Last week, there was a considerable amount of media attention regarding the announcement of our investment in Missoula, MT-based Goomzee. The company has developed a very elegant and innovative mobile marketing platform that helps real estate professionals connect with potential buyers. The platform has applications beyond the real estate market, including retail and auto. Even Guy Kawasaki is so impressed with Goomzee’s technology that he uses it in all of his presentations!
Mike Sparr, founder of Goomzee, is an incredibly energetic and extremely bright young man we’ve gotten to know well over the last few years and provides an excellent lesson for other entrepreneurs. He’s been pitching us to invest since we first met him. We were always impressed with Mike and his vision, but given the fact that this was Mike’s first startup, our partnership wanted to see some continued product development and customer traction before we committed. Mike never took our wait-and-see approach the wrong way and did a terrific job of keeping us informed of the company’s progress. We asked him to over-communicate with us and he took advantage of that offer. While still an early-stage company, we believe that Goomzee is becoming recognized as the leader in text-messaging technology for the real estate industry and we’re excited to announce that we’ve led their $1.5M Series A round of financing.
The lesson for first-time entrepreneurs is about raising capital for the first time. Building a successful company is one of the hardest things to do in the world and usually (but not always) easier when you’ve been through a start-up or two. It doesn’t matter whether you were the CEO or founder but having gone through the experience of working in a senior position at a startup gives you valuable insight that only experience can give you, it can’t be taught in a class or distilled in a cubicle at a big company.
Remember that when you’re a first time entrepreneur, the bar is higher to gain confidence from investors. It doesn’t matter if it’s a venture capital firm, you’re local angel organization, or a bank for that matter. Note that I didn’t say impossible. We’ve backed first-time entrepreneurs and we’ll do it again and again. Those founders had assembled what we believed to be a strong team and support system around them, a killer business model and a sober perspective of the challenges ahead.
Turning back to our investment in Goomzee, this also represents our first investment in a Montana-based company and believe that their success will continue to validate our thesis that the Rocky Mountain region is emerging as the best place to start a business in the country. We look forward to working with Mike and his team as he builds a world class company.
nice post. congrats to Goomzee
Thanks Toby for the congrats and comments. Glenn
“Those founders had assembled what we believed to be a strong team and support system around them, a killer business model and a sober perspective of the challenges ahead."
I liked Glen's post because of the sentence above. At the end of the day, an entrepreneur gets seduced by the idea. One has to fall in love with your IP, why else would you take the risk and go through the pain. But the lesson learned is that one has to take that passion for the idea and build around it.
An idea is simply an idea. IP is simply IP.. Building a business isn't just about the product or IP, it’s about building and harnessing a team to take the passion and form it into a functional company with a sound business model. Money from a VC isn't the answer, it is a tool. I myself have fallen prey to the idea that if I raise the money, it will just all happen. Instead of building a business, I focused on raising money. In the end, that business wasn’t successful. I learned a lot, but lost money.
There is false hope in the idea that VC money is the answer. It is a tool, but not an answer. In today’s world of the Lean Startup, there never has been a better time to be entrepreneurial. Glen's articulates explicitly what an entrepreneur needs to put forth to make a successful business, regardless if it intends to seek 3rd party money.
If you’re an entrepreneur or aspire to be one and don’t know of these events, you should: http://sllconf-boise.eventbrite.com/
And also this one:
http://www.highway12ventures.com/2010/04/07/techs…
Jonathon Fishman
[email protected]
Jonathon, many thanks for your views and thoughts on the post. Your reference to Lean Startup is well received as Mike and Goomzee have certainly prescribed to the theory and methodology has they have built their business. Glenn