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Entrepreneur Energy – LaunchUp #38 20130307

LaunchUp had a good group of well over 50 people at Mountainland Applied Technology College. Thanks to all the sponsors, presenters and companies.

PITCHES

Betacave.com
What is the biggest challenge companies face today?
As we discussed earlier tonight it is finding and hiring top talent. Most of the top talent is working for someone or is not applying for open positions. A lot of you know this. We have done this ourselves. At betacave we are improving the hiring process. Here is a quick video.
We are from San Diego and grew up together and joined together now to solve this problem.
We have a custom algorithm to find the best opportunity. Explore or not. When the talent is ready to engage then the company is connected. This is where talent meets opportunity.
If you are a talent you sign up for free.
Our algorithm goes to work. A company can engage with these people. Privacy is key for this to work. I am a developer and I know how you can be hit by recruiters. You have control of the information.
Our goal is to be the platform for talent to see what’s going on. We are integrated with crunchbase, angelist, github, linked in etc. From the company perspective we want to help with the pipeline management. Most of our competitors think “yes or no.” But hiring is an ongoing process that you have to spend time and energy on. It may take more time before the talent is ready to engage. LinkedIn is where you go to hunt down the talent.
You can find things but we are re-aligning to a fishing model where you are hooking the talent versus “hunting” model.
We put up a site a few months ago. We didn’t spend anything on marketing and the feedback was tremendous. We are building our product now and will launch in the summer. So hopefully you will sign up and be part of the pre-launch.

?Q – of those 600 how many were employed?
A. The majority of the people were already employed. Some said, “can you help me find a job now.” You can go to other sites for that. How do you get access to those people?
You have to prove that we are not going to share the information. The other way is to sponsor developer user groups. Also we think a little more grassroots but it will not be the the same as LinkedIn’s.

?Q What is the screening process? As I have thought this through. I’m on a couple of lists and get inquiries. How do you avoid boxing in the profiles or over pushing from companies?
A. We can’t bombard people with these jobs. The more information the company will provide us then we will be able to match them with people. If we can’t find other sources for the company then it will be knocked down.
Other people for that job goes out then that job will get pushed down. We only want to send out jobs that people will be interested in. That will be based on your feedback. We can see what jobs you are responding to.

Q? How do you verify skills and other things like game sites. How about lying on profile?
A. It’s interesting that approach from LinkedIn is interesting. I am getting endorsed for skills I don’t have from people I don’t know. There will be reverse feedback from the company. If you apply it doesn’t mean you will get the job.

Q? I have some headhunter friends. How is $100/month per company going to be viable?
A. That recruiter is struggling because they had the golden Rolodex. But companies can go direct to the person on LinkedIn. Everyone knows that this area is ripe for disruption. This model is MoneyDesktop could have an ad and they are paying us monthly and even if we are not going to fill a position we want the ad running and want to touch their pool.

Q? How often am I contacted?
A. We will have settings on that. Some of our competitors will maybe send a new email for each company. But we still be the lever of when that can go out. Realistically we may only send 1 / week.

Vicci
Billy Bush – CEO
Guest intelligence for hotels. Hotels are fighting significant comoditization. They are being weighed down by Online Travel Agencies which creates pricing pressure. For commissions they pay around $38,000/month to Expedia to keep hotels filled. They want to maintain loyalty and re-booking. They want you to come back. If you can win the 20% of the travelers who do the travel then you win.
Playing the Game of “Know.” This needs to be the right experience and marketing. Something that speaks to you as a guest. What is more memorable. If wine comes instead of coke then you win or lose based on what they like.
If you are coming to SF 12 times per year then you will grow.
We pull in all the information that hotels have. We layer social and online data about the guest as well as other records so that the hotel knows how to serve you best. They also can have this at the CRM system.
It takes significant labor to find that information. We want to maintain that knowledge with the property versus just the person. We also can help the hotel know about localized events etc. The staff will deliver the information but Vicci is doing the labor.
When you get in to the system you will see who they are.
VIP Scoiing as well as other information. Do you do a lot of “yelp”ing or trip advising. They can then look at the drill down on the person, what do we know or want to know.
They can drill in even further to see music, restaurants, tv that you like. If they know this type of information then they have that playing in the room. They can do these things simply if they have the system.
This can also be a great sales opportunity and they can see trends to get a bigger picture of the guests based on targeted information.
We have 7 live properties right now and another 5 in the installation process.

