Dr. Joe DeSimone took his own path to entrepreneurship. His latest venture, Carbon, is changing the way things are made.
He’s assembled one of the most impressive Board of Directors and line up of investors to transform the $300 billion manufacturing industry.
Joe recently appeared as a guest on the DealMakers Podcast. During his exclusive interview, he shared how his team is transforming how the world makes things, the fundraising process, what it’s like building a nearly 500 person company in less than 6 years, and many more topics.
From Academia to Entrepreneurship
Joe DeSimone was born and raised in the suburbs of Philadelphia. Ever since high school, Joe found he had a knack for chemistry. For both understanding it and for teaching it.
He attended Ursinus College, and then Virginia Tech for his Ph.D. On a tip from a faculty advisor, he went to check out the University of North Carolina, at Chapel Hill—-one of the top 10 chemistry departments in the country.
If he would teach organic and polymer chemistry, then they would give him $500,000 to start a research program. He was convinced. At UNC, he enjoyed a highly successful career as a professor for 25 years.
Joe taught a lot of students chemistry and mentored many researchers. He learned that people have very different learning styles. From his perspective, if you want to be a great teacher, you have to take responsibility for explaining complicated topics in accessible ways.
It turns out that is a really important trait for entrepreneurs too. It’s a valuable skill whether you’re doing it in a classroom setting, talking to VCs or investors, or your own employees. The importance of bringing people along with you.
His position in academia enabled Joe DeSimone to pursue a handful of interesting startups based on his research before he launching his newest venture, Carbon, in 2013.
His first company was BioStent. A partnership with an interventional cardiologist at Duke University. They developed a coronary stent that is polymeric instead of metal-based. It dissolves in the body after 18 months, once blood vessels can operate on their own again. The company was acquired by Guidant, and then Abbott.
Next, it was Liquidia Technologies, a partnership with one of Joe’s Ph.D. students including Jason Rolland, now SVP of Materials at Carbon. Liquidia went IPO last year.
They developed technology that leveraged tools from the computer industry to make precision nanoparticles. It spawned new and more effective ways to deliver medicines to the airway.
It has proven valuable in improving treatment approaches for diseases like pulmonary arterial hypertension, and in creating next-generation vaccine platforms for infectious diseases and certain cancers.
After spending 25 as a faculty member at UNC, the opportunity to go to Silicon Valley and take on a new entrepreneurial challenge was something Joe couldn’t pass up.
UNC agreed he could take a sabbatical to pursue his idea. That was five years ago.
Departing Academia for Silicon Valley
When Joe left North Carolina for Silicon Valley to found Carbon, he didn’t know what the future would hold. Carbon is now one of the world’s leading digital manufacturing companies.
Based in Redwood City, Carbon’s mission is to enable companies to make breakthrough products that can improve human health and well being, transform industries, and change the world.
Joe launched the company and its groundbreaking Digital Light Synthesis™ (DLS) technology on the TED stage in 2015. DLS fuses light and oxygen to rapidly produce products from a pool of resin. Using DLS technology, Carbon is enabling companies like Adidas, Riddell, Ford and Johnson & Johnson to create breakthrough products at speeds and volumes never before possible, finally fulfilling the promise of 3D printing.
Joe believes that empowering product teams to make breakthrough products and bring them to market faster will change the way we live.
Carbon has cracked the code on 3D printing at scale. The manufacturing industry is a $12 trillion market and manufacturing polymers is a $330 billion market. There is enormous potential here for Carbon to lead the digital revolution in manufacturing.
Creating a Company Differentiated by its Technology, Business Model and Team
With a team of nearly 500 employees around the world, Carbon has also assembled an impressive team of board members and investors while raising $680 million in the process at a $2.5 billion valuation.
Carbon’s board includes former Chairman and CEO of DuPont, Ellen Kullman, former CEO of Ford Motor Company, and former CEO of Boeing’s Aircraft Division, Alan Mulally, and Sequoia’s Jim Goetz.
Some of their investors include Sequoia, Google Ventures, GE, Adidas, BMW, Johnson & Johnson, and JSR. They’ve also got Fidelity, Baillie Gifford, and Madrone Capital Partners as well as investment from additional international sovereign funds.
Storytelling is everything in fundraising and Carbon was able to master this. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Critical Ingredients for a Successful Company
During the interview, Joe shared three of the most important components of building a successful company as being:
1. The importance of IP and patent-protection
2. Building highly differentiated technology
3. Assembling a world class team of people that are committed, passionate, and talented
DeSimone also shared his thoughts on the similarities between academia and entrepreneurship such as the importance of bringing people along with you and painting a vision for the future and how the world can be different.
Listen in to the full podcast episode to find out more, including:
I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs. Most recently, I built and exited CoFoundersLab which is one of the largest communities of founders online. Prior to CoFoundersLab, I worked as a lawyer at King & Spalding where I was involved in one of the biggest investment arbitration cases in history ($113 billion at stake). I am an active speaker and have given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business. I have been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide my stands on the new regulatory changes concerning fundraising online
A novel about who really invented the lightbulb by the screenwriter behind the Oscar-wining film “The Imitation Game.” It features the intertwining stories of Nikola Tesla, Thomas Edison, and George Westinghouse.
When a young Stanford neurosurgeon is diagnosed with lung cancer, he sets out to write a memoir about mortality, memory, family, medicine, literature, philosophy, and religion. It’s a tear-jerker, with an epilogue written by his wife Dr. Lucy Kalanithi, who survives him, along with their young daughter.
