Three months ago, a group of entrepreneurs moved into Geekdom in downtown San Antonio.
Since then, the inaugural TechStars Cloud participants have been toiling away and working to create blockbuster cloud businesses that will change the world.
Some have iterated, pivoted and overhauled their operations countless times. Names have changed. Teams have mixed it up.
But in the end, 11 companies stand ready to present today at the Charline McCombs Empire Theatre in downtown San Antonio.
The event kicks off at 9:30 a.m. and ends around 2 p.m. But a reception later in the evening at the Weston Centre will celebrate the accomplishments of this group of entrepreneurs and their leaders, Jason Seats, founder of SliceHost and Nicole Glaros, managing director of TechStars in Boulder, Colo. Seats and Glaros ran the TechStars Cloud program.
The TechStars Cloud focused on cloud computing and cloud infrastructure. Its mentors included Pat Condon, founder of Rackspace, Jeff Lawson, founder and CEO of Twilio, Brad Feld, head of the Foundry Group, George Kardis with SoftLayer, Rajat Bhargava, founder and CEO of StillSecure and dozens more.
All of the companies received $18,000 and access to more. Today, some of the companies will ask for investment capital, while others are fully funded. The audience will include venture capitalists and angel investors.
Tag: Rackspace (Page 5 of 7)
At the Starbucks across the street from Rackspace, Stacey Zuniga, a founder of Unwired Nation, last Friday talked about the company’s latest partnership.
“We’re here to enable the enablers,” Zuniga said.
Austin-based Unwired Nation creates a mobile app platform for companies. It recently joined the Rackspace Partner Program to offer mobile apps as a service to select Rackspace customers.
Stacey Zuniga, founder of Unwired Nation
Every company wants a mobile app for its business, Zuniga said. Unwired Nation can deliver uniquely branded apps quickly and cheaply, he said.
The problem is that for many large companies like car dealerships or pharmacies, it’s difficult for them to offer their customers a mobile version of their app across all the different types of mobile phone platforms.
But Unwired Nation can create a mobile app for them that scales to fit the size of their business, Zuniga said.
Founded in 2004, Unwired Nation has gone through several changes or “pivots” as its known in the startup world. Now the company focuses solely on delivering mobile applications through its platform that focuses on delivering affordable, scalable business functions.
“In this space, we’re the non-sexy solution that makes money,” Zuniga said.
Driving Force Auto in Houston with hundreds of dealerships is one of Unwired Nation’s customers. So is Q2ebanking, an online banking company. Rackspace chose Unwired Nation to partner with because “they happen to be in our backyard,” said Schroepfer. “Their technology seems unique.”
Unwired Nation has created a special messaging system that operates in the background of the app. It allows the app developers to closely communicate with customers and it keeps all the messages in one place.
“That solves some real problems,” Schroepfer said. “There is some real intellectual property to making mobile rich. We want to have that solution be available to our customers.”
“Mobile is not going away,” he said. “It’s only going to get bigger.”
Rackspace launched Appmatcher aimed at businesses. It’s still in beta form, Schroepfer said.
“We launched a marketplace in a crowded marketplace,” Schroepfer said.
Rackspace and Unwired Nation have selected certain markets to target and they have identified customers that would benefit for the mobile app platform, Schroepfer said.
Unwired Nation with 15 employees is ready to gear up for the new customers, Zuniga said. Late last year, the company closed on a $6.5 million round of funding that will help the company expand.
Rackspace is a sponsor of SiliconHillsNews
Running a technology startup takes perseverance, money, luck, talent and the ability to adapt quickly.
That’s the takeaway from Bill Boebel’s Startup Ignite talk at the Geekdom in San Antonio Friday night.
Boebel, now an angel investor and managing director of Capital Factory in Austin, gave the audience of about 60 people an overview of how he co-founded Webmail.us and later sold it to Rackspace Hosting.
In 1999, Boebel and his friends, Pat Matthews and Kevin Minnick, founded FieldParty.com, which created searchable city event directories. They dropped out of Virginia Tech University just 20 hours short of getting their degrees to work on the business full time. FieldParty.com raised $120,000 in angel money, largely from friends and family, and on March 10, 2000, the website launched – the same day the Nasdaq started crashing when the great Dot Com bubble burst.