Q? Naming?
A. It comes from Vendi, Vidi, Vicci – we added the extra “C”. It is pretty high level. If you know Mark Hurst this is where we got the name.

Q? How big a hotel to be profitable? Who wants to investigate?
A. This is at least 3.5 stars. 4 stars use more. 85% of the market is non-chain in the US. Those properties do not have loyalty programs so they have to do alternatives. You see the most use in 4 star and above. 200 rooms and less.
There are components of this. Every Marriott goes through a daily line up that they do. I have talked to them. They don’t know very much about the people. Make sure that they are next to elevator, Newspaper and pillow because you put in the information and part of the user is entering it.

Q? Have you looked at customizing this and integrating with customer survey?
A. Most of the hotels see that and hear they need to be better about their noise and we will drive that higher. We are through Trip Advisor information. That is one of our key metrics.

Q? It looks like you are pulling in data from alot of places but can I put the information in?
A. We are looking at VicciMe so you can build it. We want to enhance your profile and then that would be distributed to the properties that you use.
Some of our partners aren’t as fond of that. The magic is interesting for some of our guys.

Q? Property management systems with history about buying OnDemand and Alcohol etc.
A. Depends on the Property Management system. We can get the information right out of them. Much of that stuff is private. Food items in room service can be a pretty big category.

Q? Events and things – do you look at guest patterns?
A. Our reservation pattern sees that every six months this person travels. The goal is to see all your travel patterns. You are right that we can estimate you will go to San Antonio.

FuelOperator
Steve Lomits
We are solving the problem with maintaining underground storage tanks. The EPA governs the regulations. Up until 2005 they talked about the right equipment. Now they have changed it in 2005. They give the states an amount of time to respond. The states had 7 years to comply with the new regulations.
29 states = 750 different regulations. The EPA is going to add another set of regulations soon. With big chains like 7-11 and Shell you have a ton of states and you have to create different programs. There are a couple of systems that cover some of the different regulations and it adds work and violations.
Fuel Operator
Tracks permits and other things and takes care of the inspections. 7-11 inspects as a contractor. The store doesn’t care the but the state wants to see it.
Our app takes care of all that. For big companies they can enter the information in here. The client can put in all their stores. Maverick must get all their store inspected.
The app has a list of inspections and the store, the app and database will know which needs an inspection. The form is pulled out from the database for each of the different states. If they have a thumbs down they they are bad and you have to take a picture. The client gets a store report at the Headquarters. They can then send out maintenance.
I have done over 4000 of these inspections and the companies came to me and they don’t want to build this app. What’s good and bad. Out of the blue we have been contracted with newspaper and paper and we can do this on this app as well. The customer can add and take away questions as they want.
We should be able to launch at the end of this month.
The second largest retailer called me.
It’s simple and not complicated but they want it.
2011 500,000 inspections but now millions

Q? You have interest but what about contracts?
A. We haven’t been able to lock it down. All of the interest is from retailers in the state. We haven’t actually pitched to anyone. We are trying to play it that way.
You give them the slider deck like this and they are good

Q? Some falsify inspections? Credit care skimming?
A. We are more the big player change. We are going to do more management.
We also have a price for per store basis.
The client can add their own questions for compliance.

Q? You can find out from the clients?
A. Yeah they have given us the information. AT*T was managing this wrong. There are a few places that are going about this all wrong.

Q? Are you going to look to expand?
A. We have thought about that. This is where we are starting.

