Tag: Joshua Baer (Page 1 of 2)

Joshua Baer Rejoins Email Marketing Firm PostUp

imgresJoshua Baer, serial entrepreneur and cofounder of Capital Factory, has joined the board of directors of PostUp, formerly known as PulseConnect, an email marketing software company.

Baer founded the Austin-based company under the name of Skylist in 1996 and later sold it.

“Although I founded the company almost 20 years ago, PostUp still offers a cutting edge and unique solution for email marketers looking for scale, optimal deliverability and deep database integration,” Baer said in a news release. “As an independent company, PostUp now has a singular focus and more resources to invest in R&D and marketing to propel us forward for the next 20 years.”

Last January, Transition Capital Partners and Petra Capital Partners, bought the company.

PostUp’s customers include ABC Mouse, HBO, NBC-Comcast, Sony, Turner, Univision and others.

“Our rebrand to PostUp positions us as a stand-alone company that allows us to sharpen our focus and innovate at a much more rapid rate around the specialized needs of our customers,” PostUp CEO Tony D’Anna said in a news release.

Capital Factory Celebrates its Sixth Anniversary Kung Fu Geek Style

Joshua Baer, founder of Capital Factory, at its sixth anniversary party. Photo by Laura Lorek

Joshua Baer, founder of Capital Factory, at its sixth anniversary party. Photo by Laura Lorek

Capital Factory celebrated its 6th anniversary Friday night with a party at Kung Fu Saloon in downtown Austin.

More than 800 people RSVP’d to attend the event and Capital Factory gave away 400 T-shirts.

Key employees and founders of Capital Factory received giant wooden Jenga blocks with their names engraved on them to commemorate the event.

Capital Factory has come along way since its founding in 2008 by Joshua Baer and a handful of Austin entrepreneurs and investors.

Up until 2012, Capital Factory served as a traditional incubator and accelerator for high-tech startups.

But in May of 2012, Capital Factory evolved into a coworking site as part of the Austin TechLive initiative with the Austin Chamber of Commerce. That’s when Capital Factory began hosting entrepreneurs, companies and others in a 22,000 square foot space on the 16th floor of the Omni building at 701 Brazos Street.

Since then Capital Factory has grown to more than 600 members, 200 companies and funded 40 companies in the last year, Baer said. Capital Factory hosted more than 600 events last year, attended by more than 25,000 people, he said.

Also, President Obama visited Capital Factory in 2013 and met with Baer and several tech startup founders.

This year, Google for Entrepreneurs designed Capital Factory as one of its entrepreneurial “hubs” a network of organizations around the country and world fostering high-tech entrepreneurship.

Capital Factory also recently launched a “device lab” where companies can demo their products and make them available to entrepreneurs and hackers. It also has a video lab that is in beta mode right now, Baer said.

Capital Factory also launched a funding program with Silverton Partners and Floodgate to provide early-stage funding to companies in its incubator program. Companies with $25,000 in support from two Capital Factory mentors will receive another $50,000 in matching funds from Capital Factory’s Fund along with $25,000 each from Silverton and Floodgate for a total of $150,000 in funding.

Capital Factory has 100 companies in its incubator right now and is adding anywhere from five to ten per month, Baer said.

Startups like WP Engine and SpareFoot started at Capital Factory, but they grew too large and moved out.

That’s the idea, Baer said. They’re still part of the network, but once a company gets to 15 employees they need their own space, he said.

“Our goal is to get them to $1 million in annual revenue,” Baer said.

Fourteen Startups Pitch at UT Longhorn Startup Demo Day

Mark Cuban with the Longhorn Startup team of Pinecone

Mark Cuban with the Longhorn Startup team of Pinecone

Founder of Silicon Hills News

The fifth Longhorn Startup Demo Day at the University of Texas drew the largest crowd ever.
Close to 1,000 people registered to attend the event and most of them showed up despite the cold front and blustery weather that blew into Austin on Thursday.
The evening featured two accomplished entrepreneurs, Cotter Cunningham, founder of RetailMeNot and Mark Cuban, co-founder of Broadcast.com. The evening also spotlighted pitches from 14 student run startups.
Cunningham with RetailMeNot.com, the world’s largest online coupon site, kicked off the evening with a talk about his entrepreneurial hits and misses and lessons he has learned.
At 46, Cunningham left his job as COO of Bankrate in Palm Beach and founded Divorce360.com. He invested $1 million and raised another $1 million from Austin Ventures. The site failed but Cunningham learned from the experience. He founded a new company in Austin, which came to be known as RetailMeNot.
Following Cunningham’s talk, 14 undergraduate teams pitched their ventures.
This class had the most diversity of any Longhorn Startup class, said Bob Metcalfe, professor of innovation at UT and one of the instructors. It featured a hardware startup – a 3D Printing service: Sinigma, a medical device maker: Austin Thermal, a battery charger embedded in a shoe: Everywhere Energy, mobile apps and some websites, he said.
“What always amazes me is how much the presentations improve in the last two days,” Metcalfe said. “It has happened all five times.”
“We had lots of great companies,” said Joshua Baer, instructor with Longhorn Startup, serial entrepreneur and co-founder of Capital Factory.
Baer and Metcalfe teach the class along with Ben Dyer, founder of Peachtree Software and now Entrepreneur in Residence at UT. Dozens of mentors in the Austin startup community also volunteer to help the students.
This time, the pitches featured four biomedical companies and a partnership with the Texas Medical Accelerator, Baer said.