“The world changed the day we launched,” Boebel said.
Immediately, potential investors stopped returning calls, he said. “The website was live in three cities: Blacksburg, Charlottesville and Harrisonburg, Virginia.”
That’s when the company changed names to Exedent Technologies and pivoted from searchable directories to creating content management systems for events for newspapers. The company landed 20 customers paying $50 to $100 a month.
Exedent gave away the product for free to the Virginia Tech University newspaper to serve as a reference customer for other newspapers. The problem was “the newspapers didn’t understand the Internet,” Boebel said. “They thought it was a threat to put their content online.”
So Exedent created a general-purpose content management system.
“It was a pretty cool product at the time,” Boebel said.
But Boebel, Matthews and Minnick had $100,000 in credit card debt and the company was running out of money. Exedent laid off its entire workforce except two employees who received minimum wage.
The company pivoted again into a company that would “do anything for a buck” including content management systems, webmail hosting, search engine optimization and website development.
“We would do whatever people would pay us to do,” Boebel said. “With each change we had confidence that this was the right path.”
Then, the money just about ran out and Boebel said he “thought about quitting.”
Matthews took a job selling books door to door. Minnick took a regular job to support his family. They all decided to go back to college and work crazy side jobs to keep the business afloat. They moved the offices into the basement of a townhouse.
In 2002, they got lucky. Spam and viruses started to plague people’s email inboxes on the Internet. The company started heavily promoting its secure email hosting services. Boebel, using his search engine optimization skills, secured the top keywords for “email hosting” and “webmail” on Yahoo.
“Overnight, it started to become clear that the email thing was a thing,” he said.
In yet another pivot, they added a “c” to the company’s name to create Excedent and decided to focus exclusively on email and “build the most kick ass email company.”
“We had only $1,200 in the bank and no credit to draw from and servers to pay,” Boebel said.
Its bill for Server Vault, a hosting service, cost $1,200 a month, he said.
Luckily, the company landed its first major customer and asked for a $50,000 prepayment. That along with $30,000 raised from a private investor and a $50,000 bank loan from a friend, and the company was funded, Boebel said.
They took advantage of the fact that big companies didn’t quite understand that if a company had a professional looking website that they could still be in the basement of a townhouse, Boebel said.
Also, for two years, they paid pennies for search engine keywords that led to “awesome leads” and customers, he said.
At the end of 2002, the company had $250,000 in revenue. Minnick quit his other job and went back to work for the company full time. The next year revenue doubled with 1,200 customers. They ran a lean operation, Boebel said.
“Lean wasn’t cool back then,” he said.
In 2004, they rebranded the company to Webmail.us and focused on the small business market and partnered with Rackspace as a reseller of its services. Webmail.us had more than 500 resellers. It moved its servers from Server Vault to Rackspace. They also moved the company to the Virginia Tech Research Park and switched from a Windows-based system to Linux and open systems. By the end of the year, the company had $1 million in revenue and 4,000 customers and eight employees.
At the end of 2004, the company also raised $500,000 in venture capital from local angels and Pat Condon, a founder of Rackspace.
In 2005, the company had revenue of $2 million, 13,000 customers and 25 employees. Webmail.us was the place work in Blacksburg, VA and the company got its pick of computer science graduates from Virginia Tech University.
Then in February of 2006, Google launched Gmail, Webmail.us’s first real competitive threat, Boebel said.
Despite the threat from Google, business continued to grow. By the end of 2006, Webmail.us had $4 million in revenue and 30,000 customers.
In 2007, Webmail.us was looking to raise $3 million to expand the company’s operations, but it never closed on the round, Boebel said. Instead, Rackspace acquired Webmail.us in September of 2007. That year, the company had made Inc. 500’s list of fastest growing private companies, ranking at number 217.
When Rackspace bought Webmail.us, the company had revenue of $8 million, 72,800 customers and 65 employees.
“By this point, Rackspace was our largest reseller and we were their fifth largest customer,” Boebel said. It was Rackspace’s first acquisition.
“Essentially, we had the autonomy to run the hosted email business inside Rackspace,” Boebel said. Webmail.us moved customer support to San Antonio but continued to grow the Blacksburg offices.