AMP Session
Ryan Caldwell CEO at MoneyDesktop
I was on panel today at Business Expo at UVU and a bunch of questions came up so I am ready for tonight.
A lot of people asked “What do you think is important? What are the issues?”
One of the things from my perspective is personalities and what kind of startup you want to build. There are a lot of questions about business advice but I stared my first business out of college and got an exit for a decent amount for a college grad. 3 years ago I started money desktop and I knew what kind of team and company I wanted.
So the questions earlier today were how should I do it?
But I asked back to them, what is YOUR idea and concept? What do you want to build?
Some said quick venture, long haul, organic and others.
But the right answer is what you think is right.
I started my company aggressively.
Dave Bateman did a more organic path and it takes years and years longer.
If you have an idea that you want to tackle go for it.
Is it a good idea or is it something that you are passionate about and are willing to scale. over time?
When I looked at this last year a friend game me a world travel ticket and you can do as many flights as you like in year. That is sad but I didn’t want to be anywhere else.
There were days that I wanted to because things aren’t perfect. I had bad days but in general this is what I wanted to do. Work is my preferred place to be and I was okay with giving up the benefit. If you are not passionate then it will be harder.
If you are passionate and want to have the biggest, fastest impact then you can raise money. Or you can grow organically. If you want to grow aggressive then you need to have a team that is that aggressive. They are also opinionated people and so you may have a lot more disagreement.
I have about six personalities that are very strong. On any given day 2 of us are going to kill ourselves. But that is okay. They are driving things really hard.
Some of them say, “There is no ways we can do this …” Or the other that said “if I include your items then it will suck.” Or, “but if you design it I won’t be able to scale it and have zero downtime.” SO each of them are saying, I am out if it doesn’t go my way. There are days that I am definitely driven crazy. But they each have their strengths from the UI to the network and they are willing to quit over it. I have one of my guys that has explosions once a week. What he creates is very valuable and incredible. Some of the best teams have conflict personalities. There are ways to lead that so that you have something better.
You have to choose if you want that but it is not organic.
We chose the path of aggressive. We have won the last six shows on the national level. We are going up against massive companies. We have over 400 banks and credit unions.
Visa, and First Data but it comes at a great price.

I am just curious who has started their own company. Some are organic and my advice is very bad. Dave Bateman would be ideal for you.
Q/A
So why Utah? and not Maui?
A. I am not going to lie but I have been tempted. I moved from downtown SF. I am not a native of Utah but I am mostly from Texas and school in CO. Utah has a really great ecosystem. It is right in that in between place You have great people and then you have people that area not as driven as in the valley. A lot of people want to make an impact and will be in the Valley. They want to dive in and get aggressive growth. But here there are less huge downsides.
In the valley some are new and inexperienced and they work for 3 months and then they ditch and start their own thing. Or some months in a year there is irrational behavior. There is also insane amounts of money.
If you have a good enough and growing idea then it is okay. But we have acquired two companies since we relocated. We didn’t take their teams. We have brought some out here.
4-5 relocated as engineers.
Q? Hiring process to identity these people?
A. We took a really strong stance a year ago. Since then we made it a little more gentle. We need really strong driven people . We will need a few more. I also need some great engineers that will come in 9-5 but we can use them now. We used to have a pretty strong interview process. You are either going to love it or hate it here. The people around you will hate you or love you. You won’t feel threatened. Over time though if you feel you are really talented but are not gelling or you are not skilled and talented and then you may need to shift roles. Some think, “I was the number one at my last company but I didn’t understand this.” Can I work as integrations team? If so, then they can stay. Or some of our sales guys who couldn’t keep up with the quotas.
We are clear if you are one or the other. It is not our responsibility to help you fit in. If you can’t then that is something you will need to fix. We need to keep being a good enough company to meet our expectations in growth. If you don’t fulfill that then we tell people that is a painful process.
That is weird.