Mark Cuban with the MicroMulsion team

Mark Cuban with the MicroMulsion team

The students gave great pitches, which impressed Cuban, who said he would consider investing in half of them.
Baer had a favorite too. He liked MSpaces, a hospitality startup that signs long term leases for apartments in Austin in desirable locations. Then MSpaces furnishes them with second-hand furniture and local artwork, and then posts them on AirBnB as short-term corporate and vacation rentals.
Hunter Monk, the company’s founder, said it’s seeking to be like “Uber for AirBnB.” He rents the apartments out at competitive rates from $60 to $139. His apartments generate $10,000 in revenue monthly and $3,600 in profits, Monk said. He’s essentially running a hotel business without having to own any brick and mortar buildings.
Another company, Suit of Clubs, a management platform for student organizations, has merged with InterviewStreet, a Y-Combinator company, said Siya Raj Purohit, its founder. She has taken the class twice. She graduates Friday with a double major in computer engineering and economics. She plans to work with InterviewStreet for a few months and then she’ll join Udacity, an education and technology startup based in Mountain View.
“I have always liked business,” Purohit said. “But this class solidified that. This class has had the greatest impact on my educational experience here. “
Siya Raj Purohit, founder of Suit of Clubs

Siya Raj Purohit, founder of Suit of Clubs

The best part was learning directly from successful entrepreneurs, she said.
“Every week we got to hear from a different entrepreneur,” she said. The professors, Metcalfe, Baer and Dyer, also shared their experiences and provided excellent advice, she said.
The team behind BluSense, an networking app that maps attendees at a convention, also took the class last semester. The startups can take the class again to further develop their ideas, which often results in a pivot or change of course. Last semester, Forrest Dukes with BluSense pitched a wristband with built-in sensors to allow people to network at conferences. Now the device is an app.
Following the event, Cuban visited with many of the startups. He stayed until after 11 p.m. to give them advice. He also took pictures with each team. And he even met the team behind The Zebra, a car insurance aggregation site, which Cuban has invested in but he had not met the team until Thursday night.
In a brief interview, he praised programs like Longhorn Startup and said that anytime startups can get advice from experienced entrepreneurs it’s a good program.
Asked about his failures, Cuban said he had a lot. He tried to market powdered milk. He ran a bar, which went out of business in college.
When asked if Dancing with the Stars was a failure, Cuban said absolutely not.
“That’s hard work,” he said.
Cuban and his professional dancing partner, Kym Johnson, got eliminated from Dancing with the Stars during its fifth season in 2007. Cuban, who is highly competitive, did not like to lose.
The Austin Thermal team of Zi-on Cheung, Ashvin Bashyam and Emmanuel Nunez (photo courtesy of Austin Thermal)

The Austin Thermal team of Zi-on Cheung, Ashvin Bashyam and Emmanuel Nunez (photo courtesy of Austin Thermal)

Following the pitches at Longhorn Startup Demo Day, one of the first startups Cuban spoke with was the three-person medical device team of Austin Thermal made up of Ashvin Bashyam, Emmanuel Nunez and Zi-on Cheung. They created Hot IV, a medical device that warms intravenous fluid before it is injected it into the body. Hot IV is targeted at hypothermia recovery and prevention, Bashyam said. Their initial market is trauma victims and the military, he said. They already have a working alpha prototype, intellectual property, and Food and Drug Administration clearance on a previous version of the device. Cuban liked the idea and told them to email him.
Cuban also met with MicroMulsion, which is creating micro gels for cell cultures. The product has lots of applications in biomedical research, said Anirudh Sharma, one of the four-team members. They all wore white lab coats.
“He wants to give us money,” Sharma said. “We weren’t expecting this. We don’t even have business cards.”
The company, like a few others, doesn’t even have a website yet.
Cuban spent a lot of time answering questions from the Pinecone team. They developed project management software for onboarding new employees.
“It’s a good idea,” Cuban said. “But you’ve got to find that sweet spot.”
One member of the team asked Cuban if he had heard of other startups with the same idea.
“I don’t know of any but I haven’t researched it,” he said.
Selling the product to small businesses to integrate their applications is a huge market but it’s a grind, Cuban said.

The other startups pitching included:

Everywhere Energy – a battery charger embedded in the sole of a shoe – sole charger that can provide up to two hours of charging energy for a cell phone or other device.

Sinigma – a 3-D printing service that can print in five different colors targeted at consumers.

UpNext – a mobile app to replace pagers in restaurants. The idea is to give the user more flexibility on long waits.

Basedrive – onsite data storage for businesses.

Recommenu – a mobile app that provides restaurants with feedback on their food.

SocialToast – a mobile app to help people find their friends at bars.

Aurality Studios – a software program for disabled people to interact with everyday technologies.

DayOf – a mobile app that curates daily events.

