Julie Gomoll of LaunchPad Coworking Talks about the Shared Office Space Trend and Her New Startup
What is LaunchPad Coworking and how is it different from conjunctured workspace?
LaunchPad is very much a for profit business while conjunctured workspace is a shared workspace that is not necessarily a business. They are trying to get enough people to pay the rent and provide space to their members. We’re doing very high end desk space for rent in an open floor plan. We have 30 individual workspaces, 6 meeting rooms, and a built-in café that’s open to the public.
How much will it cost for someone to use the facilities?
It will cost $12 to $15/hour for an individual space and $30 to$90/hour for a meeting room.
Do you have any members signed up so far?
Conjunctured workspaces sign up members while we’re offering it on an hourly basis. Having said that I do have a number of people verbally committing to use the space. We’re building a reservation system to support it.
When do you plan to open and where will it be?
We plan to open in October and it’s located at 8th and Brazos.
Why downtown?
It’s the heart of our demographic. I think Austin can support a lot of these. It’s the future of how we’re going to work. The population downtown is growing due to the high rises going up. We’re within walking distances of 13 hotels. Our primary target is the independent worker in Austin. Our secondary target is out of town companies that come here for recruiting, interviewing students, and those who come to the convention center.
What else are you offering besides space?
We’re fortunate to already have fiber in the building. We can offer a gigabyte connection to our users. Someone with incredible foresight in the 1970s put fiber all over town. It was already there.
How did you get involved with this?
In my 20s I wanted to open a bar where interesting people came and had smart conversations. I later found out that smart people do not hang out in bars all day and that interesting conversations rarely happen there at 2pm. I’ve been an entrepreneur my whole career and in these last eight years I’ve been working in coffee shops and it’s so not working. They’re crowded. The idea started as a coffee shop that was conducive to working with outlets and workspaces and it grew into working space with a coffee shop inside it.
Coworking is growing trend?
You see it growing around the world. I like what they are doing with conjunctured workspace. I like the spirit of what they are doing. Our values are similar but I want a nice place to work with a professional appearance. For people traveling and coming to town, they can bring clients and get the services they need.
What about other services?
We’ll offer videoconferencing., and our café will serve healthy local food, specialty coffee drinks, and beer & wine.
Best regards,
Hall T.
Wednesday, September 10, 2008
Monday, September 8, 2008
Raymond McGlamery of DARE talks about Improving Guitar Acoustics
What does DARE do?
DARE Music Group is a musical instrument company, specifically electric and acoustic guitars and basses and after market products. We have an acoustics physicist and instrument maker in Wichita, Kansas who has patents on nose cones for jet planes and many other applications related to the acoustic properties of air . He came up with some designs for acoustics that could be built into guitars or added onto them. So it’s both an aftermarket product and a production product. Ten million acoustic guitars are sold every year and we can make each of them sound better.
What does it do?
We call it an O-Port and it increases the energy inside the guitar and gives you better resonation and better tone. It works the interior of the guitar harder so when the sound waves come out they have more focused energy and tone to it. It also happens to kill feedback. You no longer need your feedback buster which is a plastic piece which kills some of the acoustics and changes the sound of your guitar. Our device has the energy coming out so strong that you can turn the gain down half way which is what causes the feedback.
What is the go-to-market strategy?
One of our partners was starting a guitar company with a roster of musicians behind it including some of the best known players in the music business. We can get our guitars on stage in their tours. We will be establishing distribution channels through Best Buy, Guitar Center, and more. We have contacts at the Hard Rock Café which will help us on the roll out.
What is the price point?
It’ll retail for around $25 which some consider to be low. It can upgrade any acoustic guitar and make it sound better. We have other patented products that will work in conjunction with our first device.
How about the patents?
We have worldwide patents on it including the phase-plug with more on the drawing board.
What about manufacturing?
We’ve tested the prototype and have the manufacturing for the add-on will be in the US and our guitar lines will be made in Romania and Asia. The Eastern Bloc countries do quality work but their prices are starting to go up because it’s the hot new spot. We also plan to differentiate ourselves by adding an attractive design on the product. We have a team of high profile artists wanting to design graphics for our instrument lines.
Best regards,
Hall T.
DARE Music Group is a musical instrument company, specifically electric and acoustic guitars and basses and after market products. We have an acoustics physicist and instrument maker in Wichita, Kansas who has patents on nose cones for jet planes and many other applications related to the acoustic properties of air . He came up with some designs for acoustics that could be built into guitars or added onto them. So it’s both an aftermarket product and a production product. Ten million acoustic guitars are sold every year and we can make each of them sound better.
What does it do?
We call it an O-Port and it increases the energy inside the guitar and gives you better resonation and better tone. It works the interior of the guitar harder so when the sound waves come out they have more focused energy and tone to it. It also happens to kill feedback. You no longer need your feedback buster which is a plastic piece which kills some of the acoustics and changes the sound of your guitar. Our device has the energy coming out so strong that you can turn the gain down half way which is what causes the feedback.
What is the go-to-market strategy?
One of our partners was starting a guitar company with a roster of musicians behind it including some of the best known players in the music business. We can get our guitars on stage in their tours. We will be establishing distribution channels through Best Buy, Guitar Center, and more. We have contacts at the Hard Rock Café which will help us on the roll out.
What is the price point?
It’ll retail for around $25 which some consider to be low. It can upgrade any acoustic guitar and make it sound better. We have other patented products that will work in conjunction with our first device.
How about the patents?
We have worldwide patents on it including the phase-plug with more on the drawing board.
What about manufacturing?
We’ve tested the prototype and have the manufacturing for the add-on will be in the US and our guitar lines will be made in Romania and Asia. The Eastern Bloc countries do quality work but their prices are starting to go up because it’s the hot new spot. We also plan to differentiate ourselves by adding an attractive design on the product. We have a team of high profile artists wanting to design graphics for our instrument lines.
Best regards,
Hall T.
Wednesday, September 3, 2008
Scott Bils of Conformity talks about the SAAS Market
Scott Bils of Conformity talks about the SAAS market, the growth, the challenges, and the hot areas.
Why do you call your new company ‘Conformity?’
We work with SAAS applications and focus on providing companies conformity across their usage of those applications. Typically, users have no common oversight over their SAAS applications so that’s what we provide. It’s conformed usage of the application.
What’s a typical scenario in which your product works?
A typical user has a number of SAAS applications – say Salesforce.com for CRM and Google applications for a number of functions, and NetSuite for ERP. Today, you have to setup credentials for each package separately and then track usage, access rights, etc, separately. It’s usually distributed across the organization. We enable control and usage tracking in a central platform for better management of resources.
