Ready to point your Start-up in the right direction

Here in Beantown, we like to think that one of our strengths is the community. Wherever you go in Boston the pride that comes from being part of the city is evident; replica jerseys from each of the four major sports played here are always prominently displayed, the college system continues to produce graduates who want to make a difference locally and those in businesses seem to thrive on co-operation as well as competition.

Nowhere is this more evident than in the start-up community and every week there is a plethora of events that seek to marry the budding entrepreneur with the right investment partner, although sometimes that may involve looking beyond the state line.

This was certainly the topic of discussion at the offices of Bingham McCutchen, hosting the regular Evening Roundtable organized by our friends at The Capital Network. TCN is a non-profit organization that provides educational resources for local entrepreneurs who are taking the first steps into seeking funding for their venture, and last night the seminar asked the question: Can Your East Coast Based Start-Up Raise Money from West Coast VC’s?

Finding the right VC is a serious business.

Putting aside the recent NBA Championship in which the Celtics finished runners-up to a West Coast team, the event was well attended and local start-ups were treated to a spirited discussion between the East Coast representatives – Ryan Moore (Grandbanks Capital), Rob Seaver (Vivox) ,Mike Conza (Bingham) – and  the West Coast team of Phyllis Gardner MD, Ray Carey and Alan Kalin who, via satellite link, were “live from Palo Alto”.

The obvious answer to the question posed should be Yes, but over the course of an hour the panel went into significant detail as to why.

They discussed the pros and cons of inter-coastal bonding; the (very real) possibility of relocation, the perceived diligence of West Coast VC’s, the importance of inter-personal relationships, the difficulties in having a VC who is not geographically suited to the East Coast, the convergence of East and West coast terms and conditions, and importantly, what businesses are being invested in.

Since 2007, West Coast investors have participated in over 500 East Coast start-up or follow on financings totaling over $7 billion. The majority of these investments have been in Healthcare, although during the current financial situation the scale of investment from our friends in the West to the shores of the East Coast has decreased. Despite this, in 2010, 62 East Coast companies have seen the West Coast pony up some cash.

Of course, once investment is secured, the more successful businesses may find it hard to resist the lure of the West. Figures provided by the panel showed that 97% of successful tech companies are sold – normally to firms based in Seattle or California- and (according to Ray Carey) West Coast VC’s do replace management more often because “You get paid more, but the hurdles are higher.

Ray Carey, who left Massachusetts for California, believes that the reason for this is simple, saying “nothing beats having a compelling business” although he stressed that “I need the money is not a compelling event” something that the panel agreed on. The problem seems to come from East Coast entrepreneurs who (according to Ryan Moore) “focus on the down side”, sometimes to the detriment of their business and can miss the boat by waiting too long to make the first move.

Rob Seaver, whose company Vivox received funding from both East and West Coast VC’s – a Tier 1 firm based in Waltham, Benchmark (WC) – sees the personal bond that is formed between the start-up and the VC as integral to the deal and commented that “so much more that goes into creating a successful business than capital, if the relationship is to be successful, you have to be able to work together.” Again something that may not always be possible when an entire continent separates the company and its investor.

With so many start-ups here on the East Coast, and the envious glances that are occasionally thrown in the direction of the West, events such as the one organized by TCN last night are an invaluable first step for Boston’s enthusiastic business community to get some guidance from those who have experienced the special friendship of East and West.

Ryan Moore summed up the whole process perfectly by calling it the ‘Jerry Maguire Effect’, in other words “Help me… help you. Help me, help you.” Although, even he was unable to provide the right advice for one attendee who needed $100,000 for her “breakthrough technology” by Sunday.

If all else fails, there is always the possibility of Shark Tank.

What do you think about the East vs. West coast funding opportunities?

For a while I thought it was just a personal observation. Running and entrepreneurship have both meant a lot to me at different times in my life, so it was all too easy to draw parallels. Then at various events across Boston, I began meeting quite a few entrepreneur-runners and many entrepreneurs with a distance running past. If it wasn’t running, then it was a sport requiring the same commitment, endurance, confidence in one’s own individual abilities, and high tolerance for, let’s be honest — cold, hard pain.

Our shared traits as startupers and athletes became impossible not to notice.

To me, the most interesting aspect of the entrepreneurship/distance running metaphor isn’t the glory of achievement; it’s this bit about pain or discomfort and a willingness to wrestle with associated feelings of self-doubt. We don’t always like to talk about it, but building a successful business is often a long and difficult process with unforeseen, personally frustrating challenges along the way.