Westover, raised in the mountains of Idaho in a family of survivalists, didn’t go to school until she was 17. She would go on to earn a PhD from Cambridge University. This memoir chronicles her path towards higher education.
It’s what was passed on from Buffett’s father to Warren–the principle of having an “Inner Scorecard” rather than an “Outer Scorecard.” Either one can get you to success, but one matters more than the other. Buffett said:
The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard.
Unpacking Buffett’s “inner scorecard” principle
An outer scorecard is what most people have or want, often driven by hubris, greed, or a life lived off-balance. It’s an external measure of success that attempts to answer elusive questions like, “What do people think of me, my success, my image, or my brand?”
The inner scorecard is intrinsic and it defines who you are at the core of your values and beliefs. The focus is on doing the right things and serving people well instead of on what other people think of you. In one simple but hard-to-attain word in business, it’s about being authentic.
The inner scorecard has been the Warren Buffett way and what has worked for the self-made billionaire his entire life. It’s taking the higher road and it’s paid off for Buffett.
Investor and author Guy Spier writes in his book The Education of a Value Investor, “One of Buffett’s defining characteristics is that he so clearly lives by his own inner scorecard. It isn’t just that he does what’s right, but that he does what’s right for him … There’s nothing fake or forced about him. He sees no reason to compromise his standards or violate his beliefs.”
Here are four examples of how living by your own inner scorecard can lead to success, as it has for Buffett.
1. Start with what you teach your kids.
In Alice Schroeder’s The Snowball: Warren Buffett and the Business of Life, she quotes Buffett offering a parenting tip: “In teaching your kids, I think the lesson they’re learning at a very, very early age is what their parents put the emphasis on. If all the emphasis is on what the world’s going to think about you, forgetting about how you really behave, you’ll wind up with an Outer Scorecard. Now my dad: He was a hundred percent Inner Scorecard guy.”
2. Beware of whom you hang out with.
One summer after graduating from Columbia University, Buffett had to fulfill his obligation to the National Guard and attend training camp for a few weeks. That experience taught him one incredible lesson: hang around people who are better than you.
Buffett said in The Snowball, “To fit in, all you had to do was be willing to read comic books. About an hour after I got there, I was reading comic books. Everybody else was reading comic books, why shouldn’t I? My vocabulary shrank to about four words, and you can guess what they were.
“I learned that it pays to hang around with people better than you are because you will float upward a little bit. And if you hang around with people that behave worse than you, pretty soon you’ll start sliding down the pole. It just works that way.”
3. Don’t forget the only two rules of investing you’ll ever need.
Buffett pares down his inner scorecard investment philosophy to two simple sound bites. He says, “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.”
Yes, he’s made billions but he has also personally lost billions–about $23 billion during the financial recession of 2008. What Buffett alludes to here is mindset–having a sensible approach to investing. That means doing your homework, finding sustainable businesses with good reputations, and avoiding being frivolous and gambling away your money. Buffett never invests prepared to lose money, and neither should you.
4. Never waver away from what matters most to you.
Buffett’s success is not so much about what he has done as it is about what he hasn’t done. With all the demands on him every day, Buffett learned a long time ago that the greatest commodity of all is time. He simply mastered the art and practice of setting boundaries for himself.
That’s why this Buffett quote remains a powerful life lesson. The mega-mogul said:
The difference between successful people and really successful people is that really successful people say no to almost everything.
This advice speaks directly to our inner scorecard. We have to know what to shoot for to simplify our lives. It means saying no over and over again to the unimportant things flying in our direction every day and remaining focused on saying yes to the few things that truly matter.
Billionaire John Gokongwei’s Robinsons Retail Holdings Inc. is considering an exit from the fashion business as it struggles to compete with cheaper, faster chains like Fast Retailing Co.’s Uniqlo. Stock jumps to three-week high.
The Filipino retail giant, whose fashion portfolio includes the Topshop and Dorothy Perkins brands, instead sees better returns from pet, health and beauty products where demand is growing, said Chief Executive Officer Robina Gokongwei-Pe in an interview.
“We are shrinking fashion, for it has become very difficult,” Gokongwei-Pe said. “There are other brands that came in who are more progressive and cheaper. We are already reducing the number of stores and we have to think if we move out altogether.”
The Manila-based company is relooking its business as it faces shrinking operating margins and growing competition in the low-cost space. It’s pivoting into wooing higher-spending consumers by entering into the premium grocery market, as well as expanding foreign franchises in beauty products and pet care, hoping to achieve 15% revenue growth annually for the next five years.
“Pets have become very big,” said Gokongwei-Pe. “Dogs now are very spoiled. Just look at Instagram and Facebook, it’s all about dogs. You should put money where the money is, which is food, drugstores, hardware, and growing businesses like pets and beauty.”
Robinsons Retail’s fashion portfolio has contracted to six brands and 40 stores at end-2018 from nine brands with 60 stores in 2014. Fashion is among the company’s specialty shops, which were cut to 341 in March from 387 at end-2018.
The company in December bought the local franchise for South Korean personal care and beauty products retailer Arcova and Club Clio, adding to 15 stand-alone stores selling Elizabeth Arden, Shiseido and Benefit Cosmetics. It also procured the license for Singapore’s Pet Lovers Centre in October and plans to open a second outlet as early as this year.
“Robinsons Retail is deploying its capital in a way that promises more growth,” said Miguel Ong, analyst at AP Securities Inc. “Fashion isn’t attractive as before with the rise of online platforms and brands like Uniqlo dominating the market.”