How is the SAAS market doing?
We see SAAS adoption by companies, particularly enterprises, accelerating in the coming years. Today, a typical midmarket company has around three SAAS applications and they are being managed by silo. We’re finding enough SAAS applications out there now that you can get what you want to build out your company. ERP has some gaps but for most applications there’s a SAAS application out there.
What are the challenges in using SAAS applications?
Companies find they need to centralize access to those applications since they need to know who has access to what. Customers also want to track usage of the applications. There also needs compliance management as well.
What is your beachhead market for this?
We’re going after the mid-range 250 to 1000 employee company in verticals that have been aggressive early adopters of SAAS, including technology, financial services and business servicest. Wherever Salesforce is deployed tends to be a target customer for us.
Do you have any customers yet? Any market validation?
We have several that are Beta testing the product now, and have built an early pipeline of prospects that have indicated strong interest in our solution
Why do they choose SAAS?
The overall cost is lower and the operational model is easier to implement and maintain. Business users love it because they don’t have to get IT involved. It’s a double-edged sword. If you’re a user you like the ability to get up and running quickly, but if you take the IT view, you want some control for compliance and security issues.
Within the SAAS arena what applications are hot?
HR usage is hot right now. Talent and performance management are big.
Do you sell to legal or healthcare companies since they have regulatory control?
Eventually, it will be sold there but not much yet. But that’s the problem we’re solving. For a company that wants the benefits of SAAS but needs some control we can help them. Someone trying to achieve Sarbanes-Oxley compatibility is a key target for us.
How do you price your software?
It’s not based on number of applications but by employee user per month.
Best regards,
Hall T.
Why do you call your new company ‘Conformity?’
We work with SAAS applications and focus on providing companies conformity across their usage of those applications. Typically, users have no common oversight over their SAAS applications so that’s what we provide. It’s conformed usage of the application.
What’s a typical scenario in which your product works?
A typical user has a number of SAAS applications – say Salesforce.com for CRM and Google applications for a number of functions, and NetSuite for ERP. Today, you have to setup credentials for each package separately and then track usage, access rights, etc, separately. It’s usually distributed across the organization. We enable control and usage tracking in a central platform for better management of resources.
How is the SAAS market doing?
We see SAAS adoption by companies, particularly enterprises, accelerating in the coming years. Today, a typical midmarket company has around three SAAS applications and they are being managed by silo. We’re finding enough SAAS applications out there now that you can get what you want to build out your company. ERP has some gaps but for most applications there’s a SAAS application out there.
What are the challenges in using SAAS applications?
Companies find they need to centralize access to those applications since they need to know who has access to what. Customers also want to track usage of the applications. There also needs compliance management as well.
What is your beachhead market for this?
We’re going after the mid-range 250 to 1000 employee company in verticals that have been aggressive early adopters of SAAS, including technology, financial services and business servicest. Wherever Salesforce is deployed tends to be a target customer for us.
Do you have any customers yet? Any market validation?
We have several that are Beta testing the product now, and have built an early pipeline of prospects that have indicated strong interest in our solution
Why do they choose SAAS?
The overall cost is lower and the operational model is easier to implement and maintain. Business users love it because they don’t have to get IT involved. It’s a double-edged sword. If you’re a user you like the ability to get up and running quickly, but if you take the IT view, you want some control for compliance and security issues.
Within the SAAS arena what applications are hot?
HR usage is hot right now. Talent and performance management are big.
Do you sell to legal or healthcare companies since they have regulatory control?
Eventually, it will be sold there but not much yet. But that’s the problem we’re solving. For a company that wants the benefits of SAAS but needs some control we can help them. Someone trying to achieve Sarbanes-Oxley compatibility is a key target for us.
How do you price your software?
It’s not based on number of applications but by employee user per month.
Best regards,
Hall T.
Wednesday, August 27, 2008
Andy O’Neil and Gavino Morin of Bluepoint talk about the Gaming Industry and their Game Engine Development System
You guys have built a game engine, is that right?
Yes, we built the Bluepoint Engine which targets next generation consoles.
What is the capital for game engines on average?
Building a game engine from scratch is expensive. A high-end game engine takes tens of programmer-years to build and can cost millions of dollars to develop and test, and you won’t know how well it will work until after you’ve sunk all that time and money into it. This is why so many game developers license the technology from third parties. A lot depends on the platform; it’s easier to build an engine for a well-understood platform like a PC than for a next generation console such as the PS3.
So what market are you going after with your game engine?
Our engine is targeted towards high-end console developers. We built the Bluepoint Engine with two overriding design principles in mind. First, we designed it to produce high-performance games. This means that developers can use the Bluepoint Engine to develop games with better graphics, more features and more interesting game play.
Our second design principle was to develop a product that significantly accelerates game development. Our team has decades of combined experience developing game engines, so we have some pretty clear insight as to how to accomplish this. One way our game engine accelerates development is by allowing designers the ability to perform tasks normally only assigned to programmers. So, for example, changing game mechanics generally requires programmer time (which in some cases can mean days of extra work). But developers who use the Bluepoint Engine can tweak game mechanics with a few mouse clicks. When you consider just how much tweaking goes on when you’re building a game, you start to appreciate the benefit of our approach. Now, you’ll never eliminate the need for programmers, but there are a lot of tasks currently performed by programmers that can be done faster and cheaper by designers. Another example of how our game engine helps speed-up development is by giving artists tools they need, like an interactive shader editor. This allows artists to create assets faster and cheaper.
What tools do the artists have, is it like a Photoshop type of tool or a graphics tool…?
Most game studios use one of the Autodesk products. Our engine is tightly integrated with Autodesk Maya, which is a product familiar to most artists.
What’s the status of your engine, when do you think you might release your final version?
We have a beta version right now that is substantially complete, it’s been tested and three products have been built and shipped using this version of the engine. In fact the first downloadable game available in the U.S. for the PS3 was built entirely with the Bluepoint Engine.
We have several licensees who are building some very interesting game prototypes with our engine. To give you an idea of how flexible the Bluepoint Engine is, it’s been used to develop various game prototypes including a third person action/adventure game, a side scrolling 2½d shooter game, a racing game and a rhythm action platform game.
Right now the engine can be used to create games for the PS3 and the PC. We’re planning on having Xbox 360 and Wii versions by the end of the fourth quarter of ’08. Our first fully commercial version will be ready sometime in the first quarter of ’09.
Best regards,
Hall T.
