Friday, February 15, 2008

Linda Marroquin of FrogPad Solves the Keyboard Problem for Mobile Devices

Linda Marroquin talks about the alternative keyboard market for mobile devices, bootstrapping the company and her plans for growing the company in the future.

What is FrogPad?

It’s a one handed keyboard that’s very easy to learn. It’s a breakthrough in technology that you can learn in only seconds. We’ve been manufacturing and selling the product for over four years. We’ve been self funded by yours truly. We have a USB version and a Bluetooth version both in left and right handed models. Probably 50% of my buyers are Mac users. 40% are mobile innovators interfacing to tablets or mobile phones and 10% are for those with assistive technology—stroke patients, Amputees. Of all the alternative keyboards available, no one has sold as many units as we have.

How many have you sold?

10,000 units.

Where did the idea come from?

The inventor was a Japanese man who was trying to translate text. He would hold the text in one hand and would try and type with the other hand. He found that was hard to do and so he invented the FrogPad concept to help with one-handed keystroke translation.

What will make this product take off?

In the last year and a half, I’ve been waiting for the launch of a particular technology – the multi-touch screen which Apple launched on the iPhone. The second thing I’m waiting for is the market for wearable computing. This year the government will buy 1.4M units for the military so the market is here. I’m getting orders from companies supplying government applications and orders. The military is buying 1.4 million wearable computers this year according to IDG. You can get to 40 words per minute in about 3 weeks of practice. It’s easy and fast to learn. I’m not going to replace the computer keyboard, but rather be considered for use with the mobile device. 19 billion mobile devices will be manufactured in the next 4 years. This is a niche product, yet the niche is huge.
So how will you take advantage of this?

Immediately, I want to develop two new products. First, on your iPhone now you have a keyboard and when you go into keyboard mode it takes you into single touch mode. We can leverage the multi-touch screen for our use. The multi-touch screen allows us to develop a downloadable version of the FrogPad called SoftFrog that would let us leverage the keys like the ones you have on the iPhone on a multi touch display. We could develop a “FrogPad lite” version. The second is to develop a newer version of my Bluetooth unit. I want to develop a sleeker looking FrogPad that’s more iPhone looking and could be wearable.

I always want to hold onto the shirt tails of Apple because they have a go-to-market strategy with Apple to get into their stores. This next month Apple will release the SDK for the iPhone. It’ll take us 6 months to develop SoftFrog. Also, I want to put it on the Apple Dashboard. I also want to put it on the Apple tablet. A tablet is a one handed device because you hold it with one hand and then type with the other. My one-handed keyboard will work with a wide range of products including computers and mobile devices. It enables portability. Paul Allen is developing the Flip Start. It’s a full PC that’s miniaturized.

What is your business model for the new products?

For the downloadable version it will be licensing. Automotive GPS and home automation/entertainment are key markets. Along with gaming and all mobile phone applications. Also the keyboard can be licensed to Volkswagen, Sony, etc.

Have you talked with the people at Motion computing?

I haven’t. I’ve used the last four years to prove the model. People are buying it. It’s a solid product. We don’t have product that comes back. Now I’m starting to look for money. You know as well as I do, that business development is an expensive endeavor. Each product will cost about $250K each.

What is your current staffing level?

Just me. I outsource everything.

Who do you need to hire to fill out the team?

I’ve already identified them. Some of them are on my advisory team. I need a CTO to help develop the new products. My best skills are in sales so I could use someone for the CEO/COO position. We need someone committed to the military market, another focused on Apple, and the last is for K-12 and assistive technology– for those who are disabled. Right now we have over 10,000 soldiers coming back from Iraq who have lost an arm.

What other markets could you pursue?

I’m also interested in pursuing the gaming industry. It can integrate now with the XBOX and Playstation 3. I need to get the word on it. I could use funding to get the word out on that.

Best regards,
Hall T.

Wednesday, February 13, 2008

Ross Kennedy of Seatsub Solves the Seasons Ticket Holders Problem

Ross Kennedy of Seatsub talks about the idea behind his new startup; how to get honest feedback on your website; and why offshore software development is not a great idea for every startup.

How did you come up with the idea behind Seatsub?

Like our CEO, Scott Tachiki, I was a season ticketholder a sports team. While having a beer with a management personnel from one of the teams I joked to him I was one of his best customers because I kept renewing my season tickets but I rarely used them. I was shocked when he replied that I was one of his worst season ticket holders. “Wait” I responded “I renew my season ticket plan at the first of every year, pay in cash well before the season starts, and don’t show up. How do you get better than that?” He said, that’s the problem – you never show up. Teams make money off the parking and the concessions which include things like merchandise sales and food and beverage.

So why didn’t I go to the games? The real problem is finding someone to go to the games I can’t make. Look at the pain you have to go through. You have to make phone calls and send emails to find someone to take over the tickets if you can’t go. Rarely does anyone ever get back to you right away because they have to check with their families before accepting and you can’t have a short phone call with your friends and family, even if you know in the first 30 seconds of the call that they don’t want your seats. After you’ve done that a few times, and gone through that process you just stop trying. In a season there are 72 games not counting the post-season playoffs that you have to fill.

So I set about trying to solve those challenges and remove the barriers that people face. There are social networks that help people get connected, but they don’t solve a real problem or create a tangible value. I wanted to create value for the consumer. And there are literally hundreds of ticketing companies, but no one is focusing on actually driving attendance.