Under a five-year plan targeting mid-to-high teen revenue growth, Robinsons Retail will spend between three billion pesos ($59 million) and five billion pesos to add 100 to 150 stores a year, according to Gokongwei-Pe. The retailer has 1,911 stores in various formats, excluding 1,960 outlets of its The Generics Pharmacy.
Revenue contribution from supermarkets will rise to 55% this year from 47% in 2018 after its acquisition of former rival Rustan Supercenters, whose 36 supermarkets cater to affluent shoppers. Robinsons Retail’s own 160 supermarkets cater mainly to mainstream consumers.
The acquisition and other new stores will improve gross profit margin by 10 to 20 basis points this year, said Gokongwei-Pe.
Operating margin, which fell below 5% in 2018, will shrink further due to write-offs related to the Rustan purchase. It will “definitely” improve in 2020, when the integration is completed, she said.
A foreign executive has been hired to manage Mini Stop, which has potential to double its 5% sales contribution in 2018, if the convenience stores are “scientifically” ran.
Robinsons Retail is considering creating its own e-commerce app for its supermarkets to fill the gap left by Honestbee’s closure in the Philippines. It may start from scratch or expand Growsari Inc., a grocery delivery service for mom-and-pop stores.
The closure of Honestbee caused a dip in supermarket sales and will impact this year’s performance as same-store sales growth could have been 4.2% to 4.5% instead of 3%.
Edgar Sia’s fortunes increased more than fivefold to $475 million since debuting on Forbes Asia’s list of the 50 richest Filipinos in 2011.
Edgar Sia II made his fortune a decade ago feeding the Philippines’ appetite for chicken. Now he stands to make an even larger one feeding China’s appetite for gambling. Sia’s company DoubleDragon Properties spent the last few years building, among other things, office towers along Manila’s once-sleepy waterfront. Sia figured he’d lease the space out to call centers and business process outsourcers, key drivers of economic growth in recent years. He estimated that he could collect about $14 a square meter.
He didn’t count on demand from across the South China Sea. DoubleDragon got its towers up and running just as warming ties between Beijing and Manila sparked a boom in arrivals by Chinese eager to open offshore casinos offering online gaming to countrymen back home where casinos are illegal. DoubleDragon’s Meridian Park complex is a 10-minute drive from Manila’s Entertainment City casino complex. Sia found himself not only among the largest commercial property owners in the area, but the only one with new property to rent.
By the end of last year, tenants were signing leases for nearly $24 a square meter. “We were positively surprised with the outcome,” DoubleDragon’s 42-year-old chairman and chief executive says, with considerable understatement. The boost from offshore China gaming is just part of a property push that’s helping turn Sia from fast-food tycoon into one of the country’s biggest commercial landlords.
Far from Manila Bay, DoubleDragon is building shopping malls, hotels and industrial warehouses in smaller cities across the Philippines. Last year, it tripled net profits to roughly 7.4 billion pesos ($141 million) as revenue more than doubled to 14.3 billion pesos. DoubleDragon’s stock has climbed more than 50% this year. The company is now looking to cash in on its office towers and community malls, package these as a REIT and raise as much as 15 billion pesos via an IPO.
“Most of the baby steps and growing pains happened in the past five years,” says Sia, whose aim is for DoubleDragon to build about 1.2 million square meters of leasable commercial space by the end of 2020. “In just about a year more, the company will already become a strong adult.”
Sia’s own entrepreneurial upbringing began early. While studying architecture in university at the age of 19, he dropped out to lead a group of classmates build a 5-story hotel for budget business travelers, borrowing 40 million pesos from parents and a government pension fund to buy the land and pay for construction. “I was talking to the landowner who didn’t take me seriously,” he recalls. “So I grew a mustache to make me look older.” Sia shaved his mustache. He still owns the hotel.
In 2003 one of the country’s largest shopping mall chains, Robinson’s, opened a new wing in Iloilo offering discounted rents for restaurants. Sia seized the opportunity to launch Mang Inasal, a fast-food chicken restaurant that means “Mr. Barbecue” in the Iloilo dialect. “It was a Filipino comfort food that had not yet been turned into a fast-food fare,” Sia says. “So we created the concept, and then rapidly grew to fill and dominate the gap.”
By 2010, he had grown his barbecue-chicken chain into the country’s second-biggest fast food group, with more than 312 branches, making it bigger than McDonald’s. He sold 70% to rival Jollibee Foods for 3 billion pesos and earned a spot as the youngest member of Forbes Asia’s 2011 list of the Philippines’ 50 richest with a fortune of $85 million when he was just 34 (Sia sold his remaining 30% of Mang Inasal in 2016.) He was No. 24 on last year’s list with a net worth of $475 million.
Edgar Sia II hopes to open 1,200 MerryMarts, a chain of grocery stores owned by his family, by 2030.
In 2013, he partnered with Jollibee founder Tony Tan Caktiong (No. 6 on the rich list) to found DoubleDragon, which went public the following year. Sia and Tan still own 35% each; Tan still sits on the board as co-chairman. Each owner’s stake is now worth about 21 billion pesos ($402 million). While its Manila Bay investment has proved unexpectedly profitable, most of DoubleDragon’s developments aren’t in Manila at all, but in small towns and cities across the country. It’s there that the company is building 60% of the commercial space it plans to build by 2020.