Yes, we built the Bluepoint Engine which targets next generation consoles.
What is the capital for game engines on average?
Building a game engine from scratch is expensive. A high-end game engine takes tens of programmer-years to build and can cost millions of dollars to develop and test, and you won’t know how well it will work until after you’ve sunk all that time and money into it. This is why so many game developers license the technology from third parties. A lot depends on the platform; it’s easier to build an engine for a well-understood platform like a PC than for a next generation console such as the PS3.
So what market are you going after with your game engine?
Our engine is targeted towards high-end console developers. We built the Bluepoint Engine with two overriding design principles in mind. First, we designed it to produce high-performance games. This means that developers can use the Bluepoint Engine to develop games with better graphics, more features and more interesting game play.
Our second design principle was to develop a product that significantly accelerates game development. Our team has decades of combined experience developing game engines, so we have some pretty clear insight as to how to accomplish this. One way our game engine accelerates development is by allowing designers the ability to perform tasks normally only assigned to programmers. So, for example, changing game mechanics generally requires programmer time (which in some cases can mean days of extra work). But developers who use the Bluepoint Engine can tweak game mechanics with a few mouse clicks. When you consider just how much tweaking goes on when you’re building a game, you start to appreciate the benefit of our approach. Now, you’ll never eliminate the need for programmers, but there are a lot of tasks currently performed by programmers that can be done faster and cheaper by designers. Another example of how our game engine helps speed-up development is by giving artists tools they need, like an interactive shader editor. This allows artists to create assets faster and cheaper.
What tools do the artists have, is it like a Photoshop type of tool or a graphics tool…?
Most game studios use one of the Autodesk products. Our engine is tightly integrated with Autodesk Maya, which is a product familiar to most artists.
What’s the status of your engine, when do you think you might release your final version?
We have a beta version right now that is substantially complete, it’s been tested and three products have been built and shipped using this version of the engine. In fact the first downloadable game available in the U.S. for the PS3 was built entirely with the Bluepoint Engine.
We have several licensees who are building some very interesting game prototypes with our engine. To give you an idea of how flexible the Bluepoint Engine is, it’s been used to develop various game prototypes including a third person action/adventure game, a side scrolling 2½d shooter game, a racing game and a rhythm action platform game.
Right now the engine can be used to create games for the PS3 and the PC. We’re planning on having Xbox 360 and Wii versions by the end of the fourth quarter of ’08. Our first fully commercial version will be ready sometime in the first quarter of ’09.
Best regards,
Hall T.
Monday, August 25, 2008
Welcome Back – Upcoming Events for Angel Investors for Fall 2008
Now that summer is nearing its end and people are making their way back to Austin, I would like to highlight a few upcoming events for the angel investor and entrepreneur. Listed chronologically, we have the following:
TIE Austin Funding Event – September 9th which highlights funding for startup companies in the expansion phase.
ATI Wireless Funding Forum -- October 14 which showcases wireless companies seeking funding.
Open4Business Conference – November 11th provides entrepreneur education for those starting up new businesses.
SxSW—“So You Want to be an Angel” session will run at SxSW Interactive in the spring, but please vote for this event here.
There are a number of conferences outside Austin you may want to take note of below.
Inc 5000 Conference
September 18-20, 2008
Washington, DC
Inc Magazine assembles the best of America's business leaders, experts, and entrepreneurs for three days of learning, networking, and celebrating with a community of peers. ACA members and friends may receive a $495 discount off of the non-member price (for a total fee of $1,400). Information and registration is available at www.inc500conference.com.
AdvaMed 2008
September 21-24, 2008
Washington, DC
This conference is the premier medical technology event for partnering, business development, and collaboration opportunities, with strong education programs on a variety of life science issues. Conference details and registration is at www.advamed2008.com.
9th Annual Early Stage Venture Conference
October 22, 2008
San Francisco, CA
Given current economic times, this conference is important to help early-stage investors identify strategies to support viable companies and getting companies to next funding rounds and exits. A panel on the Growing Importance of Angel Investors is on the agenda. More information is available here.
Best regards,
Hall T.
TIE Austin Funding Event – September 9th which highlights funding for startup companies in the expansion phase.
ATI Wireless Funding Forum -- October 14 which showcases wireless companies seeking funding.
Open4Business Conference – November 11th provides entrepreneur education for those starting up new businesses.
SxSW—“So You Want to be an Angel” session will run at SxSW Interactive in the spring, but please vote for this event here.
There are a number of conferences outside Austin you may want to take note of below.
Inc 5000 Conference
September 18-20, 2008
Washington, DC
Inc Magazine assembles the best of America's business leaders, experts, and entrepreneurs for three days of learning, networking, and celebrating with a community of peers. ACA members and friends may receive a $495 discount off of the non-member price (for a total fee of $1,400). Information and registration is available at www.inc500conference.com.
AdvaMed 2008
September 21-24, 2008
Washington, DC
This conference is the premier medical technology event for partnering, business development, and collaboration opportunities, with strong education programs on a variety of life science issues. Conference details and registration is at www.advamed2008.com.
9th Annual Early Stage Venture Conference
October 22, 2008
San Francisco, CA
Given current economic times, this conference is important to help early-stage investors identify strategies to support viable companies and getting companies to next funding rounds and exits. A panel on the Growing Importance of Angel Investors is on the agenda. More information is available here.
Best regards,
Hall T.
Wednesday, August 20, 2008
Chris McKinzie of Fluid Innovation Talks about Managing Intangibles
Chris McKinzie of Fluid Innovation Innovation talks about Managing Intangibles such as IP, the challenge universities face in promoting their IP, and the first Open Innovation Industry Forum
What does Fluid Innovation do?
It’s about open innovation. Today’s economy is driven by intangibles such as patents, brands, systems, etc. For instance, Boeing’s value is not its airplanes, but its systems to design planes and its supply chain process for bringing it all together. No longer is its value on the balance sheet. Companies want to do a better job at managing those intangibles. So how does one capture, organize, and manage the value of such technology? We have a software system that does that, the Fluid Licensing System (FLS)
Do you have an example of it in action?
We are working with a major F100 firm on what’s called the IPZone. It’s a concept for transacting and collaborating on innovation and commercialization. We need a collaborate environment for doing that. It’s based in upper Manhattan, near Colombia. It’s part of an economic revitalization effort. We’ve taken our FLS solution and applied it as the collaborative platform for this project.
It sounds like technology transfer at the university level. Is it the same?
