Tag: Grapevine

The Post Mortem on Short-Lived Tech Startup: Grapevine

Founder of Silicon Hills News

Photo licensed from Getty Images.

Photo licensed from Getty Images.

More than 90 percent of technology startups fail, according to a 2012 report from the Startup Genome Project.
The researchers found that most fail “due primarily to self destruction rather than competition.”
“For the less than 10 percent of startups that do succeed, most encounter near death experiences along the way.”
Some tech companies fail in a spectacular way like Webvan, a grocery delivery service during the dot com era that raised and spent more than $1 billion and closed down after just two years.
And others are just here today and gone tomorrow.
That’s the case of Grapevine in San Antonio. It was one of the first recipients of a $25,000 investment from the Geekdom Fund. Eric Larson and Richard Ortega founded the company, and a third co-founder Josh Seltzer joined Grapevine in 2012. The company lasted one year from inception to shut down.
On Tuesday night, the founders talked about their entrepreneurial journey and what led to their closing up shop at a post-mortem talk during SA NewTech, a monthly gathering of entrepreneurs at Geekdom.
Ortega recounted some advice Jason Seats, co-founder of Slicehost and now head of TechStars Austin, told Grapevine early on: “You want to be a must have and not a nice to have.”
Grapevine alerted businesses, primarily restaurants, to reviews left at Yelp, OpenTable and other review sites, about their establishments so that they could respond to them in a timely manner. They sprang to life out of a 3 Day Startup San Antonio weekend in the summer of 2012.
“We were all in,” Larson said. “Grapevine was what we did on a daily basis.”
By winter, Grapevine got some paying customers. At first, Larson did everything manually but by January, Ortega had a fully functioning software program.
They also joined the San Antonio Restaurant Association to find more customers.
The company applied to Dell to pitch at its first entrepreneur pitch day in January. Dell chose Grapevine as one of the lucky 13 to present in front of Dell executives. After that event, the company had two other meetings with Dell executives but a deal never materialized.
And then in the summer of 2013, Grapevine’s money ran out and it couldn’t raise additional funds. Larson, Seltzer and Ortega decided to shut down operations.
They shared a few of the lessons they learned from their startup journey:

  • You cannot have too much customer validation.
  • We were not solving the complete problem. We were only alerting companies about reviews. We weren’t solving them.
  • Design can’t solve core business model issues. “I kept trying to design a package that wasn’t neatly packaged to begin with,” Seltzer said.
  • Don’t outsource, do it yourself. Don’t build on top of other people’s services.
  • Be objective and look at your numbers.

And with a humorous bent, the founders shared some signs they knew they were trouble when:
1. Your developer has more tutorial bookmarks than actual lines of codes.
2. The person in charge of sales is still selling for their old company.
3. Your designer hasn’t opened Photoshop in two years and panics when opening PowerPoint.
4. You use the latest and greatest team collaborative app and you get nothing done.
5. You have more conversations in HipChat than you do with your own customers.
6. You are having a hard time getting customers to sign up for your free account.
7. You’re doing a presentation about the rise and fall of your startup and you’re working on your presentation 30 minutes before it’s due.