Sia’s wager is that rising household incomes and improving transport are about to trigger a sea change in the way consumers shop in these second- and third-tier cities. Small, family-owned supermarkets and shopping centers, he predicts, will give way to nationwide chains whose size gives them leverage over suppliers and lower costs. “Five years ago,” he says, “the top three retail chains accounted for less than 10% of the sales of manufacturers such as Unilever or Nestle. That’s gone up to a third today. In five years, it could rise to 70% to 80%.”
In preparation, Sia is building 100 shopping centers under his CityMalls brand in cities with an average population of only 160,000, each about a tenth the size of malls in bigger cities. The aim, Sia says, is to introduce big-name retail brands such as SM Savemore groceries or Watsons drugstores into these small, but increasingly affluent communities.
By the end of last year, Sia had achieved half his goal by opening 51 CityMalls. The average occupancy rate is already 96%, according to DoubleDragon, helping it more than double rental income last year from commercial and office buildings, to 2.5 billion pesos. International property consultancy Savills projects that CityMalls will account for about 40% of the community mall stock in newly urbanizing areas by next year. Sia says he’s already locked up the best locations in many emerging towns and cities: “Maybe [a competitor] can do it in one or two cities. But can you do it 100 times?”
Sia is also ramping up in the hotel sector where he got his start. DoubleDragon operates the Hotel 101 and Jinjiang Inns budget brands in the Philippines aimed at business travelers and tourists, particularly from China. As of the end of 2018, Sia had two Jinjiang Inns and one Hotel 101, contributing a combined 534 million pesos to DoubleDragon’s revenue. Two more are under construction and DoubleDragon plans to build four more this year and next. Sia is also looking for foreign partners to expand the Hotel 101 abroad.
Building community malls in small towns, Sia says, made him realize there’s also still room for another major grocery chain in the country. So in April, he launched the first branch of MerryMart, a chain of grocery stores owned directly by his family, on the ground floor of DoubleDragon’s Meridian Park complex. His aim is to open 1,200 MerryMarts by 2030. “If we properly prepare and execute,” he says, “MerryMart can still catch up with the large retail players in the Philippines.”
But the Manila Bay investment may be DoubleDragon’s biggest money-spinner. It broke ground on the Meridian Park complex in 2015 and, by the time four of its six towers were completed last year, the company had emerged as the area’s biggest owner of new office space, according to David Leechiu of Leechiu Property Consultants, which helped find tenants for the complex.
Its timing couldn’t have been better. Offshore gaming operators’ share of office space in Metro Manila rose sevenfold in 2018 from 2016, according to Leechiu Property, faster than any other industry. By the end of last year, they accounted for almost 30% of office rentals, tripling from two years earlier.
Most online casino operators favor Manila Bay because of its proximity to Entertainment City, which caters largely to Chinese visitors who become potential customers once they return home. Property values in the district jumped 81% between 2016 and 2018, according to Leechiu, outpacing the 58% rise in Makati, Manila’s financial district.
Sia leased 100,000 square meters in his first four office towers before they were even completed, 60% to online China gaming companies. For now at least, he can virtually name his price, says Leechiu. “The deal that we did [at 1,250 pesos a square meter] is for the last vacant space in the entire Bay area for the next 12 months. The tenants know that, so they grabbed it,” he says.
Not everyone is a believer. Before its recent rise, DoubleDragon’s stock spent three years in a tailspin. One nagging investor concern: Sia is building brick-and-mortar malls in an age of online shopping. Luis Limlingan, managing director at brokerage Regina Capital Market Development in Manila, says retail shops now take up just half of Philippine malls’ leasable space, down from 80% over the past 20 years. That has made DoubleDragon a no-go for some investors. “None of the large institutional local funds invest in it,” he says.
Sia says his malls are well-positioned to absorb the impact of e-commerce in the Philippines. Online buying and delivery of groceries has yet to take off in the Philippines, he says, and “CityMalls are already 75% food and services, and more than 80% of things sold in CityMall retail shops are basic non-discretionary items.” As e-commerce spreads to the smaller cities where CityMall dominates, Sia says, they’ll double as pickup points and fulfilment centers for online stores.
DoubleDragon’s rising rental income is proof enough to other investors. “DoubleDragon’s stock started to recover this year because the assets that were completed so far have started to generate good recurring income,” says Henry Ong, an independent personal financial advisor who follows the stock. And as Sia’s expansion converts into steady cash flow, it may give him a war chest for greater diversification, says Leechiu. “Once he has a scalable recurring income base, it’s so easy for him to use it as a springboard to go to other places. It’s so easy for him to go to other sectors.” Sia’s partner Tan agrees: “[He’s] the type of entrepreneur with unlimited potential. His ability to create new compelling ventures and execute with speed is unparalleled.”
Each year for the past five, Forbes has searched the country for the 25 fast-growing, venture-backed startups most likely to reach $1 billion in value. Graduates include: food delivery service DoorDash, home seller Opendoor, luggage brand Away and synthetic biology company Ginkgo Bioworks.
This year, with the help of TrueBridge Capital Partners, we scoured the country again for budding unicorns. TrueBridge analyzed the finances of more than 150 startups, then our reporters dug deeper. That research caught problems at San Francisco-based Cleo, a parenting app with a troubled workplace and a CEO who lied about her age and background. The company was removed from consideration after our investigation, and its CEO resigned in mid-June. (The full story is here.)