The university market is tough. We worked with Texas A&M, Columbia, and other universities. We want to do more than just build software. We want to foster commercialization, but to do that in the University segment we would have to assume more risk and actually license the IP and then turn around and relicense it. There’s a company called UTEK that does that. They go to the government labs and universities and license the technology and then resell it.
We’re trying to create a market for these technologies which requires us to bring the buyers into the equation. It takes more than just creating a website.
How do you approach this?
First you have to identify the buyers. If you initially focus on one type of technology such as software there’s an identifiable and manageable list of target companies. We found they want us to aggregate the opportunities and present them together in one format. We also found that the universities and companies whether it be UT, Texas A&M, American Express or whoever, all describe their technologies differently and when they do it’s a very technical description, this is very confusing for potential commercialization partners.
What’s your next step?
On September 8, 2008, we’re holding an Open Innovation Industry Forum in Chicago which includes Lockheed, GE, Microsoft, and American Express. We plan to sit down and discuss how we can improve the transaction process and asset merchandising – standardization on how to describe these technologies. Technology commercialization happens all the time but it’s not efficient and there is no central aggregation of the deal news.
How do people find out about Open Innovation and the resulting commercialization deals?
Part of what we’re planning to do with the IPZone is to begin publishing aggregated deal news about transactions on one of our domains, IPWire.
What other intangible assets are there?
Of course patents but there is also Trade Secrets, Know-how, Copyrights and Trademarks, for example, brand names such as those licensed by Major League Baseball is a big business. We’re actually evaluating the possibility of expanding our Fluid Licensing System offering to include capabilities for tracking royalty obligations.
Best regards,
Hall T.
What does Fluid Innovation do?
It’s about open innovation. Today’s economy is driven by intangibles such as patents, brands, systems, etc. For instance, Boeing’s value is not its airplanes, but its systems to design planes and its supply chain process for bringing it all together. No longer is its value on the balance sheet. Companies want to do a better job at managing those intangibles. So how does one capture, organize, and manage the value of such technology? We have a software system that does that, the Fluid Licensing System (FLS)
Do you have an example of it in action?
We are working with a major F100 firm on what’s called the IPZone. It’s a concept for transacting and collaborating on innovation and commercialization. We need a collaborate environment for doing that. It’s based in upper Manhattan, near Colombia. It’s part of an economic revitalization effort. We’ve taken our FLS solution and applied it as the collaborative platform for this project.
It sounds like technology transfer at the university level. Is it the same?
The university market is tough. We worked with Texas A&M, Columbia, and other universities. We want to do more than just build software. We want to foster commercialization, but to do that in the University segment we would have to assume more risk and actually license the IP and then turn around and relicense it. There’s a company called UTEK that does that. They go to the government labs and universities and license the technology and then resell it.
We’re trying to create a market for these technologies which requires us to bring the buyers into the equation. It takes more than just creating a website.
How do you approach this?
First you have to identify the buyers. If you initially focus on one type of technology such as software there’s an identifiable and manageable list of target companies. We found they want us to aggregate the opportunities and present them together in one format. We also found that the universities and companies whether it be UT, Texas A&M, American Express or whoever, all describe their technologies differently and when they do it’s a very technical description, this is very confusing for potential commercialization partners.
What’s your next step?
On September 8, 2008, we’re holding an Open Innovation Industry Forum in Chicago which includes Lockheed, GE, Microsoft, and American Express. We plan to sit down and discuss how we can improve the transaction process and asset merchandising – standardization on how to describe these technologies. Technology commercialization happens all the time but it’s not efficient and there is no central aggregation of the deal news.
How do people find out about Open Innovation and the resulting commercialization deals?
Part of what we’re planning to do with the IPZone is to begin publishing aggregated deal news about transactions on one of our domains, IPWire.
What other intangible assets are there?
Of course patents but there is also Trade Secrets, Know-how, Copyrights and Trademarks, for example, brand names such as those licensed by Major League Baseball is a big business. We’re actually evaluating the possibility of expanding our Fluid Licensing System offering to include capabilities for tracking royalty obligations.
Best regards,
Hall T.
Monday, August 18, 2008
Jeremy Bencken of Apartment Ratings talks about Search Engine Optimization (SEO)
Jeremey Bencken of ApartmentRatings.com talks about Search Engine Optimization (SEO)
What do you see as a need in the local startup business?
I think we need more focus on SEO and PR early. I often see business plans with a line item for SEO and PR, assuming these things start after the product is launched. But from experience, when you start doing it, it’s turns out to be a lot more complex than you thought. You can outsource it but it’s expensive and it takes a long time to yield results. There are things you can do as an entrepreneur to lay the groundwork for initiatives to work more effectively.
What are some examples?
The way you design your website or start participating with relevant blogs early and build a reputation. And you can start monitoring the news and build a media list well ahead of your launch. The worst way is to wait till the product is ready to launch and then start working on building blogger interest.
Obviously time devoted to SEO and PR takes time from other product features, but it’s one of only a few things you can do where the cost is low, the return is huge, and the longer you take to start, the longer it takes to start working and the more it will cost when you do.
What is an example?
When we initially launched Apartment Ratings, we had a URL structure that was very long and search-engine unfriendly (our URL’s gave the appearance that we had a 25-level deep directory structure). And fixing it required significant work. I’ve seen a lot of new web-based companies make this mistake. Developers who aren’t aware of SEO implications sidestep the extra work required to make keyword-rich URLs that are grouped into meaningful directories, maintain consistent internal links, and maintain a single URL for the same page content. It might take an extra day or two to implement early on, but once you’ve launched, you could devote several months to migrating a site to pretty URLs and you have to keep track of the mapping between the two.
What’s the key factor in online marketing?
Conversion rate is the name of the game. If you can get that number higher, your cost of acquisition goes lower….and your margins are fatter or you can outspend your competitors to win more advertising placements, affiliates, bizdev deals, etc.
What’s your next project?
My next venture, BuzzStream, will launch in Fall 08 and is designed to help companies accelerate their media and SEO relationship-building efforts. I have a blog at PR4Pirates.
Best regards,
Hall T.
What do you see as a need in the local startup business?
I think we need more focus on SEO and PR early. I often see business plans with a line item for SEO and PR, assuming these things start after the product is launched. But from experience, when you start doing it, it’s turns out to be a lot more complex than you thought. You can outsource it but it’s expensive and it takes a long time to yield results. There are things you can do as an entrepreneur to lay the groundwork for initiatives to work more effectively.
What are some examples?
The way you design your website or start participating with relevant blogs early and build a reputation. And you can start monitoring the news and build a media list well ahead of your launch. The worst way is to wait till the product is ready to launch and then start working on building blogger interest.