Mark Cuban and Cotter Cunningham to Speak at Longhorn Startup Lab

markcubanLonghorn Startup Lab started out two years ago as a way to jump start undergraduate entrepreneurs at the University of Texas at Austin.
The program run by Bob Metcalfe, UT professor of innovation, and Joshua Baer, serial entrepreneur and co-founder of Capital Factory, has graduated four classes so far. Ben Dyer, entrepreneur in residence at UT, officially joined the class this semester, but he has been helping out since its inception.
During the semester, undergraduate students create business plans, assemble teams and launch startup companies. They work with a group of seasoned veteran entrepreneurs who volunteer as mentors. Some even land financing at the end of the program from angel investors or venture capitalists. Many of the student-run companies are still operating today including Lynx Laboratories, which created 3-D imaging software, Clay.io, a platform for HTML5 games and Burpy.com, a grocery delivery service.
The fifth class, featuring 14 undergraduate startups, showcase their ventures at Longhorn Startup Lab Demo Day on December 5th. Each team will give a six minute pitch.
cottercunninghamAnd this Demo Day will have two all-star entrepreneur speakers. Mark Cuban, founder of Broadcast.com and Dallas Mavericks owner and Cotter Cunningham, founder of RetailMeNot, the world’s largest online coupon and deal marketplace, will give keynote addresses at the event.
Baer officially announced the speakers on a Facebook post Sunday evening.
Metcalfe also announced the speakers on Twitter.

Previous speakers have included Metcalfe, Baer, James Truchard, who co-founded National Instruments in 1976 while a graduate student at UT and Rony Kahan, co-founder of Indeed.com.
The event is open to the public and already hundreds of people have signed up to attend.

Disclosure: Burpy.com is an advertiser with SiliconHillsNews.com

An Evening With Josh Baer: On Obama, Lionel Ritchie, and Not Getting Everything Right

Reporter with Silicon Hills News

Brett Hurt, UT Entrepreneur in Residence, interviewing Josh Baer, co-founder of Capital Factory, serial entrepreneur and angel investor.

Brett Hurt, UT Entrepreneur in Residence, interviewing Josh Baer, co-founder of Capital Factory, serial entrepreneur and angel investor.

Josh Baer is living something of a charmed life right now. When ACL was rained out last Sunday, he managed to get Lionel Ritchie to give a private performance for 50 people at the home of a friend. His brainchild, Capital Factory, was visited by President Barack Obama this year and recognized as a model for economic development. He’s got a Tesla. He’s met Bill Gates, among a string of other VIPs. So it’s kind of comforting for beginning entrepreneurs to know that his experience with startups, like so many people’s, was: “You’re always thinking it’s about to fail, until it all works.”
Baer’s close friend and entrepreneur-in-residence at the McCombs School of Business at UT, Brett Hurt, interviewed Baer Tuesday night for the Herb Kelleher Entrepreneur-in-Residence speaker series.

Falling Into a $10 Million Business

Baer said he grew up surrounded by entrepreneurial people and always meant to be an entrepreneur but he sort of “fell into” opportunities, rather than being driven toward a particular business. As a student at Carnegie Mellon University in the early days of the internet, he started answering questions about servers, programming and emails on newsgroups and chats and started getting hired for a little programming, mostly being paid in pizza. But then someone asked him to host their email account on his server because the customer didn’t have time to mess with his own server breaking down all the time. That was the beginning of his own email hosting business.
Baer hired his frat brothers, “which was not necessarily a strategy I would recommend” to do the parts of the business he didn’t know how to do or have time to do. And eventually it grew to revenues of thousands per month, then hundreds of thousands per year.
The growth made him the richest college kid around, but it also scared him. For a few months, he asked if he could use his mentor’s business as an umbrella for which he would pay a percentage of income. But then, Baer said, he realized he wasn’t getting any benefit out of the arrangement and he needed to just step up and create his own business infrastructure. He incorporated, got an accountant and a lawyer.
And then he did what so many budding entrepreneurs do, he screwed up. He was fudging the line between contractors and employees, not paying much attention to the rules various state labor departments and IRS have concerning that line. His advisors told him he needed to hire his contractors on as employees and start paying taxes. But he didn’t.
“Wait,” Hurt interrupted the story. “Is anyone from the IRS here?”
“It’s okay,” Baer said, “the government’s shut down.”
“Oh yeah,” Hurt assented and encouraged him to continue.
The IRS wasn’t shut down at the time, though, and Baer got a letter that he owed $100,000 in back taxes for his employees.
“I was embarrassed and scared,” Baer said. “I’d never been in trouble with the IRS. I didn’t realize it was a totally workable situation. For a week or two I was really stressing it. I felt terrible. It affects you physically. I was depressed. I wasn’t eating. It really hits you then that there are people depending on you and you failed. That was a really dark time for me…it turned out to be nothing. It was totally negotiable. We got on a payment plan and had it paid off in a few months.”

