Like a hungry mob at an all you can eat buffet, people gorged themselves on entrepreneurship information Wednesday at the third annual Capital Factory Demo Day 2011.
The day-long event at the AT&T Conference Center in downtown Austin kicked off with a keynote speech by Bob Metcalfe, the co-inventor of the Ethernet, founder of 3Com and now a professor of electrical engineering and director of innovation at the University of Texas at Austin.
Metcalfe offered great advice to the entrepreneurs in the crowd. He said a lot of young entrepreneurs appeared to be “on the verge of dying.” But, instead of pulling all nighters and eating ramen noodles, he told them to get in shape, sleep at least 8 hours and eat healthy meals. The crowd seemed skeptical.
Metcalfe also advised the entrepreneurs to write all the time, give speeches and learn about selling to pitch the company’s products.
“Some entrepreneurs think sales people are lower than whale shit,” Metcalfe said. “Sales people are a different species but they’re carbon-based like you.”
And sales people are essential to the success of a startup, he said.
Metcalfe praised Austin’s entrepreneurial spirit and innovators like Michael Dell of Dell and John Mackey of Whole Foods.
To further foster young entrepreneurs, Metcalfe also launched the one-semester start-up at the University of Texas. Joshua Baer, co-founder of the Capital Factory, is also an instructor.
Following Metcalfe, the five Capital Factory 2011 Finalists pitched their companies in eight-minute presentations with slides. At the end, SwimTopia won the applause meter reading as the audience favorite.
At noon, Brian Sharples, founder of HomeAway, talked about pursuing his passions and launching his company at the age of 44 after making a lot of other mistakes.
“Surround yourself with as much experience as possible,” Sharples said.
Also, do your homework, Sharples advised. Before he and his co-founder Carl Shepherd started HomeAway, they spent more than six months researching the vacation rental market. They knew very little about the market. They soon discovered Expedia bought VacationSpot in 1999, but the business failed within a year. They found the former CEO of Expedia to find out what went wrong. Turns out Expedia tried to turn the business into a hotel business and get rid of the subscription fee model that customers liked. Owners also liked to interact with renters before leasing their properties. Expedia took away that conversation. HomeAway brought it back.
HomeAway, which recently went public, acquired more than 70 companies to create a business to make it as easy for consumers to find, book and stay in a vacation rental home, as it is to book a hotel.
“If you have a good idea be quiet about it until you’re ready,” Sharples said. For three or four years while HomeAway built its business and acquired competitors, the company didn’t talk to the press, Sharples said.
Sharples told entrepreneurs to be humble, to worry about competitors, to be passionate and to remain flexible. Also, entrepreneurs must have a profit model. The days of starting a business with no clear idea of how to make money, like Twitter, don’t work, he said.
“Never settle, always try to make things better,” Sharples said.
During lunch, investors mingled with entrepreneurs at an actual all you can eat buffet of veggies, chicken, beef, mashed potatoes, salad and desserts.
Silicon Valley Bank, Silverton Partners, AustinVentures, RedHouse Associates, Clearstone Venture Partners, Wildbasin Investments and Entrepreneurs Foundation of Central Texas sponsored the event.
Following lunch, 17 entrepreneurs gave three minutes pitches on their companies. They included Apptive, CopperEgg, The Daily Dot, Forecast, Greenling, Hoot.me, ihiji, Infochimps, Loku, OwnLocal, NightRaft, Ravel, Ricochet Labs, Rockify, Spanning, Stormpulse, VolunteerSpot and WPEngine.
Next, Auren Hoffman, CEO and co-founder of Rapleaf, talked about recruiting and hiring tech talent. He seemed to contrast sharply with Metcalfe’s advice from the morning. Hoffman advised entrepreneurs to work long hours and hire others who work long hours six days a week. He also advised them to return calls and e-mails in a timely fashion.
The day-long Demo Day ended with a call to action. Baer advised everyone to go to the closest bar to talk and then to take the shuttle bus to join the Startup Crawl, a series of stops at various high-tech businesses around town to meet the companies, drink and mingle.