July 29, 2007

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Interview #14 - Chuck Sacco - Phindme.net

Last but certainly not least, we have Chuck Sacco, a co-founder of PhindMe, speaking on his experiences taking a startup from an MBA class business plan to full fledged startup.

1. For those of us who are unfamiliar with you, could you briefly describe who you are and what you do?

PhindMe is an Internet marketing company, building a mobile-marketing platform that improves the delivery of local business information to consumer’s mobile devices. We combine a number of Web 2.0 and mobile technologies onto an advertising-based search platform that local businesses use to increase their revenues. This patent-pending platform is distributed to local businesses using an indirect model, as we partner with existing print and Web-based publishers of local-business content that need a quick-to-deploy mobile-marketing service. So our approach is to help those local business content intermediaries that today are being displaced by search engines and social networks, and providing them with tools to fight back and regain advertising revenues that are being lost to new media companies. We are in beta testing now and expect to go nationwide with the service over the next six months.

2. You’re in a unique position in that you are bringing mobile social media to brick and mortar establishments. Has it been hard to introduce this type of marketing to these businesses?

Prior to building our platform, we surveyed a number of local businesses about this type of service and got great feedback. Everything points to the fact that businesses are always looking for new ways to reach consumers, but they also want something that is easy-to-deploy as it is budget-conscious. We also need to consider the fact that most local businesses still don’t have something as basic as a website. So there’s a huge untapped opportunity to help brick and mortar establishments reach consumers using more fluid conversations than you can with static websites.

Here’s something to consider: the irony of the Internet is that it helps you find a business half-way around the world, but it’s nearly impossible to find the same type of business in your town. That’s where we come in, trying to help local businesses create new conversations with consumers as they come into their area. We think the mobile phone, with its evolution as an information tool, will be a great way to do this, and that local businesses will be able to improve their marketing to consumers. We just need to make it simple. And cheap.

3. Phindme originated from an MBA project at Drexel University. What have been the pros and cons of creating your startup in academia?

The great part was the mentoring and access to resources that are part of the university experience. Even today, we pull on university resources available to us, and in-turn we hope to become part of the success story for Drexel. There really haven’t been a lot of downsides, other than we had to delay the commercialization of the business a year until we finished our MBA program, otherwise I’m not sure we would have been able to concentrate well on either.

4. Building relationship with classmates is one of the more common answers to how new entrepreneurs can find co-founders. What are your thoughts on founding startups with classmates? What lessons have you learned about sharing equity with these co-founders?

We were very lucky in having created a great team of four, almost by chance. The synergies of that team carried us through the first phase of our existence, and all four are listed as inventors on our patents. Some very bright people. Of course, as the business evolves, each founder needs to determine their commitment and desired place in the business. Because at the start, all four founders had full-time jobs elsewhere, it was a different decision criteria for each. So we had to go through some difficult discussions to ensure that we were making the best use of our equity. In the end, we restructured our membership agreement to reflect the desired commitment of each founder, which enabled us to use our some of our equity to attract new talent. That hopefully benefits all founders.

5. Has your business plan that took you to the finals in the Drexel business plan competition played an important role as you’ve moved forward?

That first plan was started with a lot of great ideas which made it very product focused. What we’ve learned in testing our ideas on prospective customers and with the help of our advisory board is that the business model is equally if not more important than the product. So over the course of the past year, we’ve probably gone through 3-4 iterations of the plan, refining it each time to get to an optimal state. Of course, as new technologies come on-line, and as new customer conversations generate new ideas, you always have to go back to the plan and refine it. For example, the iPhone didn’t exist when we started the business. Now we have to consider how that plays into this evolving market. It’s important to keep in mind that the business plan itself is much less important than the thinking and planning processes you go through to develop it. No doubt we’ll always be refining it.

6. You have hired a top notch lawyer and are pursuing 3 patents. Besides the fact that the legal side of your startup is well taken care of, what other benefits does a prominent lawyer bring to a startup?

Our experience with lawyers has been mixed. We have recently transitioned from a firm that was not very responsive to a firm that seems to be in tune with the needs of a startup. I don’t think we’ve realized the full benefits yet as we are just starting our fund raising, but I would say that their network is the biggest benefit. A well connected firm will be able to help you with solid introductions in the investment community. We’ve already had some of that benefit, and I’m confident that we will be represented well. Some advice: if I had to do it over, I would probably retain a couple of different firms. Maybe one for the business and investment side and one for the intellectual property side. In a large firm you end up with different lawyers anyway depending on their practice area, so it wouldn’t seem to hurt by using multiple firms and seeing which is the best fit.

Thanks very much Chuck; we’ll look forward to watching PhindMe grow and progress. All the best!