Trilogy and Capital Factory

Baer continued working on his email company, SKYLIST, even after he was hired as a software developer for Trilogy. At Trilogy, he co-founded e-commerce software maker IveBeenGood.com in three months and sold it a year later for $20 million. In 2006, ten years after he founded it, he sold SKYLIST for $10 million.
The first year after the sale was fine, he said. It was all about integrating the company with it’s acquirer. He was busy and had a role. The second year he had very little to do and even though he was living a “dream existence” his inactivity was driving him crazy.
“Selling your company is a tough choice,” he said. “It was my baby, I’d been working on it for 10 years and then you decide to lose control…selling your first company is the most emotional, hardest part.”
It was when his two-year contract was up and the housing market was starting to collapse that he decided to take the fortune he’d just made and put it into an incubator.
“It was the rising tide effect,” he said. “I thought ‘Other people aren’t starting companies right now, there’s less competition.’ Combine that with the fact that Y-combinator and Techstars had just started. I’d been through Trilogy University and it was really fun. I thought: It looks like starting an incubator is the most fun thing I could do.”
It’s been epic for Baer. Last spring, he got an email that “a senior administration official is thinking of making a trip down here” and was visited by three “people in suits,” Baer said.
“Two of them were definitely secret service,” he said. “They started planning things, ‘We need to shut down that whole street….’ They kept referring to ‘him.’ Then I was pretty sure it was the president even though they hadn’t said so. I didn’t get confirmation until a week before. They came in and put in phone lines and they were doing all this stuff. They were so nice and apologetic and we’re like ‘No, this is so cool!’”
President Obama listened to five pitches and later referenced one in a speech at Applied Materials, a feat that amazed Baer.
“Anybody who has worked on a startup pitch knows it’s really hard. Especially a short pitch, a two-minute pitch, to make sure everyone can understand what your business is.”
But Obama, in referring to his visit at Capital Factory, nailed one of the pitches not in two minutes, but in two lines.

Advice for Entrepreneurs

Baer also teaches 1-Semester Startup, now known as Longhorn Startup, with Bob Metcalfe and Ben Dyer. Asked to give advice for young entrepreneurs he had several thoughts:

  • If you don’t have something you’re passionate about, find someone who is passionate and latch on. Many entrepreneurs have gotten their “big ideas” while rubbing shoulders with other people who were passionate.
  • The two traits he looks for in an entrepreneur: One, the ability to make decisions with less and less information and Two, passion. Passion, he said, is compelling to anyone you want to invest in or work for your company.
  • Sometimes mistakes are a sign of growth. “With my first company I was trying to make everything perfect,” Baer said. “I could be a total hard ass. Could be pretty not nice to be around. I had very high expectations and got upset when people made mistakes. But if you’re making mistakes, you have bad systems. You have to make a plan that allows for people to make mistakes. By the second company, when a problem would happen I’d be like ‘Oh, that problem! I know how to deal with that problem. Cool, we’re big enough to have that problem!”

The next Entrepreneur-in-Residence speaker is Cotter Cunningham, CEO of RetailMeNot, October 29th at the AT&T Executive Education and Conference Center.

Five Austin Startups Demo Products at the InnoTech Beta Summit

Evan Baehr, co-founder of Outbox

By L.A. LOREK, Founder of Silicon Hills News
The Beta Summit at InnoTech Austin on Thursday featured five innovative startup companies.
Joshua Baer, serial entrepreneur and co-founder of Capital Factory, served as the event’s moderator. He pitched his startup, OtherInbox, at the InnoTech Beta Summit a few years ago.
The startups each had eight minutes to showcase their companies to the standing-room only audience of more than 150 people. The startups included TrustRadius, Outbox, Ube, Skyence and Compare Metrics.
First up, TrustRadius, a company so new that Baer hadn’t heard of them yet, gave a demonstration of its enterprise software review site.
With consumer services like Yelp, people can find a thousand reviews of Home Slice Pizza on Congress Ave. but few reviews on expensive enterprise software programs companies buy to run their businesses, said Vinay Bhagat, TrustRadius Founder and CEO.
That’s the problem TrustRadius seeks to solve. It has launched a beta program for its review site for company software.
The site providers users with a template to evaluate a software product based on quality, customer service, ease of use and more. The reviews can also be sorted according to company size and industry. So a company technology professional can get relevant results for a small, medium or large business.
TrustRadius plans to make money through partnerships with software vendors and through subscription plans to premium content, Bhagat said.
Next up, Evan Baehr, co-founder of Outbox, gave an overview of his startup seeks to disrupt the bureaucratic and slow-moving U.S. Postal Service.
Outbox received $2.5 million in funding to create a new and better way to deliver mail to people in the digital age, Baehr said.
They built a product that digitizes all postal mail and delivers it to a user’s computer, phone or iPad. The product is in beta testing in Austin and already has 200 users.
Outbox seeks to innovate where the U.S. Post Office has failed, Baehr said.
“We’re young, we’re hip,” Baehr said. “We’ve got great outfits and really cool cars.”
Everyday Outbox’s employees, decked out in bright red Under Armour shirts, drive their white Outbox Prius cars to pick up customers mail. They then open the mail and scan each piece into a highly secure website. Customers can then access their mail and decide which items they want hard copies of to keep. Those items are delivered every Friday to the customers.
Outbox charges $4.99 a month for the service. Customers only need to send a picture of their mailbox key to Outbox to get started. Outbox then scans the key and creates a copy of it using a 3-D printer, Baehr said. The service is available in 40 zip codes in Austin right now. In the coming months, Outbox will expand to San Antonio, Houston and Dallas, Baehr said.
Outbox plans to integrate online bill paying into its service to make it easy for its customers to pay everything online, Baehr said. Right now, only 14 percent of bills are paid online, he said.
In the beginning, Outbox tried to partner with the U.S. Post Office. Baehr and other Outbox employees met with Postmaster General in Washington, D.C. to pitch their idea for digitizing the mail. The U.S. Post Office was not receptive, Baehr said. So they pursued the idea on their own.
At the end of the presentation, Baehr handed out postcards with a code for free two-month discount to the Outbox service.
Baehr talked so fast and enthusiastically that at one point he joked he felt like he was selling a Ronco Knife set.