FOUNDERS: Michael Gronager (CEO), Jonathan Levin, Jan Moller
EQUITY RAISED: $53 million
ESTIMATED 2018 REVENUE: $8 million
LEAD INVESTORS: Accel, Benchmark
New York-based Chainalysis makes cryptocurrency investigation software that can shine light on how people use bitcoin, ethereum, litecoin and more. Financial institutions use the technology to screen customers and comply with regulations designed to prevent money laundering, while government agencies such as the Internal Revenue Service and the Federal Bureau of Investigation can identify illicit transactions and investigate alleged criminals. Before teaming up to found Chainalysis, CEO Michael Gronager, 49, cofounded cryptocurrency exchange Kraken, while CTO Jan Moller, 47, built the Mycelium cryptocurrency wallet.
FOUNDERS: Arshan Dabirsiaghi, Jeff Williams; CEO: Alan Naumann
EQUITY RAISED: $122 million
ESTIMATED 2018 REVENUE: $25 million
LEAD INVESTORS: Acero Capital, Battery Ventures, General Catalyst, Warburg Pincus
In 2010, software security analyst Jeff Williams, 52, started dedicating resources at his consultancy, Aspect, to developing a program that would automate software security analysis. In 2014, he and former Aspect analyst Arshan Dabirsiaghi, 36, founded Los Altos, California-based Contrast Security to monitor the code within running apps and directly notify developers of potential vulnerabilities. “The work that previously had to go through security experts now goes directly to developers,” says Dabirsiaghi, now the company’s chief scientist. In 2016, the company brought in an outside chief executive, Alan Naumann, formerly CEO of online fraud detection startup 41st Parameter, to expand the business.
FOUNDERS: Lior Div (CEO), Yossi Naar, Yonatan Striem-Amit
EQUITY RAISED: $189 million
ESTIMATED 2018 REVENUE: $50 million
LEAD INVESTORS: CRV, Lockheed Martin, Softbank, Spark Capital
Cofounders Lior Div, Yossi Naar, and Yonatan Striem-Amit met during their service in the Israel Defense Forces’ elite intelligence unit, Unit 8200, fertile ground for many high-tech startups. While working on cybersecurity in the military, they came up with the idea for Cybereason, a cloud-based cybersecurity platform specializing in continuous monitoring and response to advanced cybersecurity threats. The company launched in 2012, and relocated from Israel to Boston the next year. “You provide value by helping a big organization not to be in the news as someone that gets hacked,” says Div, 41.
FOUNDERS: Paras Chitrakar, Jason Wilk (CEO), John Wolanin
EQUITY RAISED: $13 million
ESTIMATED 2018 REVENUE: $19 million
LEAD INVESTORS: Mark Cuban, Section 32
As a college student at Loyola Marymount University, Jason Wilk, now 34, blew through his budget, collecting overdraft fees. Wilk, an avid “Redditor,” saw that overdraft fees are a common complaint among users. So in 2016, he founded Dave, short for David, who beat Goliath, which Wilk sees as the big banks. The app tracks expenses and warns when a user’s account is in danger of being overdrawn. It hit a nerve: Dave was Apple’s “app of the day” in April 2017, and has been downloaded nearly 10 million times in two years. “Entrepreneurs can keep their ear to the ground for the next idea,” Wilk says. “Any idea that can be Reddit tested is a good place to start.”
FOUNDERS: Blake Murray (CEO), Alex Bean
EQUITY RAISED: $257 million
ESTIMATED 2018 REVENUE: $8 million
LEAD INVESTORS: Insight Partners, New Enterprise Associates, Pelion Venture Partners
Expense tracking service Divvy is taking on Concur and Expensify by offering its budgeting, fraud detection, and spend management tools for free. Instead of charging per user, Lehi, Utah-based Divvy gives businesses custom Mastercards and takes a cut of merchants’ fees to the bank when people make purchases. Founders (and high school buddies) Alex Bean and Blake Murray, both 35, have won over more than 3,000 corporate customers so far, including WordPress, Evernote and Qualtrics.
FOUNDERS: Luis von Ahn (CEO), Severin Hacker
EQUITY RAISED: $108 million
ESTIMATED 2018 REVENUE: $36 million
LEAD INVESTORS: CapitalG, Kleiner Perkins, Union Square Ventures
The world’s most popular digital language-learning tool, seven-year-old Duolingo has 28 million monthly active users. Most use the free version of its gamified courses. Revenue, largely from subscription fees from ad-free Duolingo Plus, is expected to double this year. CEO Luis von Ahn, 39, is a 2006 winner of a MacArthur “genius” grant and a former Carnegie Mellon computer science professor. Before founding Pittsburgh-based Duolingo, he sold two inventions to Google, including reCAPTCHA, the software that spits out the squiggly lines you type to alert a website that you are not a bot. An immigrant from Guatemala City who says learning English transformed his life, he’s driven to offer free language education to the masses. For our feature on Duolingo, click here.
FOUNDERS: Marcelo Cortes, Daniele Perito, Max Rhodes (CEO)
EQUITY RAISED: $116 million
ESTIMATED 2018 REVENUE: $100 million
LEAD INVESTORS: Forerunner Ventures, Khosla Ventures, Lightspeed Venture Partners, Y Combinator
In a bid to help mom-and-pop stores survive in the age of Amazon, Faire wants to take the risk and hassle out of wholesale purchasing. The San Francisco-based company helps retailers discover and buy new products online, and will accept free returns from them within 60 days for items that don’t sell. Today, it offers 5,000 brands to 35,000 stores. CEO Max Rhodes, a 32-year-old former Square employee, came up with the idea after he started working with a New Zealand-based umbrella brand and spent thousands of dollars to sit at a tradeshow booth to convince U.S. store owners to stock the high-end umbrellas.