For those of us in need of startup funding — especially social entrepreneurs largely reliant on grant-makers — the most painful part of it all is the constant search for seed capital. As innovators who seek to do things differently, it can get tiring working day after day to convince more and more people that our business model works or that our company is worth the investment. But growing our businesses generally requires creating a devoted following of customers, so this is work that has to be done.

On bad days, challenges like these feel like the professional equivalent of a side stitch for a beginning entrepreneur or a bad case of shin splints for the entrepreneur who has been at it for a while. Quite often, an entrepreneur’s pain just looks like fatigue.

We begin to wonder how much longer we have it in us to keep going.

But the fact that we do keep going is what demonstrates our potential for making all the difference in terms of our performance. I say “potential” because there are two ways to keep going: We can continue doing all the same things while expecting different results — the definition of insanity — or we can keep going by making regular adjustments to our form, trusting our instincts and training hard, and reminding ourselves to breathe. We can adjust our speed and reevaluate, just as in running.

Entrepreneurship tests our resolve like little else, especially in a tough economy, if we’re new on the scene, or if we don’t have the same access to resources as others. If running taught me anything though, it taught me that there is something to be said for sticking with an endeavor through all the pain and discomfort, paying attention to it and trusting it will pass.

Pain isn’t any fun, but it’s helpful because it tells us something isn’t working, something needs to change. Often it just means we’re growing new muscle.

To fellow entrepreneurs who may need to hear it — whether or not you’ve ever been a runner — I write this to remind you to notice what’s hurting in your business and think about how you might want to begin doing things differently. I write this to reassure you that you are actually moving forward, though you may not feel like you are sometimes. I write this to say I admire your tenacity and courage, and I wish you a second (or third) wind if you feel like you need one.

Here’s to you, entrepreneurs feeling the burn. And here’s to continuing on when the going gets rough.

What have you found entrepreneurship and sports to have in common? How are your current challenges similar something you’ve experienced in sports? What are your tips for continuing on when the going gets rough or when you clearly need to reevaluate your business strategy?

Alexis is a freelance writer and editor and co-founder of The New Prosperity Initiative (NPi), a media organization dedicated to knowledge sharing in the social justice field. Lex serves on the board of directors of The Writers’ Room of Boston, is a “Connector” for Boston World Partnerships, and holds a B.A. in Government from Smith College.

Aaron wanted to differentiate the Husky Innovation Challenge from the standard business plan competition framework by providing a series of strategy boot camps and guest mentor speakers. The boot camp topics include strategies for creating market research studies, learning to identify financing needs, and even how to prototype an initial idea. Guest speakers include Bettina Hein of Pixability, Michael Sheeley of FitnessKeeper (creator of RunKeeper), Bobbie Carlton of MassInno, Josh Bob of Textaurant and many more.

The event hopes to bring together the Northeastern Community and Boston’s rapidly growing startup community. Friday night will be full of excitement as the participating ventures will be competing for 5 different awards: Game Changer, Sustainable Venture, Audience Favorite, Time to Market, and Best Presentation. The winner of each award will take home $1,000 to help seed the venture.

The Bostinnovation team wishes luck to all of the student ventures competing!

A text message when your table is ready? I wish I'd thought of that.

Look out Boston; it may be that the way we reserve tables is being revolutionized right across the Charles River.

Textaurant is a new area startup that makes restaurant wait times a thing of the past. The SMS based notification system has already been installed in two restaurants in the Boston area, so you can check it out for yourself. (Who would have thought being an early-adopter could taste so good?)

If you’ve ever waited at a chain restaurant for a table to be ready, you’ve probably handled one of those clear plastic coasters with the red LEDs in it. It looks like something from Toys “R” Us, and is meant to buzz and light up when your table is ready. If you’re anything like me, you’ve sat in the restaurant waiting area or bar staring down your space-coaster and trying to will it to life with day-dream superpowers. At this point the coaster starts to look a lot like an iron ball chained to your ankle.

What’s the range on this thing? Can I grab my cell out of the car without missing my alert? Why can’t I poke around the neighborhood shops if I have to wait a half-hour anyway?

Josh Bob, CEO of Textaurant wondered the same things but, unlike the rest us, he did something about it. By developing a table notification system that automatically sends an SMS message to your phone, Textaurant breaks the chain connecting you to that wretched, outdated coaster, and leaves you free to roam the surrounding area.