Utz Baldwin, CEO and founder of Ube, demonstrates the Ube app to turn on lights

Next, Utz Baldwin, CEO of Ube, joked “That’s what happens folks when you feed your kids Redbull for breakfast.”
Ube recently won the People’s Choice Award at DEMO Fall 2012. The company plans to launch next month its free iOS app to control IP-enabled devices in the home like lighting systems, smart TVs and thermostats.
Baldwin is a former CEO of CEDIA, the global organization representing the connected home industry.
“The Internet of things is here,” Baldwin said.
Right now, creating a connected home can costs thousands of dollars and requires all kinds of hardware. Ube replaces all that, Baldwin said. With the app, anyone can control lights, TV and other devices in their home using a smartphone, a Wi-Fi router and the Internet.
Baldwin demonstrated how he could dim lights with his smartphone. He ended his presentation with a question to the audience.
“What will Ube controlling next month?” Baldwin said.
The fourth company to pitch, Skyence showed off its cloud services management software. The company launched six months ago and is in a private invitation only beta, said Tony Frey, its co-founder.
The software helps companies manage their files in the cloud on services ike Yammer, Shoutcast and Dropbox, Frey said. Skyence filters across all the cloud services, he said.
Skyence can track files and let management know who is using them and who are they sharing the files with online, he said.
Lastly, Compare Metrics’ Garrett Eastham, founder and CEO, provide an overview of his feature-driven search engine for e-commerce sites.
“We’re adding a new layer of interactivity and discovery on top of e-commerce sites,” Eastham said.
Compare Metrics has created a platform that delivers only the most relevant features to a customer. The platform becomes more intelligent the more a user interacts with it. It learns a person’s preferences and then makes product suggestions based on certain features. The company has a patent pending on its feature discovery and comparison platform.
Compare Metrics makes money by selling categories to e-commerce sites on a monthly basis. It is a software as a service company and charges $500 per month per category to retailers.
Its first customer, LivingDirect.com, goes live next week with Compare Metrics’ platform, Eastham said.