FOUNDERS: Dylan Field (CEO), Evan Wallace
EQUITY RAISED: $83 million
ESTIMATED 2018 REVENUE: $3 million
LEAD INVESTORS: Greylock, Index Ventures, Kleiner Perkins, Sequoia
Figma wants to move design online, casting aside the old model of software downloads and siloed creation in favor of a browser-based tool where designers can work and collaborate together. Founders Evan Wallace, 29, and Dylan Field, 27, met at Brown University—Wallace graduated, Field dropped out with a Thiel Fellowship—and launched the San Francisco-based company in 2012. Five years later, Figma started charging professionals to use its product. (Individuals are still free.) Today, professionals pay $12 per editor per month and businesses $45 per editor month to use Figma. More than 5,000 teams, at companies like Microsoft, Volvo, Uber and Square, are users. “Design is like this viral infectant because once your competitor is well-designed, you have to be well-designed, otherwise you’ll be disrupted,” says Field.
FOUNDERS: Arun Chandrasekaran, Matt Elenjickal (CEO)
EQUITY RAISED: $101 million
ESTIMATED 2018 REVENUE: $16 million
LEAD INVESTORS: August Capital, Bain Capital Ventures, Hyde Park Venture Partners
Matt Elenjickal, 37, a logistics geek with an MBA from Northwestern University’s Kellogg School of Management, founded FourKites in 2014 to help companies know where their deliveries are, when they’ll arrive and what’s going on along the way. Its predictive supply-chain management software is now used by more than 260 of the world’s top shippers — and upwards of 500,000 loads per day — including Best Buy, Kraft Heinz, Nestlé and Smithfield Foods. “If you are a shipper, once the truck leaves your facility you have no idea what is happening,” Elenjickal says. “That is how supply chains are run even now without a solution like FourKites. You cannot compete against Amazon.”
FOUNDERS: Mathilde Collin (CEO), Laurent Perrin
EQUITY RAISED: $79 million
ESTIMATED 2018 REVENUE: $16 million
LEAD INVESTORS: Sequoia, Uncork Capital
Mathilde Collin, an alumna of Forbes’ 30 Under 30 list, got the idea for Front while at her first job after graduate school. “I saw how much time was wasted with people sorting through their emails,” she says. So in 2013, she launched the San Francisco-based startup to help companies become more productive with a shared email inbox that incorporates Facebook, Twitter and SMS, and encourages team collaboration. Today, Front has 5,000 customers including Shopify, MailChimp and Stripe.
FOUNDERS: Sung Ho Choi, David Gandler (CEO), Alberto Horihuela
EQUITY RAISED: $145 million
ESTIMATED 2018 REVENUE: $74 million
LEAD INVESTORS: 21st Century Fox, Northzone, Sky
David Gandler, 44, a longtime network sales exec, launched FuboTV in 2015 to tap into pent-up demand in the United States for overseas soccer leagues. FuboTV offered live streams of soccer channels such as GolTV and Benfica TV to start, then expanded programming through deals with beIN Sports and Univision. Today, New York-based FuboTV is generally a cheaper alternative to cable (starting at $54.99 a month) that offers more than 90 channels.
FOUNDERS: Chris Clark, Stuart Landesberg (CEO), Jordan Savage
EQUITY RAISED: $213 million
ESTIMATED 2018 REVENUE: $104 million
LEAD INVESTORS: Bullpen Capital, General Atlantic, Lone Pine Ventures, Mayfield Fund, Norwest Venture Partners, Serious Change
Ask Grove Collaborative CEO Stuart Landesberg, 34, who his typical customer is, and he’ll give you a specific answer: “A 29-year-old mother of two working as a substitute teacher in Lawrence, Kansas.” Even in the age of Amazon, Grove has carved out a $104 million niche in e-commerce by selling natural products, from laundry detergent to sponges, in easy-to-order shipments. Around 60% of its revenue comes from products not sold on Amazon, says Landesberg. But he wants to do more than sell Seventh Generation or Method soaps online. In 2016, Grove started to manufacture its own all-natural products that now make up nearly 50% of its sales. The key? Designing products that are easier to ship. Its glass cleaner, for example, is highly-concentrated and smaller than a tube of toothpaste.
FOUNDERS: Augusto Marietti (CEO), Marco Palladino
EQUITY RAISED: $71 million
ESTIMATED 2018 REVENUE: $5 million
LEAD INVESTORS: Andreessen Horowitz, CRV, Index Ventures, New Enterprise Associates
Kong acts as a gatekeeper to companies’ APIs (code developers use to build apps) and monitors how often they’re used. Augusto Marietti, 31, and Marco Palladino, 30, launched the company out of a garage in Milan, where they both attended university, and were constantly flying back and forth to Silicon Valley to fundraise. “At this stage, we barely had enough money to eat,” Marietti says. “We definitely lost a few pounds when we were first starting up.” Now based in San Francisco, Kong has successfully penetrated the enterprise market with 130 customers that include SoulCycle, Yahoo Japan and WeWork.
FOUNDERS: Jack Altman (CEO), Eric Koslow
EQUITY RAISED: $27 million
ESTIMATED 2018 REVENUE: $7 million
LEAD INVESTORS: Shasta Ventures, Thrive Capital
Lattice founders Jack Altman, 30, and Eric Koslow, 28, learned first-hand the impact of work culture while working at startup Teespring, which sells custom t-shirts. In 2015, they decided to do something about it, starting Lattice. The San Francisco-based company’s human resources software uses surveys to shift the focus of performance management from employee evaluation to career development. Today, Lattice works with 1,300 customers, including Coinbase, Instacart, Slack and WeWork. “Employees are looking for more meaning from work than ever before, and have more visibility into and access to other jobs than ever before,” Altman says. Lattice helps their employers step up.