In the Weeds
Matt and Matt from CapShare – Equity Intelligence
President and VP
We were talking with Jeremy a month or two ago and we were going over some things. He said we should come and talk about it here.
Here is the folk story of the invention of the game of chess. The emperor of India was pleased with another Indians performance. As a reward the man requested, “All I want is one additional grain of rice for the squares on the board.” The emperor was quick to accept a humble request but his treasurer say that he would cover the country of India 50 feet deep in rice if he did that. (compounding growth)
As a startup company raising money, you need to understand the terms of the deal. This is one of the most important decisions you can make. It is important to have a good feel for the terms on the Term sheet.
Matt will go over an example of this.
Matt: The topic of equity knows no abound. We are focusing on one issue for those raising institutional money. The Emperor would have done good if he thought about what he was giving up. I raised a million and gave away 20%. That percent is usually a percent of shares. It is a good number of shares. But what percent of the economics did you give away. Those are not always equal. Shares based ownership is Accounting. Here is an example:
Founder A has 1,000,000 share to sell 250,000 shares for $1 / share to give way and it is preferred stock.
1x liquidation preference. The investor gets one times their money first.
They get $250,000 first.
Their ownership is 20%. If the company sells for 250,000.00 they get 100% of the cash. If you sell at 500,000.00 then they got 50% of the cash. If you sell for 1.25million
So we can change it to “Participating” they get their money back and their ownership. When we reach to the last value we see that they get 20% + 250,000.00
So you want to understand the words of the Terms. You obviously want non-participating
We have seen deals where the entrepreneur could have changed the deal if they had asked.
With one minute left here are the words to know:
Liquidation preference
participating and non
cap
Conversion rate
anti-dilution
dividend
cash vs. PayInKind
Interest rate, compound
seniority
You need to know the complexity.

QA
?Q – What does Capshare do
A. We help you manage your cap tables. For me and my friend that own 50%. As you get the extra layers it can be a huge pain. The paper work takes 20-50% of the time. We will automate paperwork and help them see how things flow and how it can be automated.
The genesis came from Scalar Analyitcs and we saw the need for this. From before that we saw that there needed to be better access to the information. Venture firms don’t always have the best information. The investor can go straight online.

Q – Does this show option grant / option grant to see what an employee comp is over time?
A. Yeah. There are cool things we have. We are looking at a 30 million exit and helping them know who has what and what they would get. As well with a graph like this and turn off all the 15 options guys.
We have more specifics on how are they earning that value. As you know it has the accounting rule with what I granted you. 40000 over 4 years. That can be used in this analysis. There are things in the cap tables. No one is too interested in what we do until they need it.

Q. Have you seen investors throw tricky things?
A. Good question. I tried to be explicit. For the most part the investors want a win-win. In series A you want to seek help. In Series G they are trying to cram down but in Seed stage I have not seen any really bad term sheets.

Jeremy Endorsement: We use their stuff for Dropship stock. It is some complicated stuff.
matt.stapleton@capshare.com

Announcements
StartupWeekend SLC 5/16-18
saltlakecity.startupweekend.org

Brainstorm LaunchUp:
Northfront (kayesville) Jan/mar, May
Vegas Jan, Mar, May etc.
Utah monthly

Thoughts?
*First time, sweet low key for entrepreneurs to meet
*Love these events – maybe some high school with those who don’t have downside, students
I love it. I think we should tell more people about it
***word out?
*Someone started a live filming with a couple of investors with Jason Calistanis to highlight Utah companies. They mentioned you twice – Dropship.com. It could be a bigger event. Kickstarter fund to raise 15k to bring them out and use Adobe location.
*Good idea but one of the requirements is that for someone to come, there are all sorts of companies that are early stages. There are different levels so you don’t get the right synergies. For me we need three levels. Phased levels for the early and then the later level comes later with bigger stuff. An ecosystem – 30 min before with 5-50 brainstorms.
Reach a broader ecosystem.
*Corporate Alliance is an example of this.
*I have been to every single event and can help you. Facebook page or forum to share with the sense of community
*I run Silicon Slopes for Josh James and we are trying to relaunch that for him. With some developers in the next month or two and work with other groups.

Q – Location
We have said here because it is at Point of the Mountain. Then we did the college tour after we didn’t have a home. Quick thoughts on that?

Q – Frequency
LV has 200 people every other month

*Maybe alternate location and frequency with Salt Lake and Provo every other month.
*Like the consistency in Location.
*I like the frequency of every other month.
*Utility to having monthly then when you miss you aren’t out 2 months.

UVU in May 2-4 with the Conference

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