The Tao of “Austinpreneur” Joshua Baer

Reporter with Silicon Hills News

Joshua Baer has a set of those millionaire-on-a-skateboard dotcom Gold Rush stories that give the Austin startup scene its own sexy tech history.
Baer graduated Carnegie Mellon with a less-than-stellar academic record, and a couple hundred grand in revenues from being an early dabbler in web hosting and email services. He secured two houses: one for his business and one for his home and skateboarded to work every morning. He was one of the dozens of entrepreneurs spun out during of the Golden Years of Trilogy. And, as a young man, he sold his first company and made enough money that he could afford to sit back and contemplate what he’d like to do with the rest of his life, now that he could do whatever he wanted.
He decided what he wanted was to help other entrepreneurs take their own version of the wild ride that brought him there. So Baer founded Capital Factory, which provides work space and mentoring to entrepreneurs. He’s also the founder and CEO of OtherInbox—which he sold in January to Return Path. He’s also a specialist at the University of Texas and an investor and advisor at more than 25 other companies.
The man who once-upon-a-time was scared to have his own company is equipping all the entrepreneurs he can with the knowledge and contacts to create theirs.
Baer grew up in Nashua, New Hampshire, a third-generation descendant of Eastern European immigrants. His father was portrait photographer and most of his ancestors were entrepreneurs.
“So when I first started a company, I thought of it as something achievable,” he said. “It wasn’t as intimidating to me as it is to some people.”
As a computer science major at Carnegie Mellon, he was an early internet adopter. At the time, if you wanted a web site you had to run your own web server. He couldn’t afford a web server and he didn’t get chosen for the StarNine WebSTAR beta program. So instead, he applied for the beta program for ListSTAR, an email server that fewer people were applying for. Being a student with time on his hands, he could afford to play with the email software and read the manual, which led him to start answering questions on the ListSTAR forum. He became the resident expert and eventually drew the attention of the StarNine CEO, who decided to make him an intern, an official spokesman of sorts, to answer questions on behalf of the company.
Soon people were hiring him to consult about issues on their servers, paying him a pizza or $10-$15 bucks an hour. He started farming out work he didn’t have time for to fraternity buddies who were computer science majors. Then one day, one of his customers proposed that, instead of fixing problems as they arose, he would pay Baer $50 a month just to keep his server up and running to avoid chronic breakdowns and angry customers. It looked like money for nothing and Baer launched into the server industry. That was the real beginning of his first company in 1996, SKYLIST. And as it grew, rapidly, Baer got nervous.
“I was afraid to have my own business,” he said. “I didn’t know what I didn’t know.” The CEO of StarNine had sold that company and started another. He offered to help Baer out by making Baer’s company a division of his own.
“By the time I graduated in 1999 I had a couple hundred thousand dollars in revenue,” he said. “I employed a couple people doing tech support and people doing programming. I was the king of my world. I could buy more beer than anybody I knew.”
He got inundated with job offers. But then Jonathan Berkowitz, a friend who graduated six months before him, got hired by Trilogy Inc. and told him about it.
“I met with the CEO and he said ‘Keep your company. Come down here, work for me, learn a ton on my dime and when you’re done you can go back up there.” How could he refuse?
He brought his CMU gang who were working for him down to Austin. They housed servers in his house until they ran out of room, then rented a place up the street. His next company, UnsubCentral, spun out of SKYLIST. Compliance rules were emerging around email and he created a leading compliance solution for email list operators. Part of that company required him to meet with the Federal Trade Commission to provide industry comment on CAN-SPAM. He was 24.
“I don’t really enjoy wearing a suit,” he recalls. “But if I had to do it again now I am so much more confident and better prepared, I would totally show up in jeans and a t-shirt. Back then I was a 24-year-old trying to be an adult.”
When he was 30, he sold both SKYLIST and UnsubCentral to Datran Media (now PulsePoint) for an undisclosed amount estimated at $10 million in 2006. And that changed his life.
“Selling my first company was an inflection point,” he said. “Right as I turned 30 I sold my first company. It was a life changing event. I wasn’t doing poorly before I sold the company but I never had any financial security. ..your perspective on life changes when you have financial security.”
He pondered what he wanted to do. Go sit on a beach? A career as an EMT seemed exciting. “I romanticized the idea….” he said. “It must be incredible to walk home every day and say I saved two people’s lives today. But I pass out when they take blood from me.”
“Then I realized: I get a ton of personal satisfaction from helping people become entrepreneurs. … If I help somebody actually get their company started I feel successful. I get a ton of positive energy back from them…. The best way I can help the world is to help one person achieve financial independence. They’re going to make their own lives better and it’s going to have a trickle-down effect. If they start a company, that makes Austin better. That makes the world better. That’s I thing I can do and I’m good at it.”
So that’s what he does. He has always been a good networker, by his own admission. And he teaches what he’s learned along the way.
“He was one of the instructors for our class, we got to get advice from him on a weekly basis,” said Dwayne Smurdon, CEO of Predictable Data, a company that was created in one of Baer’s classes. “He’s very pragmatic. He gets down to issues you really need to worry about rather than the big scale issues like human resources. He focuses on what is the minimum you have to do to be viable, to get your company started up. “
That might include teaching students how to deal with mentors: Make sure you’re prepared to ask them very specific, targeted questions. Don’t waste your time or their time. Make sure you’re asking until they’ve said no; you never know how much a mentor is going to give.
It includes pitching advice: Start with a story people can relate to. Start with a small picture and build towards the big picture.
“He helps you network, get involved in the entrepreneurial community,” said Smurdon. “He’ll introduce you and what you do with that is up to you. It’s such a big advantage that other people who didn’t’ get to know someone like Josh don’t have.”
Both Smurdon and Baer say he emphasizes focus. There are so many potential issues to tackle, entrepreneurs don’t know where to look first. During pitch competitions, he said, entrepreneurs need to be able to drill down to the point.
“My goal is that I should be able to help everyone in some way: Introduce them to somebody, help them figure out a key tactic–something to do differently,” Baer said. And he’s carved a unique spot for himself in the world of Austin startups
“Josh is such a great catalyst for the city of Austin,” said Bryan Jones, 2012 chair of the Greater Austin Technology Partnership through the Austin Chamber of Commerce and CEO of Collider Media. “There aren’t many people that are both a successful entrepreneur, prolific investor and community activist. His ability to evangelize the city, while still making the community feel smaller by making constant introductions, is amazing.”
Baer is a fierce advocate for Austin as a tech growth center and weighs in often on the Silicon Valley vs. Silicon Hills controversy. While California benefits from a greater supply of early stage capital, for example, he points out that fewer companies need that much capital. He, for example, bootstrapped his first two companies.
“We want to learn what we can from the Silicon Valley, take their investors and their money and never become them. They’re at the pinnacle, they are the Mecca of consumer internet technology but they’re kind of like an established old boy club. It’s not impossible to break into that, but it’s hard. It’s hard to carve out a niche. Austin is a big pond that’s growing. That’s the exciting place to be for me, not in the busiest, most crowded room, but a growing one that creates opportunity…. You can affect what it’s becoming. You can change it. You’re not going to change Silicon Valley….I was a nobody in Austin but I’ve been able to get involved, get to be part of the community, stepping up and filling the void. There are places to jump in and play your part in what is going to be.”
So that’s what he’s bringing to Austin. The message and the knowledge to invite entrepreneurs: There’s opportunity here…come and play.