FOUNDERS: Elton Chung, Lidia Yan (CEO)
EQUITY RAISED: $125 million
ESTIMATED 2018 REVENUE: $46 million
LEAD INVESTORS: Brookfield Ventures, China Energy Group, Sequoia
Cofounded by husband and wife team Elton Chung and Lidia Yan in 2015, Los Angeles-based Next Trucking is moving freight brokerage online. While other startups like Convoy and Uber Freight move cargo from point A to point B, Next Trucking focuses on drayage, or the “first-mile” of transferring goods from port to warehouse. “Drayage is a lot more complicated because it involves terminals and ports,” says Yan, 38. As a result, Next Trucking has doubled revenue every year since 2016, reaching $46 million in 2018. Yan forecasts revenue will hit $120 million this year, helped by large contracts with retailers Dollar General, Rite Aid and Steve Madden. For our feature on Next Trucking, click here.
FOUNDERS: Jack Conte (CEO), Sam Yam
EQUITY RAISED: $166 million
ESTIMATED 2018 REVENUE: $35 million
LEAD INVESTORS: Freestyle Capital, Glade Brook Capital Partners, Index Ventures, Thrive Capital
Musician turned entrepreneur, Jack Conte, 35, wants to break the “starving artist” archetype by helping creators earn a regular income. “Deciding to be an artist shouldn’t have to be a difficult conversation,” says Conte. “It should feel like a viable career choice.” Using Patreon, artists offer exclusive experiences in return for contributions from their subscribers or “patrons.” HBO’s Issa Rae, Humans of New York founder Brandon Stanton and comedian Heather McDonald are some of the creators currently using Patreon and by 2019, the company expects to pay out more than $1 billion to its users.
FOUNDERS: Denis Mars (CEO), Simon Ratner
EQUITY RAISED: $14 million
ESTIMATED 2018 REVENUE: $1 million
LEAD INVESTOR: Kleiner Perkins
The Proxy app is like having a set of keys on your smartphone: Your profile’s signal gives you access to any building where you’re registered, eliminating the need for traditional ID cards and keys. It’s a straightforward idea, but Australian-expat founders Denis Mars, 42, and Simon Ratner, 39, are confident that they’ve just scratched the surface of its potential. So far, San Francisco-based Proxy has proven popular with commercial real estate clients like WeWork. Mars and Ratner now hope to expand their technology (which includes the app, management platform and signal-reading hardware) to identity verification for ride-sharing and event check-in.
FOUNDERS: Ofer Bengal (CEO), Yiftach Shoolman
EQUITY RAISED: $147 million
ESTIMATED 2018 REVENUE: $50 million
LEAD INVESTORS: Bain Capital Ventures, Francisco Partners, Goldman Sachs, Viola Ventures
Israeli tech veterans Ofer Bengal and Yiftach Shoolman set up a fast-database service, in 2011, to help businesses looking to speed up responses on their apps. Redis Labs relies on what’s known as NoSQL, an alternative form of compiling data that is faster than traditional models. That lightening-fast processing speed has helped it sign on FedEx, Mastercard and other corporate behemoths. To scale up quickly, the Mountain View, California-based company offered a free, open-source version to hook developers. In 2013, it rolled out a paid version with costs starting at $5 per month per gigabyte. “You can’t do without open source if you want rapid adoption,” says Bengal.
FOUNDERS: Shivaas Gulati, Josh Hug, Matt Oppenheimer (CEO)
EQUITY RAISED: $312 million
ESTIMATED 2018 REVENUE: $80 million
LEAD INVESTORS: Bezos Expeditions, DFJ Venture Capital (now Threshold Ventures), Generation Investment Management, Naspers’ PayU, QED Investors, Stripes Group
Remitly is taking on Western Union with lower fees — estimated 1.5% on average vs. the money-transfer giant’s 5%. Matt Oppenheimer, who had worked for Barclays in Kenya, and his cofounders launched the business in 2011 to help people in developed nations like the U.S. and Australia send money cheaply to relatives in developing countries like Mexico and the Philippines. Today, Remitly serves 60 countries and processes $6 billion a year in money transfers, about 1% of the nearly $700 billion remittance market. Already one of the largest fintech firms targeting immigrants, the Seattle startup’s long-term goal is to branch out into other financial services, potentially including credit cards, personal loans and auto loans.
FOUNDERS: Xuan Yong (CEO), Mike Witte
EQUITY RAISED: $94 million
ESTIMATED 2018 REVENUE: $21 million
LEAD INVESTORS: Bedrock Capital, Founders Fund, Quantum Energy Partners
There are nearly 1,000 rigs drilling for oil and gas in the U.S. Each well requires the input of dozens of service companies and workers — everything from high-horsepower compressors for fracking, to miles of steel pipe, and millions of gallons of water and truckloads of sand. Cofounder Xuan Yong, formerly of Citadel and D.E. Shaw, believes RigUp can improve on the good ol’ boy network by more efficiently connecting the “hyperfragmented” market of roughnecks, engineers and business owners with the big oil companies that call the shots. RigUp pre-vets workers and vendors, and creams an estimated 4% off every contract made via its online platform. Yong isn’t worried about machines invading the oilpatch. “Even with A.I. there will be demand growth for labor,” he says. “Field tickets are still signed on paper and stamped.” For now.