From 2008 to 2010, Boebel worked at Rackspace and continued to double the email hosting revenue annually. He left the company and moved to Austin two years ago.
Austin has a more developed ecosystem for startups than San Antonio, Boebel said. It’s also a great place to raise a family. He is married and has a two-year-old son.
“A lot of things are happening in San Antonio, but not a lot of things are bringing it together,” he said. He said he hoped Geekdom would change that and serve as a catalyst for San Antonio’s technology community.
Today, Boebel acts as an angel investor in several technology startups, primarily based in Austin. His investments include WP Engine, a WordPress web hosting site and InfoChimps, a data management business.
His investment criteria centers on the people behind the startup.
“I’ve just got to really like the team,” Boebel said. “I definitely look for ones where I get along with the team really well.”
At Webmail.us, the founders hired people they liked and wanted to hang out with after work. That’s the same strategy Boebel uses in his investments.
(Rackspace is a sponsor of SiliconHillsNews.com)
And Cerealize, a site that allows people to make a customizable box of breakfast cereal, won the 2012 Startup Bus competition, according to this Fox Business News Story.
The Startup Bus Finalists were:
Bumper Crop (Florida)
Happstr (NYC)
Scoringo (Louisiana)
Gourmair (Stanford)
Adventeur (NYC)
Spott (Mexico)
Cerealize (SV)
Curious City (DC)
At Rackspace headquarters, a slew of startup bus entrepreneurs pitched their ventures to a panel of celebrity judges Friday morning.
Among the judges, Dave McClure, serial entrepreneur and head of 500 Startups, gave them frank feedback, laced with a lot of F-bombs.
Dozens of entrepreneurs, from startup buses that originated in San Francisco, Boston, Cincinnati, Florida, Las Vegas, Los Angeles, Louisiana, Mexico, New York, Stanford University and Washington, D.C., bravely presented their ideas in front of the panel. They spent the last three days traveling first to San Antonio and then to South by Southwest where they will compete in a semi-finals round Saturday and finals on Sunday. The Rackspace event sought to help prepare them.
The startup buses have become an important part of the startup culture surrounding SXSW. But the concept started in March of 2010 as a joke, said Elias Bizannes, its founder. In the last few years, the startup bus has taken on a life of its own. This year’s contingent is the largest ever. A competition was also held in Europe last November, Bizannes said.
“Our focus is more on the people and not the products they build,” Bizannes said. “A lot of people have come out of this and gone on to raise money and start ventures.”
A guy from the New York startup bus last year raised $2 million from venture capitalists recently, he said.
And several of the startup bus entrepreneurs who pitched on Friday sounded like they had good business ideas.
Some guys on the Las Vegas startup bus hatched the idea of providing a print product comprised of all the postings on various social networks a person does in a year called YearInPrint.com It’s sort of like a yearbook of your life on social networks.
The retro futuristic idea got some love from Nicole Glaros, managing director of the TechStars Cloud.
YearinPrint.com has already signed up 100 users and it just launched Friday morning on the bus. That’s pretty impressive, said Robert Scoble, a blogger and Rackspace employee, who moderated the event.
“They actually have a product that works and you can use it,” Scoble said.
McClure told the entrepreneurs to present their ideas clearly in the format of customer, problem and framework.
He also yelled at the audience when the crowd got too loud.
“Hey you, shut the fuck up,” McClure said. “This is actually interesting.”
SimplyApp.com pitched their idea “Pinterest for geeks.”
“Who the hell cares?” asked McClure.
The head of TwoToursandalie.com said he registered AwesomeLobster.com and then pitched his tour service to McClure. McClure was not impressed.
“You bait and switched,” he said. “If you’re going to bait and switch make sure to pitch something awesome.”
McClure said the pitch was “fucking awful” and told the guy to get off the stage and hand the microphone to someone else.
Cerealize.com, a customizable cereal service that delivers the stuff to your door, presented its whimsical idea for cereal creation. It’s interested in getting a foothold in the customizable foods market. In just a few days, they were able to design a logo and launch a webpage.
The personalization includes the cereal box, Scoble said. “My kids could each have their own box of cereal with their picture on it.”
“This is the best idea I’ve heard all day,” said a judge. But he said the company would face a nightmare in sourcing ingredients.