10 Companies Shine at UT’s 1 Semester Startup Demo Day

All of the entrepreneurs presenting at the University of Texas’ 1 Semester Startup Spring Demo Day Thursday night appeared polished and professional.
The 10 company teams had solid ideas and at least one, PhotoWhoa is already turning a profit.
Josh Baer, one of the instructors and founder of Capital Factory and with UT’s Department of Computer Science, said he’s already recruiting for the next class and is looking for more mentors and motivated students.
The class teaches entrepreneurs how to write a business plan, market their products, network with other business professionals and pitch their ideas to potential investors. They also must write one single page paper a week along with two ten page papers. Baer along with Bob Metcalfe, professor of innovation in the University of Texas Cockrell School of Engineering and Johnny Butler of the IC2 Institute and the McCombs School of Business, also tells them to look out for their health.
“Doing a startup is not about staying up all night and eating bad food,” Baer said.
No one has failed the 1 Semester Startup class yet, but a couple of students dropped out, said Metcalfe. He doesn’t’ have a favorite company, because “I’m not allowed to have such things.”
He likes the smaller size of the class, but if they received an overwhelming number of applications from good companies they might expand it, he said.
For the Spring, 1 Semester Startup got dedicated space for its companies at Longhorn Camp, a 30,000 square foot building. It housed about 25 companies altogether. The others are from student entrepreneurs not enrolled in the class. But the space is going away at the end of the semester so 1 Semester Startup is looking for a new home.
“We failed to create the critical mass I was looking for,” Metcalfe said. He’s a general partner with Polaris Venture Partners in Boston. Polaris runs four incubators around the world. Whenever he visits them they are seething with energy and ideas and people running around, he said. The difference is they are all out of school and they dedicate most of their time to their startups. At UT, students have other courses and social lives, Metcalfe said. The kind of physical interactions and esprit de corps that exists in outside incubators is tough to replicate in a campus environment, he said.
Overall, UT has made a big commitment to fostering startups by students, said Thor Lund, student government president at UT-Austin.
Lund and Wills Brown, student government vice president, plan to write legislation creating a student run accelerator on campus aimed at helping students start and fund businesses. They spoke briefly to the crowd of about 300 people attending the Demo Day event at the LBJ Library and Museum.
“The student accelerator is aimed at getting students connected and empowered,” said Lund.
Nick Spiller, a junior and chairman of the UT entrepreneurship council, runs UThinkTank at the Longhorn Camp along with three other founders.
“What we really want to do next year is to reinvent Longhorn Camp to be for the students by the students,” Spiller said.
Eventually he has hopes to create a Big 12 Startup Team to collaborate with other universities.
“We want to create jobs, create wealth and clear up our national debt,” Spiller said. “We need to get the cash flowing in the right direction.”
The latest crop of entrepreneurs at UT showed Thursday night that they are serious about business. All of the companies planned to continue operating beyond the end of class. All of them are bootstrapped with some friends and family money backing them.

Photos courtesy of 1 Semester Startup

The first team to present, Agreeon created a mobile phone accounting and payment system to track and pay small debts.
Its primary revenue stream comes from a fee on all transactions and secondary streams come from a coupon portal for restaurants, leads to financial institutions and app purchases for advanced features. The company is offering a special to people who pre-register for the AgreeOn app by Friday midnight, they will waive the transaction fees. The app is in beta and is expected to launch within two months.
Photo courtesy of One Semester StartupNext up, Simeon Duong introduced beDJ in which “You are the DJ.”
Duong and four other engineering friends didn’t like the music in a coffee shop in which they were studying. They decided to do something about it. They wrote code. They created an app that lets people control the music in a coffee shop, nightclub, store and other places.
“We’re using music as an icebreaker to promote conversation on a micro specific level,” Duong said.
The beDJ app just launched Thursday in three app stores. Austin is the test market to understand how the app functions in the ecosystem, Duong said. Then, the app will expand to New York and Los Angeles.
“We’re developing a communications platform that has never been done before,” Duong said.
A veteran from the first 1 Semester Startup course, Power Smart Labs aims to reduce electrical costs for data center operators. The company’s software works to maximize efficiency at the data center by turning off servers when they are not needed.
Its competition is Vmware, MiserWare, HP, Dell and Google. But Power Smart Labs targets a data center with

Photo courtesy of 1 Semester Startup

annual revenue of $12 million. It predicts it can save that customer $115,000 a year on a $750,000 electric bill. By the end of the summer, Power Smart Labs will be installed for a data center customer.
“Put your checkbooks down, because we’re not looking for an investment today,” said Michael May. The company will most likely seek a $50,000 investment in August, May said.
Another veteran of the first class, Predictable Data seeks to fix and filter data for companies.
“People aren’t predictable but your data can be,” Smurdon said.
Every day, 230,000 people move, change jobs, get married or die, he said. “Businesses are never done cleaning their data,” Smurdon said.
Poor quality data costs U.S. business more than $600 billion each year, Smurdon said. For example, Overstock.com had errors in 25 percent of its order forms, which cost the companies millions.
Predictable Data has built a software program that is scalable and secure and relies on proprietary algorithms to clean data, Smurdon said. Its aiming its product at small and medium sized businesses.

David Isquick and Dan Driscoll, founders of ReQwip along with Jay Combs, Matt Wedgwood and Saaket Dubey.

On the consumer side, ReQwip wants to help families sell sporting goods gear that they no longer need through its niche marketplace, said Dan Driscoll, cofounder.
A recent New York Times article showed that parents spend about $500 for sports gear every year just for little league baseball, he said
ReQwip’s peer to peer marketplace first plans to sell bikes and accessories and then move into team sports. The company makes money by taking 10 percent on each sale or rental.
ReQwip has created a mobile app. Dealing with a locally based trusted source is less risky than selling on Craigslist or eBay, Driscoll said.
“We are ReQwip and we are changing the game by making it easy to buy, sell and rent sports gear affordably” Driscoll said.
In addition to Driscoll, the team behind ReQwip includes Jay Combs, an MBA student, David Isquick, MBA student, Matt Wedgwood and Saaket Dubey. The team members met each other last Fall during a 3 Day Startup weekend. They came up with the idea and then decided to apply to the class, Combs said.
“The class was inspirational,” Isquick said. Mentors like Carol Thompson, Ben Dyer, Ryan Pitylak and others helped the company tackle business problems and deal with technical issues, he said.
“The mentors were phenomenal,” Isquick said. “They gave us lots of key insights.”

