they are bringing in the other groups.

AngelList is my favorite new web property. This is like Facebook for investors and entrepreneurs. You can post your profile on AngelList. There was a company here in Utah. This company posted their project and Kalcanis was looking for storage. This company had been reading his blogs and knew that so when they shared their information with Kalcanis he picked it up and it got serious attention. That network allows them to share and that can fund companies here in Utah. This is the best time to get out because of the changes.

Questions: Boomstartup?
A. We are taking applications now. $100,000 per company in cash and services. This will be for 10 companies.

Q? What kind of equity stake are they looking for?
A. Good question. Most accelerators want 6-9% Here in Utah it is a clear 6%. It is just common stock.

In the Weeds
XYDO
These guys can make your company look really big. We do content marketing.
Content is King. Content marketing is the only marketing left. It is harder and harder to get your story told. Whatever you subscribe to you know that you have too much in your inbox. You have to clear spam.
Most organizations have no idea to how to communicate to their audience.
We provide services to identify content that is relevant to their business and who their customers are. We match that with what the company wants to be. So then the company pushes that via our API and other areas the information is relevant. So when a company like BoomStartup or RockFund has an email they want to send out, then we build that for them and it covers their business information.
Because of what we do instead of the normal open send, they get 1-5% normally. We will curate 10-12 article in an email for 36 companies.
We sent 20,000,000 email out last month. The first send is 500-800% increase based on what we do. Then clicks are shared to social and other places. It’s just a bit of rocket science based on what is just accelerating but really it is about getting your audience what they want.
The open rate tends to stay the same for the first couple of sends but then it increases as users see the value of the email.

Utah Jazz is one case study. In the first 30 days
5.8x click rate improvement
4K clicks back to their site (including ticket packages and co-branded content)
1K shares to FB + Twitter
They chose to put us in place of their email newsletter. What we have done with them is track all their players handles, mentions in the news and NPOs that there are associated with. We scan for all that and produce a nice email.

Gossamer Gear after first 30 days
49% average open rate increase
31% average click rate
2.3K clicks back to their site
So that is huge for their own business but it was growing their 5000 users to another level.

Lendio first 30 days
5.9x click rate improvement
12K clicks back to their site
3K shares to FB + Twitter
They had over 100,000 email addresses. They knew that they had been abusing them over the last number of years. In their case providing content that matched the audience increased the interaction including the clicks on their site.

What we do as a competitive advantage. The Web’s content + Social Signals are fed in to what we have. 300-500K articles. We match that with the social. We give points for that content when anyone tweets or shares it.
So we then send those out to the channels.

Q? Curious how you pivoted from consumer to business?
A. Eric and I started 2 years ago. It was really a consumer business. We were interested in news and wanted to come up with a way to better organize and prioritize news. You all read something and our goal was to be able to see my interests and sources and rather than remembering them all couldn’t I get some priorities?
We started as a consumer site building a social site on top of our engine. Through the evolution of a startup consumer businesses are hard but having raised our first round and wanting to get to the next round we wanted to get revenue.
Through experiments we discovered that the one thing that our users loved was the email that we sent out on a daily basis.
So we decided to do our own email and saw that this was going to our users. 40% opens, 60% clicks and tons of action.
So then we decided to curate and white label for a business and charge for it. Through some early pilots we proved we could do it (Lendio). Through the success of that we made the pivot.

Q? Engagement over time?
A. We wondered if we would see a drop off. But we haven’t seen it drop over time. We have incorporated that in how we on board new companies. The National Wildlife Federation is coming on soon as well.
On their first email they won’t believe it after the first one. We tend to test them as a first trial.

Q? Pricing model?
A. None for the consumer. The consumer model of getting users makes no money. Now it is based on a monthly recurring service. Right now it is just a flat fee.

Announcements
Grow America Springboard
$1 million competion with cash and prizes for Utah Businesses awarded in next 12 months.
Founded by Alan Hall – Zions Bank and Comcast
Phase 1 is March 13-24 must describe your business in 140 characters
3 total spingboards. First springboard culminates on May 20th 250K in cash and prizes awarded then
Winnings are a grant not an investment. Idea startup or rampup are eligible.
March 13 press conference
www.growam.com/springboard (launch 3/8)

Kisstixx 3/2 6pm party at the UCCU Center free event

Mobile App Converence. Ogden City 3/16

Next LU#28 at BYU 4/5/2012

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