The panel liked the nine-member team of Cerealize.com because they displayed passion and commitment to their product and they made others believe in their success.
GivingLight, an idea from the Washington, D.C. startup bus, presented its neighborhood service to help people for free to receive good Karma.
“What’s the business model?” asked Scoble.
“Corporate sponsors,” said the woman pitching GivingLight.
It’s an awesome idea, but it doesn’t fit the investor model, said Glaros with TechStars. But she said she would donate money to it.
A startup bus group pitching itself as a semester aboard for entrepreneurs got some traction from McClure.
“I kind of like this pitch,” McClure said. “It’s a narrow market but I think this is kind of interesting.”
A woman presented Curiouscities, an alternative lifestyle for adults interested in finding sex sites in different cities focused on fetishes and other stuff.
“How do you get your content?” asked a panel member.
“It’s all in the community,” she said.
“Best pitch today,” said McClure. She covered the customer, problem, target market and provided a solution.
Clrme.com is a crowdsourced reputation site for people.
“A platform for people to tell it like it is,” said the guy pitching it.
A panel judge said the name was awkward and it’s not a word so it’s difficult for people to find and understand. He recommended that they get the .Co website and spell the name out.
Two guys pitched, Taxcast, a site focused on providing tax information to artists and other creatives. They said “We are fucking revolutionizing tax today.”
McClure smiled at that.
McClure said the pitch was good for the first 30 seconds, but he doubted that people needed instant access to information about their taxes and their tax refund.
“I fucking don’t believe it,” he said.
The room became really loud with almost everyone talking at once. Glaros asked everyone to see how quiet they could get the room. It quieted down immediately.
“Punch the person next to you if they talk,” Glaros said.
Several startup bus entrepreneurs wanted to pitch their ideas but only 30 minutes remained. So Glaros came up with the idea to let each team present for 30 seconds and at the end they got a thumbs up or a thumbs down. If the panel liked the idea, the entrepreneur received additional feedback. If not, they had to leave the stage.
First up, PopcornU.com pitched its augmented education site for kids.
“That was clear,” said McClure. “But it kind of sucks.”
PopcornU exited the stage vowing to be back.
A site pitching itself as beer goggles for Twitter got voted off stage.
Open Wallet pitched a site that lets people get money from people nearby using a mobile phone. People broadcast their need and others nearby finance them. With Open Wallet, everybody becomes an ATM. They got a thumbs up.
One of the judges said it’s going to be very easy way to steal money from people. McClure asked if they have any background in fraud prevention.
“There’s a business here somewhere,” McClure said. “It’s peer to peer payday loans.”
Jay Hancock pitched Hancockapp.com, an app that creates simple contracts.
“It’s like having a lawyer in your pocket,” he said. He got a thumbs up from the panel. They liked the idea.
The judges also advised the startups not to put a dash in their domain name.
Wastebits.co created a business to business online platform to connect the creators of garbage with disposal services.
“If this doesn’t exist, it’s really interesting,” Glaros said.
“It’s hot,” said the guy pitching the waste company.
The panel generally liked the waste disposal company idea.
BumperCrop.co from the Florida statup bus pitched an application to connect home-based farmers with consumers. The panel liked the idea.
TimeClutch.com from the Boston startup bus billed itself as a Flipboard like experience that curates social activity around events. It launched today and already has three sponsors for SXSW. The panel asked how it differentiates itself from Storify.com. The app is event focused and automatically curates content on an event. The panel seemed to like that. But the entrepreneurs still had work to do.
“You’ve got to work on the pitch,” McClure said. “It sucks.”
T
he last company to pitch wanted to spread happiness, Happstr.com. It already has had 300 check ins. The idea is to find happy places using a location based app.
“Find your happy place.”
And on that note, the panel wrapped up.
Full Disclosure: Rackspace is a sponsor of SiliconHillsNews.com
The cloud hosting wars are starting to heat up in central Texas.
Emil Sayegh, President and CEO of Codero Hosting
“In the next six months, Codero plans to add additional staff to its current headquarters in Lenexa, Kansas and office in Phoenix, Arizona, and open a new office in Austin, Texas where the rapidly growing technology industry offers a highly skilled pool of technology workers and prospective customers,” according to a news release.