Startups Pitch at Dell Tech Innovators Day

imgres-7A lucky 13 startups got a “golden ticket” on Thursday to pitch their businesses to the president of Dell and other top Dell executives.
“I’m super excited about being here and having this opportunity,” said Tonia Thompson, co-founder of Springcreek Systems, which makes software that eliminates duplications in customer relationship management systems.
Thompson worked for Dell until last summer when she left to start her own company. She participated in its first Tech Innovators Day headed up by Ingrid Vanderveldt, Dell’s entrepreneur in residence. Vanderveldt also heads up the Dell Center for Entrepreneurship, launched last December. The Tech Innovators Day brought a variety of startups to Dell’s headquarters in Round Rock to help them make connections, she said.
“First of all, as an entrepreneur, when you’re building a company everyone dreams of how do they do business with a Dell. How do they get in the door?” Vanderveldt said. “We’ve completely opened up the doors.”
zewzvDell’s President Steve Felice wanted to talk to the people building companies with the next big ideas, Vanderveldt said. He attended the afternoon pitch session. He never left the room or took a phone call despite all the news happening with Dell right now with rumors of a potential leveraged buyout underway. He gave the startups his full attention.
“As we become more of a solutions company we’re going to add more companies,” Felice said. Dell is also seeking to promote a culture of innovation and creativity, he said. Felice spoke briefly to the group before the entrepreneurs each gave five-minute pitches to him and other high-level executives at Dell followed by a question and answer session.
Dell has made more than $10 billion worth of acquisitions in the last four years to re-make the company beyond its origins as a PC maker and to build a broader portfolio of products and services. But Dell has startups at its heart. The often-repeated story about how Michael Dell founded the computer company in 1984 in his dorm room at the University of Texas and then built it into a Fortune 500 Company is legendary in Austin.
The startups, from Austin, San Antonio, Houston, Dallas and Chicago, hope to do that some day too. Many were recommended by tech accelerators and co-working spaces including 1871, Capital Factory, ATI and Tech Ranch or Dell’s Small Business Think Tank events.
“They come from a variety of different industries but they’re all focused on how can they use technology as a path to success,” Vanderveldt said.
The startups asked Dell executives for contracts, mentorship, advice, investments and more.
Stacy Yamaoka, co-founder of Austin-based Deohako, which makes tablet mounting systems, recently returned from presenting her products at the Consumer Electronics Show in Las Vegas. She also previously participated in a Dell Think Tank event aimed at small businesses in Austin.
Yamaoka asked for a $250,000 contract from Dell to supply Deohako’s mounting system for Dell’s tablet computers.
Timothy Porter, founder of Appddiction Studio in San Antonio, makes an app to prevent bullying in schools. He asked for a $350,000 investment to hire more sales staff and take the app, which is in 65 schools, nationwide.
Susan Strausberg, co-founder of 9WSearch, a financial search engine, is also seeking investment and strategic partners. Strausberg formerly founded Edgar Online. She moved to Austin and launched 9WSearch to create an intelligent search engine for financial data.
Erine Gray, co-founder of Aunt Bertha, pitched his website search engine for finding and applying for human services such as food, housing, healthcare, education and jobs. He got inspired to create the company after he became his disabled mother’s guardian at the age of 26. He had to find services and help for her and he didn’t know where to go. Founded in September of 2010, Aunt Bertha has four full time employees, an intern and two contractors. More than 23,000 people have searched for services using Aunt Bertha.
Aunt Bertha is a software as a service company that sells application processing software, but it’s evolving into a data and intelligence company, Gray said.
“This is just a great chance to work for a great Austin company and build a valuable service,” Gray said. “I jumped at the chance to come. I’m fortunate to have been selected.”
Ed Bellis, CEO of Risk I/O, based in Chicago, pitched his vulnerability assessment and management software. His company, founded in 2010, has raised $6 million and has more than 2,000 customers. It has also processed 10.2 million vulnerabilities. He asked to partner with Dell.
Shion Deysarkar, CEO of Houston-based Datafiniti, a search engine for data, has 330 customers with $1.1 million in revenue. Deysarkar asked Dell for access to its Project Copper server technology and startup pricing on its products.
This is the first time Dell’s held this kind of event, Vanderveldt said. Dell is seeking to identify the next companies for mergers and acquisitions, she said. In the feedback from the executives, Dell will consider what the next steps will be, she said. There are no guarantees any buyouts or investments will happen.
“It’s an experiment,” she said. “Anything can happen from today.”
Dell plans to hold many more Tech Innovators Days and will publish information on the next ones on its website, Vanderveldt said.
“We’re looking for who is pitching a fascinating idea,” Vanderveldt said.
Under the Dell Center for Entrepreneurship, the company has programs for entrepreneurs at all different stages from early-stage bootstrappers to funded companies, Vanderveldt said. Last summer, Dell launched the Founder’s Club, an invitation-only program for companies with funding and now has 50 companies enrolled and a waiting list to get in. Dell also has the $100 million Dell Innovator Credit Fund, which invests in startups.
Grapevine, founded by Richard Ortega and Eric Larson in San Antonio, asked for a chance to partner with Dell. The company makes a reputation management software system. It aggregates customer reviews from several different sites online and then sends an email alert to the company. Larson thought the day spent at Dell was well worth it.
“We got assurance we will be given a phone number to call,” said Larson. “At the very minimum, we’ll get feedback on our product. All in all, this has been a great experience.”
The startups weren’t the only ones who got value from the event.
On Friday morning, Dell’s President Felice tweeted “Dell’s Tech Innovators Day reminds me that it’s important to stay thirsty, innovative and entrepreneurial.”