Matthew Amme, Agee Springer and Pranav Desai, founders of Solspot Systems

Another veteran from the first class, Solspot Systems is creating solar charging stations for electric vehicles. It is working with Reva, an electric car manufacturer in India. By 2020, India is projected to have 7 million electric vehicles.
Solspot Systems is building a prototype at the JJ Pickle Research campus and expects to have it finished soon.
“We would like to be in production by the beginning of next year,” Springer said.
Stache Studios is also a repeat in the class.
“We make games like gentlemen” is their tag line. The company is making a game, Teknedia for PC, Mac and Linux users and another one for the IOS mobile platform.
Two of the companies zeroed in on the college market for their products.
Nowoncampus.com is an online events directory and aggregator that pulls information from Facebook to compile a weekly list of events at a college campus. The idea is to let students see the events they have not been invited to in case they might want to attend.
Personab.ly is an online registry of who like who, said Jimoh Ovbiagele, cofounder. The product is aimed at making dating simple and easy through online matchmaking. Its competition is DatemySchool.com, which has 100,000 users. It expects to release a beta version in the fall. The site is free. It makes it revenue by charging food and entertainment sites to advertise in its recommendation site for dates.
The site is even on Angellist.

Eric Yang and Kevin Tang, founders of PhotoWhoa

Lastly, Eric Yang and Kevin Tang founded PhotoWhoa. Yang had already founded a photography software business with $3 million in revenue in two years.
The market for photography gear was $68.4 billion in 2011, Yang said. PhotoWhoa sells photography software and other products at a discount on its site.
After five months, PhotoWhoa has 15,000 subscribers and all of them are photographers, Yang said.
This month, PhotoWhoa will have revenue of $40,000, Yang said.
“That’s a small drop in the bucket,” Yang said. “The photography industry is growing at 8 percent a year.”
And PhotoWhoa wants to change the way photography products are sold, Yang said.
Getting the first 1,000 customers was the hardest, Yang said. But the class helped accelerate their business, he said. They learned from mentors how to maximize their use of Google Ad words to reduce their customer acquisition costs from $5 to 75 cents. They also learned how to build a network.
“Through Josh Baer we’ve been able to connect with people to do deals with,” Yang said.
PhotoWhoa is completely bootstrapped. Each founder put in $250 to startup the company. Five months later, PhotoWhoa is profitable and growing, Yang said.
Damon Clinkscales, an Austin software developer, volunteers with the 1 Semester Startup class as a mentor. He generally spends two to four hours a week helping Personab.ly, the company he helped out.
“I guess you could put as much time into it as you choose to,” Clinkscales said. He also served as a mentor for the first 1 Semester Startup Class last fall. This class is smaller and more focused, Clinkscales said. They chose companies that were beyond the idea phase, he said.
“It is really awesome that they are getting this experience now,” Clinkscales said. “Just imagine them in a few years.”

University of Texas’ Spring 1 Semester Startup Demo Day tonight

If you don’t have plans tonight, snag a ticket to 1 Semester Startup Demo Day.
It starts with drinks and appetizers at 5 p.m. and then the program kicks off an hour later with Bob Metcalfe, one of three instructors in the program and professor of innovation in the University of Texas Cockrell School of Engineering, interviewing James Truchard, president and CEO of National Instruments.
The event runs until 9 p.m. and is open to the public. It takes place at the LBJ Auditorium at the LBJ Museum and Library at 2313 Red River St.
This is the second 1 Semester Startup Demo Day. We covered the first one last fall. The Spring class is half the size of the last one. It has just 35 students and 10 companies, compared to 75 students and 20 companies for the first class. And in fact, four of the 10 student startups were in that last class. They include Solspot Systems, PowerSmart Labs, Predictable Data and Stache Studios. The other startups include AgreeOn, BeDJ, Stick.it/Breadcrumbs, NowOnCampus, Photowhoa and ReQwip. 1 Semester Startup has full descriptions of the companies on its site.
The startups will each give short pitches to investors and the rest of the audience. In addition to Metcalfe, 1 Semester Startups instructors include Joshua Baer, founder of Capital Factory and with the Department of Computer Science and Johnny Butler of the IC2 Institute and the McCombs School of Business.
For the Spring Semester, the 10 1 Semester Startup companies resided in the Longhorn Startup Camp along with 27 other student startups.

State of Austin entrepreneurship at the Future Forum

Austin is one of the best cities for young entrepreneurs as ranked by Under30CEO.com, which listed the city third in 2011 for startups behind New York and San Francisco, according to the Future Forum at the LBJ Library.
The Future Forum recently held a panel discussion on the “state of Austin entrepreneurship.” Joshua Baer, one of the panelists, a serial entrepreneur and CEO of OtherInbox, uploaded this video of the event to Youtube. Other panelists included Clayton Christopher, Founder of Sweet Leaf Tea and Deep Eddy Vodka and Adam Dell, entrepreneur and parter at Austin Ventures.

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