Sayegh previously led cloud computing and hosting businesses for HP and Rackspace Inc.
![Rackspace® — [INFOGRAPHIC] Cloud Computing Services: Evolution of Music in the Cloud](https://c179631.r31.cf0.rackcdn.com/Infographic_Music_in_the_Cloud_Final02.png)
By all accounts, Rackspace Hosting is a fun place to work.
It ends up on lots of lists for best places to work including this one. It’s San Antonio’s largest high-tech employer and has an office in Austin and San Francisco.
But who loves their job enough to want to get married there? A couple of “Rackers” – the company name for its employees. Last week, Nathan and Meghan Spells tied the knot at Rackspace’s headquarters, which is dubbed “The Castle.”
On that same day, Friday, Feb. 10, Racker David Sims took his camera around the company and produced this video, which gives a good insight into what it’s like to work at Rackspace.
Disclosure: Rackspace is a sponsor of Silicon Hills News
By Luke Carrière
Lead Organizer of 3DStartup NYC
In August 1994, Nick Longo founded a coffee house in Corpus Christi, Texas, which became one of the first internet cafes in the world. He created a website for his coffee shop and began designing websites for others in his community. By 1996 it had became so popular that he designed software to help people make their own websites and called it CoffeeCup Software, Inc., a startup that went on to win Shareware Industry Awards Foundation (“SIAF Awards”) for Best Web and Internet Software for six years from 1999-2004. In 2000, Nick founded then spun-off Bluedomino Web Hosting, which hosted over 15,000 websites. Nick is now at Rackspace in San Antonio, Texas as “Chief Rainmaker & Director of Strategic Initiatives.” One of the initiatives he is involved in is a collaborative workspace for entrepreneurs called Geekdom.
How did you recognize the opportunity/research the feasibility of the idea?
That’s a good starting place. That was from being a user first. I think a lot of good ideas come from saying to yourself, “hmm this isn’t done right,” or, “I could do this better.”
So, opportunities seem to be right in our own backyard. We are really good at our hobbies and things we do everyday. For example, I’m a webmaster and I don’t like the tools that are available. The idea comes about to make my own software so life will be easier for me. If I can make my life easier for myself, then it is probably going to make someone else’s life easier too. That is exactly how CoffeeCup was formed. I wanted to make my life easier. I had an intuitive sense at it was going to help others because they must be running into the same problems.
How did you finance your business?
I started with just a Master Card. I bought a $500 computer. I setup the computer in my coffee house and slept on the floor for the first year. I spent 24/7 focusing on creation and distribution of software. I took no financing.
What did you do with initial profits?
I wasn’t concerned with paying myself the first year, except for minimal stuff. When I had to make the first hire, I stockpiled cash because I would need another developer. I used the income I earned early as my bootstrapping money. So, I would “save, save, save,” and then hire to make more software. It was really a bootstrap deal.
How long did it take for your company to become profitable?
Within the first three months I was able to close the coffee house. I paid myself as much as I could, of course, I was keeping it really low. At the end of year one I had already made another two pieces of software.
How did your idea change throughout the process?
Originally I put it out for free. But a few things that changed. First, I had no idea how big the market was going to become. I made an HTML editor and that was all I planned to make. Then, a few months later, I realized there was a lot more opportunity and I need to make more software. My original intent was only making an HTML editor. But by the time I was done there were 35 pieces of software. That was a major shift.
Did you ever think of giving up? If so why?
I’m not a big fan of the “fail” methodology. If I were operating on a “fail fast” mindset, I would have been discouraged at month 3, and at month 6. When you are doing it by yourself, or only one other guy, you have all these aspirations to make a million dollars, and then you realize you can barely pay yourselves. That can be discouraging. I don’t have a “fail” bone. I say to myself, “I am going to ride this out as far as I can for as long as I can before it fails.” When I start something I don’t start believing its going to be successful, I start believing that I don’t want to fail. I always keep this little “fear of failure” thing in my pocket. I don’t worry about it succeeding, I just don’t want to fail. That can be a major driving motivator. Sometimes it’s not healthy. I’m more concerned about paying the rent.
What was your initial role? What is your current role in the company now?