Geekdom Fund Gives $25K Each to Two Startups

The Kirpeep Team: Sara Moffett, Steven Quintanilla, Kyle Jennings, John Lozano and Naomi Rios. Photo courtesy of Kirpeep

The Geekdom Fund has invested $25,000 each into two startup companies to be based at Geekdom, a downtown San Antonio coworking and collaboration space.
The teams are KirPeep and ParLevel Systems, said Nick Longo, director of Geekdom.
“Both teams attempted to get the Geekdom Fund in this past round,” Longo said. “For really a myriad of reasons, they didn’t make it through. But they took all of the advice we gave them and met with mentors and came back prepared to tell their stories.”
Longo and the four other members of the Geekdom Fund board met on Tuesday with applicants. The Geekdom Fund board meets every month. Last month, they did not give out any money. Previously, Grapevine, a reputation management firm aimed at hotels and restaurants, received a $25,000 Geekdom investment.
“I’m encouraging teams that apply for the Geekdom Fund to meet with mentors before they apply,” Longo said.
Geekdom members can find the hours that various mentors are available on the member dashboard online, Longo said. The Geekdom Fund Board members including Longo, Jason Seats, Pat Condon, John Mosher and Mike Troy all have times listed that they are available to meet with entrepreneurs.
Last month when the Geekdom Fund did not make any investments, the teams pitching weren’t as prepared as the board would have liked, Longo said. Each team must fill out an application including a Lean Canvas, or one-page business plan, and they are given 10 minutes to pitch their company to the board.
“This is their first money,” Longo said. “This opens up the opportunity for them to get more money.”
KirPeep hasn’t launched yet. The site is focused on creating a system for bartering.
“KirPeep stands for “Keep it real, people,” according to the company’s blog post. “Our vision statement says it all, “We empower those who provide value to the community by making it easy to exchange goods and services, with or without money.” We want to make it possible for individuals to trade not only goods, but also services in exchange for money, goods, or other services. What sets us apart from other bartering sites is the fact that we see how trading services benefit our communities.”
The KirPeep team is made up of Sara Moffett, Steven Quintanilla, Kyle Jennings, John Lozano and Naomi Rios.
ParLevel System, founded two months ago by Walter Teele and Luis Pablo Gonzalez, is working on a monitoring system for vending machine operators.
ParLevel installs a wireless meter inside vending machines so that the operators can get real-time access to their inventory, Teele said.
Right now, the vending machine world is divided up into new machines with the latest technology and older machines that require companies to visit them to find out what inventory needs updating, Teele said.
ParLevel seeks to give those operators with older vending machines real time information on inventory to save time and money, Teele said. The company is working on the software and hardware box now, he said. They came up with the idea after Gonzalez’s uncle told them about a problem he was having with his vending machine business in Mexico. He said he wanted to be able to see into the machines at any time to see what product he needed. Currently, a delivery truck operator must visit the machines and write down what they need. Then he has to go back to his truck and load up the inventory and go back to the machine and install it. The ParLevel System eliminates all of that, Teele said. Instead, the operator leaves the warehouse with the inventory when it’s needed at the machine, he said.
Both Teele and Gonzalez are from Mexico and they graduated from Trinity University and University of Texas at San Antonio.
“We are very entrepreneurial since we were little kids,” Teele said.
The Geekdom fund investment allows ParLevel to patent its idea and form its company and take care of other business, Teele said.
“It puts a challenge in front of us we have to fulfill,” he said.
Team dynamics are very important in the selection process for the Geekdom Fund, Longo said. He considers the team and its abilities over their idea, he said.
“No one is ever going to give you money for an idea,” Longo said. “They’ll give you money when you get to that next level, the product.”

Disclosure: Geekdom is a sponsor of Silicon Hills News.

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