Obviously time devoted to SEO and PR takes time from other product features, but it’s one of only a few things you can do where the cost is low, the return is huge, and the longer you take to start, the longer it takes to start working and the more it will cost when you do.
What is an example?
When we initially launched Apartment Ratings, we had a URL structure that was very long and search-engine unfriendly (our URL’s gave the appearance that we had a 25-level deep directory structure). And fixing it required significant work. I’ve seen a lot of new web-based companies make this mistake. Developers who aren’t aware of SEO implications sidestep the extra work required to make keyword-rich URLs that are grouped into meaningful directories, maintain consistent internal links, and maintain a single URL for the same page content. It might take an extra day or two to implement early on, but once you’ve launched, you could devote several months to migrating a site to pretty URLs and you have to keep track of the mapping between the two.
What’s the key factor in online marketing?
Conversion rate is the name of the game. If you can get that number higher, your cost of acquisition goes lower….and your margins are fatter or you can outspend your competitors to win more advertising placements, affiliates, bizdev deals, etc.
What’s your next project?
My next venture, BuzzStream, will launch in Fall 08 and is designed to help companies accelerate their media and SEO relationship-building efforts. I have a blog at PR4Pirates.
Best regards,
Hall T.
Wednesday, August 13, 2008
John Metcalf of Startup District talks about creating a community for entrepreneurs in Austin
John Metcalf of Startup District talks about creating a community for entrepreneurs in Austin
What is your background?
I grew up in San Antonio. I was homeschooled. I've been getting in trouble on the Internet since AOL days.
I came to UT in 2002 as an undergrad. I was excited about Austin being a startup city but when I was at UT I didn’t really feel like it was a part of a startup community. About halfway through school I started working with a Silicon Valley company called Radar.net. They were angel funded by Joi Ito and Reid Hoffman and later found funding with MDV & DFJ. When they asked me what I'd be up to after graduation, I told them and everyone else I didn't want a job. I wanted to startup in Austin. I prefer to work for myself.
What is the Startup District?
To bring startups and people with a startup-mentality in proximity -- concentrating us.
While I was in school I kept looking for the tech community I thought was here. I went to all the tech events I could and while there was a community there, it wasn’t the same kind as I found in Silicon Valley. The people I met were talking about different things. I finally found a glimpse of what I was looking for when Dusty Reagan started a Jelly in Austin.
What is a Jelly?
It’s a concept that started a year and a half ago in New York, where some independent folks used a wiki to organize their meet ups in coffee shops so they could work together as a group. It's called a Jelly because they came up with the idea while eating Jelly Beans. The idea is to co-locate entrepreneurs or freelancers so they can work, collaborate, and learn from each other. Austin was one of the first cities to have an extension of that. There’s one that meets every Friday at Café Caffeine on South Congress. At these Jellys, I found a good group of young, progressive entrepreneurs.
So how is the Startup District going?
We've place an anchor.
The group I met at Jelly, Dusty Reagan, David Walker, Cesar Torres, and I realized after a couple weeks of Jellying that this was something special, and we could benefit from this type of environment everyday.
With the community's support, the four of us opened a coworking space called Conjunctured on East 7th.
How much does a membership cost?
There are three levels. The top level is $425/month and gives the member unlimited access. Then there are lower levels at $325 and $125 per month.
The people who join are interested in working around other people.
How did you come up with the name for this?
My friend Dane Hurtubise said “Startup District” first. We were talking about Austin's Warehouse District. Dane said "what Austin needs is a district for startups, not clubs."
Why did you start it?
I felt the type of talent in Austin that would thrive in a startup was leaving town for one of the coasts or going to work for a large company. UT is breeding people to enter into the corporate work force. There needs to be an alternative place for these people to go work.
What is your goal for the Startup District?
To build a community of entrepreneurs who build startup companies and eventually, they could act as an incubator for future startups. In addition, the city could recognize it as an economic zone as an incentive for startups to stay here.
It sounds a little like a YCombinator program. How does the Startup District compare?
I had the opportunity to join Paul Graham and Jessica Livingston at YCombinator in Cambridge last week for dinner.
I think we need to build the community first and then we can start a program similar to YCombinator or TechStars.
Best regards,
Hall T.
What is your background?
I grew up in San Antonio. I was homeschooled. I've been getting in trouble on the Internet since AOL days.
I came to UT in 2002 as an undergrad. I was excited about Austin being a startup city but when I was at UT I didn’t really feel like it was a part of a startup community. About halfway through school I started working with a Silicon Valley company called Radar.net. They were angel funded by Joi Ito and Reid Hoffman and later found funding with MDV & DFJ. When they asked me what I'd be up to after graduation, I told them and everyone else I didn't want a job. I wanted to startup in Austin. I prefer to work for myself.
What is the Startup District?
To bring startups and people with a startup-mentality in proximity -- concentrating us.
While I was in school I kept looking for the tech community I thought was here. I went to all the tech events I could and while there was a community there, it wasn’t the same kind as I found in Silicon Valley. The people I met were talking about different things. I finally found a glimpse of what I was looking for when Dusty Reagan started a Jelly in Austin.
What is a Jelly?
It’s a concept that started a year and a half ago in New York, where some independent folks used a wiki to organize their meet ups in coffee shops so they could work together as a group. It's called a Jelly because they came up with the idea while eating Jelly Beans. The idea is to co-locate entrepreneurs or freelancers so they can work, collaborate, and learn from each other. Austin was one of the first cities to have an extension of that. There’s one that meets every Friday at Café Caffeine on South Congress. At these Jellys, I found a good group of young, progressive entrepreneurs.
So how is the Startup District going?
We've place an anchor.
The group I met at Jelly, Dusty Reagan, David Walker, Cesar Torres, and I realized after a couple weeks of Jellying that this was something special, and we could benefit from this type of environment everyday.
With the community's support, the four of us opened a coworking space called Conjunctured on East 7th.
How much does a membership cost?
There are three levels. The top level is $425/month and gives the member unlimited access. Then there are lower levels at $325 and $125 per month.
The people who join are interested in working around other people.
How did you come up with the name for this?
My friend Dane Hurtubise said “Startup District” first. We were talking about Austin's Warehouse District. Dane said "what Austin needs is a district for startups, not clubs."
Why did you start it?
I felt the type of talent in Austin that would thrive in a startup was leaving town for one of the coasts or going to work for a large company. UT is breeding people to enter into the corporate work force. There needs to be an alternative place for these people to go work.
What is your goal for the Startup District?