We didn’t use the word “startup.” Starting a new business automatically made me a founder. As business develops and you add more products and there are more revenue and profits which increase the amount of problems like taxes, accountants, insurance and employees. The role shift goes from Founder to CEO, and that is a hard transition to make. Founders have fun: CEO’s not so much. Then it becomes a daily process and a monthly process of watching numbers. Before I sold my business I spent more time during the last half, 5-6 years, hitting refresh and checking revenue and planning marketing and sales, than I did in the first half.
What are the most successful marketing techniques? Guerilla marketing?
Everything I do is guerilla. Try to spend least possible on anything normal. In 11 years I spent approximately $100,000 in total marketing costs. We did a lot of one-on-one marketing to our distributors like CNET and other download sites. We would take those guys out to parties, which was cheaper than paying for advertizing. In return, they would give us way better advertising spots than we could ever afford by being cool with them. I’m a big fan of contests. I’ve given away Super Bowl tickets, a Rolex, a Mercedes: I’m really big on contests. Surprisingly, that is cheaper than having a marketing budget. We would raid conferences, like crashing a wedding. We wouldn’t even buy tickets. We didn’t even look like we should be there. We handed out our software up and down every isle. I’d rather have a developer than spend money on marketing. It did take a lot of tricks to walk through the back door to get to the front door.
What is the worst advice you have ever received and why?
Well, to be honest with you I didn’t really take peoples’ advice. Our culture was a little weird. We used to talk about being in a petri dish. You were either in the petri dish or your not in the petri dish. We didn’t let much in and we didn’t go out of it. We were really making our own rules. I didn’t take much advice.
The best advice I got was to make it shareware and actually sell it and timeout the software. I remember that. It was from one of the founders of download.com. Besides that, we weren’t taking much advice. To me all advice was bad. If we ever heard it, it usually didn’t match what we were doing because the company was very rouge.
You were trailblazing?
If you want to call it that. If our attempts didn’t work it was okay because it was the internet. You could delete it and it goes away and its not a big deal. If you released software and no one bought it you could delete it and move onto the next project. We didn’t invest too much time in any one specific piece f software. We were developing software in really short amounts of time, the epitome of agile development or rapid application development. We would say, “if we add this feature…wait, lets just make it its own piece of software.” Every 2-week and 4-week blocks we were delivering another piece of software.
Which part of your job is actual work opposed to passion?
You’re mostly driven by passion, not by what the outcome will be. If you love what you’re doing you are probably going to get a good result. That doesn’t always have to mean money. Even today, CoffeeCup is pretty well known. We were trying to help people change their lives by using our software so they don’t have to work for the man any more. That made us anti-establishment. That drove our passion. All the people who worked for us were that way.
We didn’t follow any process. The smaller the team, and closer we are together, the more money we can make, and the more we can do what we believe to be the right thing, which was to make software cheap for everyone, so they don’t have to work for the man. If that was the mission, it was passion driven. It means 24/7 hours, but passion doesn’t have to be about hard work if your having fun. If you are having fun, it shouldn’t be work. So, if you find yourself thinking you are working too much it probably means you are losing some of the passion you started with on your first day.
How is the economy effecting your business?
I think that is product driven. During my tenure at CoffeeCup we went through the Dot Com Bubble Burst, and 9/11, and another stock market crash. Those were actually opportunities. When the economy is down people lose their jobs, which means more people want to do their own thing. More entrepreneurs and startups are born when the economy is down. CoffeeCup was there through a lot of the bad, but we made out better because of it.
If everyone has tons of money they will buy the expensive software, regardless of whether it works well or not. We were there for beginners and intermediates. It was perfect in goods times and bad. In bad we did better. That is an awesome market to be in: a business that is recession proof. I would always be looking for that.
There is a big difference between needs and wants. For example we need a car, we want a Mercedes. You are better off selling products or services that people need. “Want businesses” are hurt the most, not the “need businesses.”
What is your advice to future entrepreneurs?
First, find the thing that people need, not what they want. Second, absolutely do the thing that you are passionate about, not the thing that you think is going to make money.
Those are two super super important things. Right when you find the striking balance between those, that is when you will find yourself successful: worrying less about failing but knowing that it is still there.
Don’t drive for success: drive not to fail.
Reprinted with permission from 3DStartupNYC