So how do you add value to the consumer?

We save the consumer time and allow them to reconnect. If you’ve ever owned season tickets then you know what it’s like to look at a drawer full of unused tickets at the end of a year. We also found that in many cases up to 90% of season tickets are owned by companies. The tickets are bought with the intention of giving the tickets to clients, employees, and others. So at the end of the year, if the tickets aren’t used someone gets in trouble for not having found enough people.

How much is a fan in the seat worth to the team – buying concessions, etc?

It varies but on average for AAA baseball it’s $10 to $12 per ticket holder. That’s not including advertising but only parking and concession sales. For first time goers they’ll probably buy souvenirs pushing their value up by substantially more.

For the teams this makes incredible sense. We’re driving people that would otherwise have not attended. We’re also giving them market data that helps them drive their future season ticket sales and figure out more closely what their fans actually want and how they behave.

Our CFO, Franco Cirelli, formerly of the NBA, reaffirmed this approach to value creation by recounting efforts to improve the sports fan (i.e. consumer) experience.

What are the alternatives?

The top three are Stubhub, Craigslist, and eBay. Ticketmaster is trying to enter that market. They just acquired TicketsNow. But they focus on major league venues.

Is the system up and running now?

Yes. I’d be happy to give you a demo.

Is the website up?

Yes. But have you ever done something that you later found you weren’t good at? Well, writing the content for the website is like that for me. We’re remessaging it now. If you ever want truly honest feedback ask your brother. Mine wrote seven pages of feedback and it was only a seven page website.

How much does it cost to use?

It’s free to the consumer/fan and it costs nothing to setup for the team. We only take a share of the profit for customers that show up to the games. With minor league teams the fans in the stands are much more important than the major leagues, because their revenue comes primarily from the fans. The majors get ad money from TV viewers.

Do ever see this growing into a full-blown community with discussion boards, a store, etc?

We’re still learning. I heard from a customer the other day that when they go to the game they like to buy their concessions ahead of time. We could take orders over the web and have it delivered to them in the stands. The community side of the house already has a number of systems out there – Facebook, MySpace, and more, but do we want to play in that space?

Ever thought about other venues such as symphonies?

Yes. For example, do you know what the announced attendance at the University of Utah Womens Gymnastics is? On average 12,000. There’s many other venues we could pursue. Also, think about a golf course. Tee times could be organized and monetized this way.

How much have you raised so far in funding?

That’s not a public number right now.

You don’t use offshore software developers? Why?

I’ve gone off shore two or three times and had bad experiences. Besides, with the tight timeframes we are working on, I need immediate communication with the team. If we have it overseas it takes 12 hours or more to get a change done.

The other challenge is that should we ever go down the acquisition route, our buyer will likely have requirements around the quality of code. I was privy to an acquisition in the past where they went through the code line by line. And of course there is always the worry around intellectual property protections.

Best regards,
Hall T.

Monday, February 11, 2008

David Rose of New York Angels Talks about Starting Up, Membership and Angelsoft

I’m always interested in how other groups manage their angel networks. One of the premier groups in the USA is the New York Angels led by David Rose. Based on The Frank Peters Show podcast interviewing David Rose, the founder of the New York Angels. I learned the following things:

They have 75 members including both individual and corporate members. They have more applicants than places available so they have a waiting list. Corporate members or VCs constitute about 10% of their membership. They limit membership because there are only a certain number of people one can relate to. At a certain point, the group gets so large the group loses the ability to know each other.

They are a member managed group. Each member writes their own check for each deal. It’s not a fund. As a condition of membership, each member must pay a membership fee and also must invest $100K per year. Also, members must attend at least a majority of the meetings. Also, members must participate in screening and deal follow up sessions. They have 5 to 10 people churn each year.

They get 400 plans a year to review. They charge $150 per application primarily as a screening mechanism. They invest about $9M to $10M a year based on their own investments and those of follow on VC investments. They originally had a trade organization called New York New Media association which later morphed into the current New York Angels network in 2004. They are just now starting to see exits in their deals which normally take 5 to 7 years. Their first positive exit last year was Sign Story which sold to CBS for $71M.

David Rose was the driving force behind Angelsoft a software tool used to manage angel groups and their dealflow. He came up with the idea when he started the group and found there were no tools out there on the market to help manage the group. At that time some groups had developed their own internal custom software. Some used Yahoo groups to coordinate the effort while others just used email. David ran focus groups to identify the needs of angel groups and found a common thread among them. He used the initial beta version of the software they developed to support their own angel network and later offered it to other groups. The revenue model focuses on advertising and sponsorship. The software facilitates the syndication of deals by letting one group forward all the deal documents to another group for potential additional investment.

Angelsoft is currently used by over 250 angel groups which is about 30% of all angel groups worldwide. Because it’s the standard software tool used by angel groups they can aggregate information about the startup industry although they don’t have access to individual plans or information. They receive about 1000 plans per month in the system worldwide and they see 10 to 15 new angel groups join each month. Most angel investing is in the US with a growing interest in Europe.

Future plans for Angelsoft include adding background checks on submitted applications, escrowing services for the funding process, and sharing domain expertise from one group to the next. They also plan to add video conferencing and video feed capability later this year. It’s becoming a platform for social networking among angels.

Best regards,
Hall T.