To build a community of entrepreneurs who build startup companies and eventually, they could act as an incubator for future startups. In addition, the city could recognize it as an economic zone as an incentive for startups to stay here.
It sounds a little like a YCombinator program. How does the Startup District compare?
I had the opportunity to join Paul Graham and Jessica Livingston at YCombinator in Cambridge last week for dinner.
I think we need to build the community first and then we can start a program similar to YCombinator or TechStars.
Best regards,
Hall T.
Monday, August 11, 2008
Jonas Lamis of Scivestor talks about New Application Areas of Moore’s Law.
Jonas Lamis of SciVestor talks about new application areas of Moore’s Law, the coming of the Semantic Web, and a startup workspace called Tech Ranch Austin.
What is your background?
I come from the enterprise software arena. Back when I started you could put your arms around what is software. Today it’s much more diverse. I helped launch three Austin Ventures backed software companies. The first was called Ventix that was an enterprise software knowledge management play. When Ventix was acquired by Motive, we spun out Question.com that was also acquired, and most recently I spent six years growing Troux Technologies. A year ago I left Troux and started SciVestor to create research into new technology areas that are going to change the world.
I see you have artificial intelligence, nanotechnology, and robotics as target areas for your company which provides research. Why did you pick those areas?
If you look at Moore’s law with exponential growth curves, it applies to those areas just as it did software. We’re at a point now that there’s so much processing power available that the second wave of industries will start to take advantage of it. Robotics is starting to see significant returns in medical applications and more. The power that Moore’s law brought to the software industry will now amplify these other areas. While software changed the way we lived, these other areas have the potential of making an even more dramatic change to the way society operations in the decades ahead.
How did you get into these areas?
Ray Kurzweil’s writings were very influential to me. The book called The Singularity Is Near encouraged me to look at these new technologies. That led me to the Singularity Institute for Artificial Intelligence in the Bay area which is a non-profit where I serve as the Director of Partnerships. The Semantic Web space is very interesting because it will lead to the next generation of artificial intelligence.
What is the Semantic Web space about?
It’s about understanding who I am, my context, and what I want to accomplish and using that information and the Internet to deliver results. It could use my speech, gestures, or whatever I offer to help determine what I want. The Semantic Web space is a precursor to the next generation artificial intelligence effort. As an example, Microsoft recently acquired virtually unheard of Powerset for $100 Million – an emerging semantic technology company. They developed a search engine that would parse through Wikipedia and be able to answer questions like, “Which Presidents died in office?” Semantically it would start to understand what you are talking about and give you answers.
What do you think about nanotechnology?
There are again fundamental underlying technologies that will be powerful in the decades ahead. Moore’s law, that exponential growth, sneaks up on you and you don’t know it’s coming for a while and then it pops up. Nanotechnology is coming but is still below the radar.
What about robotics?
One area I’m interested in is the autonomous vehicle space. It’s come a long way in a short amount of time. In the first DARPA Grand Challenge in 2005 – a competition for demonstrating autonomous vehicles hosted by the Department of Defense, the first competition, the lead vehicle only went 11 miles in the 100 mile race. In the 2006 event, 22 of the teams got further than the lead vehicle from the competition a year and a half before. I recently gave a presentation at the Robobusiness Conference on the topic. It’s a pretty interesting space for me because it’s been a sleepy space for so many years with manufacturing robots and now with the emergence of iRobot--the vacuum cleaner, and the use of robots in the military for autonomous vehicles, and the use of robots in the healthcare space. There’s a good chance that a decade from now most people will have some kind of robot in their house providing value for them.
My wife wants an iRobot. I didn’t think she would go for it.
Our Robot Central blog has done some research on the anthropomorphism of people taking the iRobot and dressing them, taking them with them on vacation, and more. One guy would clean the room first before turning on the iRobot because he didn’t want it to work too hard.
What other trends do you see emerging?
Locally here in Austin, I’ve noticed that there are so many groups forming around different technologies. Meetups if you will. For example, I was at a meeting of Semantic Web that came together through Twitter spontaneously. I find these groups want to socialize and share information. I now see people wanting to share workspaces to collaborate, bounce ideas off each other and have a physical business social network. I have an idea called Tech Ranch Austin that is part co-working space and part technology incubator space. I have companies that want office space but not at A-grade real estate prices. Right now, I’m identifying several anchor tenants. My ultimate goal is to have a space here in Austin for every technology group to share ideas and work together.
Best regards,
Hall T.
What is your background?
I come from the enterprise software arena. Back when I started you could put your arms around what is software. Today it’s much more diverse. I helped launch three Austin Ventures backed software companies. The first was called Ventix that was an enterprise software knowledge management play. When Ventix was acquired by Motive, we spun out Question.com that was also acquired, and most recently I spent six years growing Troux Technologies. A year ago I left Troux and started SciVestor to create research into new technology areas that are going to change the world.
I see you have artificial intelligence, nanotechnology, and robotics as target areas for your company which provides research. Why did you pick those areas?
If you look at Moore’s law with exponential growth curves, it applies to those areas just as it did software. We’re at a point now that there’s so much processing power available that the second wave of industries will start to take advantage of it. Robotics is starting to see significant returns in medical applications and more. The power that Moore’s law brought to the software industry will now amplify these other areas. While software changed the way we lived, these other areas have the potential of making an even more dramatic change to the way society operations in the decades ahead.
How did you get into these areas?
Ray Kurzweil’s writings were very influential to me. The book called The Singularity Is Near encouraged me to look at these new technologies. That led me to the Singularity Institute for Artificial Intelligence in the Bay area which is a non-profit where I serve as the Director of Partnerships. The Semantic Web space is very interesting because it will lead to the next generation of artificial intelligence.
What is the Semantic Web space about?
It’s about understanding who I am, my context, and what I want to accomplish and using that information and the Internet to deliver results. It could use my speech, gestures, or whatever I offer to help determine what I want. The Semantic Web space is a precursor to the next generation artificial intelligence effort. As an example, Microsoft recently acquired virtually unheard of Powerset for $100 Million – an emerging semantic technology company. They developed a search engine that would parse through Wikipedia and be able to answer questions like, “Which Presidents died in office?” Semantically it would start to understand what you are talking about and give you answers.
What do you think about nanotechnology?
There are again fundamental underlying technologies that will be powerful in the decades ahead. Moore’s law, that exponential growth, sneaks up on you and you don’t know it’s coming for a while and then it pops up. Nanotechnology is coming but is still below the radar.
What about robotics?