Textaurant notifies you five to ten minutes before your table is ready, depending on how it’s been set up by the restaurant, so feel free to deposit that check, or try on some pants (depending on your wait). Just keep an eye on your phone.  It will tell you to head back for some waiti-free grub. No need to stress about it, though. If you miss your table notice, the Textaurant system just pushes your seating time back to the next available table, and the process begins again.

I had a chat with Josh Bob, and he sees endless possibilities with Textaurant. For example, an iPhone app could be forthcoming. You may soon be able to check local restaurant wait times, put yourself down for a table, and be shown nearby time-killers all with a few prods on your touch-screen. Bob also mentioned customization options so that Textaurant can “help customers find other restaurants they would like,” and he indicated that users with long wait-times may be offered sweet deals from local retailers to help make their waits more tolerable.

For many restaurants, the risk of decreased bar revenues can easily be made up with fewer walkouts during the dinner rush. As a result, Textaurant is having little trouble finding restaurants to try the system out, and with two installations complete, “we’re blowing up,” exclaims Bob.

The system has already débuted at Asgard Irish Pub in Central Square, Cambridge, but Bob reports the wait times haven’t burgeoned enough to really put Textaurant to the test. Tupelo in Inman Square, the second restaurant Josh has recruited, will be testing in the next couple of weeks, and unlike Asgard, it has a reputation for long waits.  Keep an eye on Textaurant’s Twitter page for a launch date, and look for other restaurants to join in as well.

Textaurant sounds like a dream come true, but it is yet to be seen how it will perform in a busy restaurant setting. If you happen to check it out, let us know your thoughts in the comments section below.

WebInno 24 was this Monday night

The twenty-fourth monthly Web Innovators Group gathering was Monday night. After two years in existence, it’s really become a hotspot for locals in the tech community. For those of you that didn’t make it, here’s a recap of who was there and what went down.

After an open networking sesh for people to swap business cards, we all convened in the grand ballroom at the Royal Sonesta in Cambridge to check out the featured startup presentations. Three were showcased this night.

Survey On The Spot — www.surveyonthespot.com

Just under a year old, this startup by On The Spot Systems was the most popular presentation, taking home the audience choice award after an American Idol-style text vote. Their service provides businesses with a way to make custom surveys for customers to fill out via mobile app or online. Companies get valuable consumer data, and participants are incentivized with coupons and other prizes for completing each survey. They are already beta testing with AuBonPan, along with a couple others and co-founder Ken Kimmel told me, “Everyone has been extremely positive.” Had I an iPhone, I could definitely see myself thumbing in a quick survey to kill time on the T and grab some discounts, so they won my vote for their viability.

thredUP — www.thredup.com

thredUp was the second most popular by audience vote and is a service that works on a Netflix-style mailing model, except you’re stuffing envelopes with clothes. The idea is that people who have clothes they never wear can swap those items for other people’s unwanted clothes with thredUP playing the role of middleman. Their system allows you to punch in what you have available and what you are looking for, but I got the sense that once you send something off, it’s more or less a gamble what you get in return. While this sounds like a lot of fun to do maybe once or twice, I couldn’t figure out how this system was more effective than a trip to the Salvo or Goodwill. That being said, the presenter made a good point in saying this could be a good service for parents whose kids are constantly growing out of their clothes.

ZoomAtlas, Corp. — www.zoomatlas.com

Third in the live voting was ZoomAtlas, an online satellite map service that allows users to play with a graphic overlay of a satellite image of the U.S. to post notes, stories, etc. The concept was sound: an interactive map with social media elements, but the graphic overlay reminded me why I never played The Sims. Still, I think this idea has a lot of promise, and with a couple graphical upgrades, it could be an awesome tool.

In addition to the featured presentations, there was some good stuff at the tabletop demo section. Included was present.ly, a twitter-style communication platform that we use a lot here at BostInnovation. Check out the full list of who was there:

Tabletop Demos:

www.blank-label.com

• Custom dress shirts.

www.kangogift.com

• SMS based gift sending.

www.dympol.com

• Music purchase discounting for target consumers.

www.kartme.com

• Web link organization/ sharing.

www.present.ly

• Twitter-style collaboration tool for businesses.

www.thesponty.com

• Also like Twitter, for casual social event discovery.

All in all, it was another successful gathering of the Boston tech community. Comments? Let us know what you think, or share thoughts on the event below.