The transcript follows & video below. You can see Part II of interview here.
I wanted to welcome you Tereza & just found it so stimulating & interesting the conversations that have been happening on Fred Wilson’s blog. Obviously you have become a bit of a celebrity through your contribution which is incredibly generous. Because you have kept it up, and so you are a better woman than me Gunga Din. So I wanted to welcome you & get a bit of information about your businesses & what you are involved in at the moment?
Sure, I’ve got my fingers in a few pies. I’ve been very active in getting a new web & mobile startup off the ground. It is as yet undisclosed, we’re going to be launching it in August. It is in essence a mobile friends network where you can ask your friends for feedback. Its in keeping with the mobile Q&A theme that has been flying around. But it definitely has a female focus, as I think the inspiration behind it has a strong female thrust. The monetization model is lead generation & a social CRM for long tail local businesses.
And obviously you’ve had to source venture capital for this, is that correct?
Well I’ve been working on it & I’ve been doing so not terribly aggressively. Because we have really been trying to follow the ultra light model. I decided to go after this particular opportunity because I had gotten to know it based on a different business that I was working on. So I felt that I was walking in really understanding what the market opportunity was & if I were to reverse engineer a really killer social mobile solution for it what would it be? It was clear to me based on where the market was at that moment in time that no-one was funding concepts. I’m an experienced business executive & I’ve done a ton of innovation, I’ve done startups but a long time ago so I’m not really on the map in the regular startup scene. So it didn’t seem to me like the regular institutional folks were going to take a bet on me. So I felt it was really imperative for me to define a mimimum viable product, get it out into the marketplace & let the marketplace do its talking. So that’s what I set out to do. I ring fenced a little bit of my own money, I don’t have a lot. I created a budget & just started talking to a whole lot of developers. I talked to 20 different developers. I looked into possible partnerships, agency models, outsourcing & the whole gammit. I made a decision at that time as to what seemed the best way to go forward. Now quite a bit further down the line I think it was the right decision for us. I have since brought in a partner. In the last few weeks I went out seeking some seed funding to just put some gas in the tank.
Today is my 40th birthday, ok, so I’ve been around the block. What I found is that with a very little bit of money there is a humungous amount that we can get done because we’ve got great networks. But it takes time & when you’re calling in favors you can’t put a deadline to it. So the way I saw it whatever money we could get in the door will put gas in the tank & give us velocity to get our product to market. So we are pretty close at this point, our web platform is almost done & we’re almost done with our first mobile application & that’s how we’re going to hit the market. But its been interesting, as people that know me, like former bosses are super excited and say ‘Sure, Tereza, you’ve made us lots of money in the past, we’ll back you up!’ They’re not part of the standard scene so I’ve been trying to be selective about who we would talk to just in the spirit of pre-qualifying conversations. If it doesn’t seem to be up someone’s alley, there are only 24hours in a day and I’m still trying to get this company off the ground. So I am trying to select these conversations carefully.
So I gather from that statement that you have been basically trying to match up your startup with potential sources of venture. You are trying to find out whether those venture companies are interested in your business & whether it is their sweet spot?
Yeah, we are pre-launch & we are in essence a web consumer business so it seems that the investment hypothesis among the classic venture funds is get into market, show your traction & if you can hit a certain number of users, let’s just say 100,000 users then you are a great bet.
It’s an interesting policy that they’ve got to see whether or not you are a good bet before they risk their investment. It’s an interesting piece as far as venture goes?
Well its clarifying, for sure. I think then it highlights what your next challenges are. What can you put out in the market with as little capital as you that is going to get enough traction to get the next level of attention. And I do wonder & I think this is motivation behind the blog post that I wrote, the really early stage investing strikes me as an extremely visceral decision. So we hear about pattern recognition in this industry and I get it. I understand it that, there’s a bit of ‘I know it when I see it’ with it especially in both consumer & B2B. The investor wants to get their hands on a product & they want to fall in love with it. They want to think that its the coolest thing! I understand that & whenyou don’t match their pattern then it becomes a more mechanical decision than a visceral one. I think that that mismatch is hard to bridge. That’s my insight & I’m curious to know what other people think?
Thanks for that insight, I really appreciate your contribution. I know that the Fred’s blog post featured your idea of xx combinator. Would you give me some further feedback & your vision & involvement with that, because a lot of people are just jumping up, clapping & applauding & it looks like something is going to happen.
I would love to see something happen. It started with a previous comment on Fred’s blog in which I expressed a little bit of frustration in a particular moment. Fred asked me ‘Tereza, what is stressing you out about your startup right now’ & I went on a bit of a rant. I was feeling frustrated that it has taken a long time for me to get from concept to market. And I have been watching the ycombinator from afar, for a long time & they so drive kind of the agenda of tech. They have really redefined the market of the ultra light startup where you push something out to market really, really fast & you let the marketplace talk & see what happens. They were as I understand, created for a pretty special case. It tends to be very, very deep technical people, tend to be pretty young, they come full time or very active in the program on site for 3 months. And with the demo day, its really the best people in the business are revolving around it. It gets a ton of attention. When some people are affiliated with the ycombinator there is a real WOW about it. In fact a while ago, I thought well I’m a swing for the fences person, let me look at it & see if I might apply for ycombinator. Now I’ll say from the start that I’m not a coder, I’m not technical. I have a ton of experience on the business building & innovation side but I am not technical. So when I looked into it it said well you need to commit to relocating to San Francisco or Silicon Valley for 3 months. I went oh well, at the time I have 2 1/2 year old & a 6 year old & I live in the suburbs of New York. And there is absolutely no way I could relocate for 3 months – its completley impossible. I said oh well too bad, I guess this program isn’t for me! And yet I yearn for that WOW factor & it just seems to me that that is a structural issue. At the same time there are a lot more people like me that have some ideas could be brought to market that are not being served in the market. It would be very beneficial to help them define what that minimum viable product would be, help them wire frame it & build something & get it out. So my thought about what I coined the xxcombinator, which may or may not be the right name, would take the best of the ycombinator, would have that WOW factor, would have the best people revolving around it & would address some structural realities that are related to people who are not males in their early twenties.
So locking those people that can’t physically attend out, in other words?
Yes I think its a geographic thing. Also I think its a family status thing, if you’re a parent versus not. I got a lot of positive response from Dads which was really interesting. If there are some that do get in, they are the types that get in. And frankly we don’t have enough of those, I wish we did. And I think that that is an important population for us to me. And I have to tell you I also got some really strong push back from some really deep women scientists/coders who don’t have children. Because they’re the types that do get into ycombinator. If there are some that do get in, they are the types that get in. And frankly we don’t have enough of those, I wish we did. And I think that that is an important population for us to support & foster, but I think that is a long term strategy.
Point taken. Well I hope that the idea continues to move & becomes a reality in some shape or form because obviously there would be opportunities for people who are locked out of that situation to have further opportunities. The mentoring & the networking would be a fantastic piece of that, I imagine.
This is an edited version of the video of Tereza’s interview:
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