One area I’m interested in is the autonomous vehicle space. It’s come a long way in a short amount of time. In the first DARPA Grand Challenge in 2005 – a competition for demonstrating autonomous vehicles hosted by the Department of Defense, the first competition, the lead vehicle only went 11 miles in the 100 mile race. In the 2006 event, 22 of the teams got further than the lead vehicle from the competition a year and a half before. I recently gave a presentation at the Robobusiness Conference on the topic. It’s a pretty interesting space for me because it’s been a sleepy space for so many years with manufacturing robots and now with the emergence of iRobot--the vacuum cleaner, and the use of robots in the military for autonomous vehicles, and the use of robots in the healthcare space. There’s a good chance that a decade from now most people will have some kind of robot in their house providing value for them.
My wife wants an iRobot. I didn’t think she would go for it.
Our Robot Central blog has done some research on the anthropomorphism of people taking the iRobot and dressing them, taking them with them on vacation, and more. One guy would clean the room first before turning on the iRobot because he didn’t want it to work too hard.
What other trends do you see emerging?
Locally here in Austin, I’ve noticed that there are so many groups forming around different technologies. Meetups if you will. For example, I was at a meeting of Semantic Web that came together through Twitter spontaneously. I find these groups want to socialize and share information. I now see people wanting to share workspaces to collaborate, bounce ideas off each other and have a physical business social network. I have an idea called Tech Ranch Austin that is part co-working space and part technology incubator space. I have companies that want office space but not at A-grade real estate prices. Right now, I’m identifying several anchor tenants. My ultimate goal is to have a space here in Austin for every technology group to share ideas and work together.
Best regards,
Hall T.
Wednesday, August 6, 2008
Paul Groepler of Santo Spirits Talks about his latest venture with Tequila
Paul Groepler of Santo Spirits Talks about his latest venture with Tequila, the trend called Premiumization and Brand Ambassadorship, and the three most important things in consumer products.
In our last startup, we came out with new ‘super-premium’ vodka. On this deal, I’m working on a new tequila. I think it’s even better than the market for vodka. This is not my first startup. This is my eleventh. In my case, I have had one consumer product company prior to the Vodka. Now we have tequila. So this is number three for me. The other was a fashion accessory. Our other team members have built brands much larger than we will this time, so I am confident about that aspect. In addition, our ceo has sold liquor to Mexico, the USA and Canada, so we have the channel as well.
What about getting a restaurant investor to invest in the tequila deal?
You can’t. For example we have spoken to the owners of a local restaurant and also a bar, who both really wanted to invest but the federal liquor laws allow you to be in only one of three of three-tiered systems – manufacturer, distributor, or retailer. I’ve not given up Austin because I haven’t been able to raise money here. But it has been a little challenging.
What is special about your tequila?
Well, a couple of things. First, I always enjoy that question, because I think 2 of the most interesting questions I get are number one - ‘How are you going to beat _ Patron and number two - ‘Why another tequila?’
There are three big market spaces in the liquor industry, whisky is the biggest, tequila is the second, and vodka is the third. We just went from the third to the second. There are more competitors in the vodka space than tequila. You can prove that by going into a liquor store, and seeing how much tequila is there and how much vodka? So I’m happy to play in a space with fewer competitors and bigger margins. So that’s not answering your question, that’s just sort of sizing up why we’re doing this at all.
If you want to buy a really nice tequila as a gift for somebody, what have you got? There aren’t that many, probably about three or four, and those are mostly brand-based, e.g. they don’t taste at the level of their purchase price.
So what we’re doing is we’re taking this ‘value for price’ and packaging it and positioning it as ‘ultra premium’ selling as a ‘super premium’, because there is this trend going on called “trading up” or “premiumization”. The brand guys call it “premiumization”. We are not inventing the wheel, we are just riding it.
The three most important things in consumer products are package, package, and package! You see it before you smell it, taste it, and touch it. For our vodka, we used Icelandic glacier water. I mean that’s positioning, that’s top notch. The bottle was a stand-out and everybody loved it. In addition, we distilled it an extraordinary seven times. No on does that. Ther are no more left-over distillates, so the vodka, along with the super-pure glacier water is very clean, very smooth, very crisp.
What do you call it?
IS Vodka, but ice is spelt I-S because it’s the Icelandic word for ice. So you get some creative confusion in the minde, like ‘is’, ‘ice’, ‘ice’, ‘is’, hmm and your brain works on it and you are going to remember it.
So how do you penetrate the market with a new tequila?
The way that you do this is you don’t put a particular advertisement that says ‘We’ve got a new tequila.’ You go about a multi-pronged approach including brand-ambassadorship and ‘buzz’. You go around to the trendiest clubs, nightclubs and bars in that city where you are launching, and you have events and you do that with what I call brand ambassador.
This product (tequila Ambhar™) is more of your sipping-man’s tequila; this is your late 20’s through mid-forties crowd that wants to be just that little bit nicer a bit better. They don’t want Wal-Mart, they don’t want the Piano Bar on 6th Street, you know that sort of thing, or to do the nasty shots of 4-dollar tequila.
So you get your brand ambassadors, and these are women and men, who are tastefully dressed. They go around to these clubs and bars and take part in the events and are continually putting this in front of the bar manager, waitresses, and customers, and saying here it is. We will be launching in Austin like that, that will be in October.
What are the profit margins on this product?
We made $84.00 a case on Vodka, the case is 12 bottles, and we almost doubled that with tequila. So it’s a much bigger profit.
Why does it cost less?
It’s made in Mexico, and it is logistically centralized. Our markup on the Vodka is about 220%. Not bad, but our market on the tequila is about 312%
It’s also simpler to make from a logistics perspective. For the vodka, we had the bottle made in Spain, it was decorated in Belgium, the cap came out from Canada, the water came from Iceland, and it was distilled in a distillery outside London. It is then packaged in a box and put back on a ship to the US or wherever it is going.. But the tequila has to come from one place in Mexico. It’s got to be from a certain region. The tequila certification board is a Mexican regulatory body, which certifies all the distilleries.
Also, since the product is in Mexico, is just a ‘truck roll’ that’s hours from the border, not weeks. So it’s a lot tighter on the logistical turn time. It costs us $5.81 to make this and we add about a $4.00 marketing and sales cost to it. By the time it gets to the distributor to whom we wholesale for $32 and our mark up is $22, that’s not bad. Remember, in the US we cannot sell directly to the end-customer (e.g. restaurant, bar) due to the federally mandated ‘three-tier’ system.
We’ll break-even at 6000 cases, that’s 12 bottles a case. Our launch is around 5000 and that’s already spoken for, by a single customer.
Who’s buying that first 5000?
Sam’s Club Mexico. Our CEO has a relationship with Sam’s, Mexico. Please note also that Sam’s in Mexico is not Sam’s here. In Mexico they are the main suppliers of restaurants and bars.
So you are launching in Austin but your first customer is actually in Mexico. What’s your expansion plan? Where do you go next? The 80-20 rule applies for tequila, namely that the 80% of tequila consumption is by 20% of the United States, and these states are located in the Southwest: Texas, California, Arizona, Nevada and New Mexico. These are our ‘target market’ states in the US.
There are 3 cities that comprise our initial launch, they are Austin, San Antonio, and Las Vegas. The sales team just got back from a wonderful pre-sales trip to Vegas. We are in the process of getting letters of intent from the casinos there, including: Mandalay Bay, MGM, Mirage, and more. Things are heating up quickly!
Best regards,
Hall T.
In our last startup, we came out with new ‘super-premium’ vodka. On this deal, I’m working on a new tequila. I think it’s even better than the market for vodka. This is not my first startup. This is my eleventh. In my case, I have had one consumer product company prior to the Vodka. Now we have tequila. So this is number three for me. The other was a fashion accessory. Our other team members have built brands much larger than we will this time, so I am confident about that aspect. In addition, our ceo has sold liquor to Mexico, the USA and Canada, so we have the channel as well.
What about getting a restaurant investor to invest in the tequila deal?
You can’t. For example we have spoken to the owners of a local restaurant and also a bar, who both really wanted to invest but the federal liquor laws allow you to be in only one of three of three-tiered systems – manufacturer, distributor, or retailer. I’ve not given up Austin because I haven’t been able to raise money here. But it has been a little challenging.
What is special about your tequila?
Well, a couple of things. First, I always enjoy that question, because I think 2 of the most interesting questions I get are number one - ‘How are you going to beat _ Patron and number two - ‘Why another tequila?’
There are three big market spaces in the liquor industry, whisky is the biggest, tequila is the second, and vodka is the third. We just went from the third to the second. There are more competitors in the vodka space than tequila. You can prove that by going into a liquor store, and seeing how much tequila is there and how much vodka? So I’m happy to play in a space with fewer competitors and bigger margins. So that’s not answering your question, that’s just sort of sizing up why we’re doing this at all.
If you want to buy a really nice tequila as a gift for somebody, what have you got? There aren’t that many, probably about three or four, and those are mostly brand-based, e.g. they don’t taste at the level of their purchase price.
So what we’re doing is we’re taking this ‘value for price’ and packaging it and positioning it as ‘ultra premium’ selling as a ‘super premium’, because there is this trend going on called “trading up” or “premiumization”. The brand guys call it “premiumization”. We are not inventing the wheel, we are just riding it.
The three most important things in consumer products are package, package, and package! You see it before you smell it, taste it, and touch it. For our vodka, we used Icelandic glacier water. I mean that’s positioning, that’s top notch. The bottle was a stand-out and everybody loved it. In addition, we distilled it an extraordinary seven times. No on does that. Ther are no more left-over distillates, so the vodka, along with the super-pure glacier water is very clean, very smooth, very crisp.
What do you call it?
IS Vodka, but ice is spelt I-S because it’s the Icelandic word for ice. So you get some creative confusion in the minde, like ‘is’, ‘ice’, ‘ice’, ‘is’, hmm and your brain works on it and you are going to remember it.
So how do you penetrate the market with a new tequila?
The way that you do this is you don’t put a particular advertisement that says ‘We’ve got a new tequila.’ You go about a multi-pronged approach including brand-ambassadorship and ‘buzz’. You go around to the trendiest clubs, nightclubs and bars in that city where you are launching, and you have events and you do that with what I call brand ambassador.
This product (tequila Ambhar™) is more of your sipping-man’s tequila; this is your late 20’s through mid-forties crowd that wants to be just that little bit nicer a bit better. They don’t want Wal-Mart, they don’t want the Piano Bar on 6th Street, you know that sort of thing, or to do the nasty shots of 4-dollar tequila.
So you get your brand ambassadors, and these are women and men, who are tastefully dressed. They go around to these clubs and bars and take part in the events and are continually putting this in front of the bar manager, waitresses, and customers, and saying here it is. We will be launching in Austin like that, that will be in October.
What are the profit margins on this product?
We made $84.00 a case on Vodka, the case is 12 bottles, and we almost doubled that with tequila. So it’s a much bigger profit.
Why does it cost less?
It’s made in Mexico, and it is logistically centralized. Our markup on the Vodka is about 220%. Not bad, but our market on the tequila is about 312%
It’s also simpler to make from a logistics perspective. For the vodka, we had the bottle made in Spain, it was decorated in Belgium, the cap came out from Canada, the water came from Iceland, and it was distilled in a distillery outside London. It is then packaged in a box and put back on a ship to the US or wherever it is going.. But the tequila has to come from one place in Mexico. It’s got to be from a certain region. The tequila certification board is a Mexican regulatory body, which certifies all the distilleries.
Also, since the product is in Mexico, is just a ‘truck roll’ that’s hours from the border, not weeks. So it’s a lot tighter on the logistical turn time. It costs us $5.81 to make this and we add about a $4.00 marketing and sales cost to it. By the time it gets to the distributor to whom we wholesale for $32 and our mark up is $22, that’s not bad. Remember, in the US we cannot sell directly to the end-customer (e.g. restaurant, bar) due to the federally mandated ‘three-tier’ system.
We’ll break-even at 6000 cases, that’s 12 bottles a case. Our launch is around 5000 and that’s already spoken for, by a single customer.
Who’s buying that first 5000?
Sam’s Club Mexico. Our CEO has a relationship with Sam’s, Mexico. Please note also that Sam’s in Mexico is not Sam’s here. In Mexico they are the main suppliers of restaurants and bars.
So you are launching in Austin but your first customer is actually in Mexico. What’s your expansion plan? Where do you go next? The 80-20 rule applies for tequila, namely that the 80% of tequila consumption is by 20% of the United States, and these states are located in the Southwest: Texas, California, Arizona, Nevada and New Mexico. These are our ‘target market’ states in the US.
There are 3 cities that comprise our initial launch, they are Austin, San Antonio, and Las Vegas. The sales team just got back from a wonderful pre-sales trip to Vegas. We are in the process of getting letters of intent from the casinos there, including: Mandalay Bay, MGM, Mirage, and more. Things are heating up quickly!
Best regards,
Hall T.
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