FOUNDERS: Stephen Hawthornthwaite, Roth Martin (interim CEO)
EQUITY RAISED: $42 million
ESTIMATED 2018 REVENUE: $140 million
LEAD INVESTORS: Goldman Sachs, Lightspeed Venture Partners
Founders Roth Martin, a former art gallery owner, and Stephen Hawthornthwaite (aka “Hawthy”), a former investment banker, launched the footwear brand after listening to their wives complain about the lack of stylish, comfortable shoes. Rothy’s 3D-knitted round-toe and point-toe flats, made from recycled plastic water bottles, have gained cult status. In just three years, it expanded rapidly with direct-to-consumer sales online, reaching revenue of $140 million last year. For our feature on Rothy’s, click here.
FOUNDERS: Phillip Liu, Karthik Rau (CEO)
EQUITY RAISED: $179 million
ESTIMATED 2018 REVENUE: $25 million
LEAD INVESTORS: Andreessen Horowitz, CRV, General Catalyst, Tiger Global Management
SignalFx monitors cloud infrastructure in real time for companies like Yelp, Shutterfly and HubSpot. In 2013, Karthik Rau, 41, who previously worked at tech startups LoudCloud and VMware, founded the company with ex-Facebook software architect Phillip Liu, 51. While competitors collect and query data in batches every two to three minutes, SignalFx evaluates and alerts users to anomalies in two to five seconds. “The difference between getting reliable alerts within seconds and getting them in minutes is the difference of seamlessly dealing with an issue,” says Rau. “Or having all of your users on Twitter complaining.”
FOUNDERS: Paul Dabrowski (CEO), Michael Dabrowski
EQUITY RAISED: $157 million
ESTIMATED 2018 REVENUE: $20 million
LEAD INVESTORS: Founders Fund, 8VC
Gene-editing tool Crispr has unleashed a gold rush for new products made possible by cheaply and easily editing DNA. Synthego is cashing in by selling the genomic equivalent of pickaxes, shovels, maps and other tools. Its ready-made and custom kits allow researchers in academia and the private sector to rapidly develop gene-edited products, including new medical treatments. Its founders, brothers Paul and Michael Dabrowski, 34 and 38, previously worked at SpaceX as engineers and drew on that experience to bring a new way of thinking to biotech.
FOUNDERS: Umar Afridi (CEO), Sid Viswanathan
EQUITY RAISED: $13 million
ESTIMATED 2018 REVENUE: $48 million
LEAD INVESTOR: Initialized Capital
If you buy birth control from Nurx or hair-loss products from Hims, behind-the-scenes pharmacy Truepill will actually fill and deliver your prescription. The three-year-old startup’s founders Umar Afridi, 37, a former retail pharmacist, and Sid Viswanathan, 35, who previously worked at Johnson & Johnson and LinkedIn, see a growing market in bringing technology and efficiency to pharmacy. Although Truepill started with direct-to-consumer brands, it’s now making a bigger play to bring on corporate customers with pricey, specialty medications.
FOUNDERS: Benjamin Bercovitz, Filip Kaliszan (CEO), James Ren, Hans Robertson
EQUITY RAISED: $59 million
ESTIMATED 2018 REVENUE: $20 million
LEAD INVESTORS: First Round, Meritech, Next47, Sequoia
While many startups have tackled the “smart home” with varying degrees of success, Verkada has exploded in shy of two years on the market by offering big businesses, municipalities and schools a cloud-based system that combines hardware and software to detect movement and easily store and share surveillance streams. In 2019, the company founded by three Stanford graduates and the former cofounder of Meraki (a cloud startup since acquired by Cisco) signed on the city of Memphis — a nearly 1,000-camera contract — Juul Labs and Newtown Public School District, the district of the 2012 Sandy Hook Elementary School shooting tragedy.
Additional reporting by Susan Adams, Elisabeth Brier, Dawn Chmielewski, Lauren Debter, Michael del Castillo, Jillian D’Onfro, Christopher Helman, Jeff Kauflin, Alex Knapp, Alex Konrad, Christian Kreznar and Monica Melton
Cover Photographs by Tim Pannell for Forbes | Illustrations by David Wilson
A Berkshire Hathaway shareholder arranges her shopping next to a large drawing of Chairman and CEO Warren Buffett, during a shareholders shopping event in Omaha, Neb., Friday, May 3, 2019, one day before Berkshire Hathaway’s annual shareholders meeting. An estimated 40,000 people are expected in town for the event, where Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger will preside over the meeting and spend hours answering questions. (AP Photo/Nati Harnik)
Berkshire Hathaway’s shareholders’ meeting as in past years yielded various insights on Warren Buffett’s and Charlie Munger’s insights on the markets, politics, tech stocks, past mistakes and many other topics.
Further Buybacks On The Cards
It should come as no surprise that Buffett and Munger are considering further buybacks of Berkshire stock. With a large, and growing, cash pile and limited deal opportunities to date, they are likely to use cash to repurchase Berkshire shares as the fallback option. In fact, the pair used answers to certain questions, such as regarding Brexit in the U.K. to remind the audience that they are very willing to make acquisitions in Europe should they see the right deal at the right price. They feel that Berkshire is typically considered for deals in the U.S.. Yet, internationally they have more work to do to have Berkshire in consideration for a large business sale. Still, the emphasis on buybacks suggests that there is little in the deal pipeline for now, though of course that could change quickly. Buffett and Munger would love to see more attractive deals, but absent attractive opportunities, stock buybacks are the default.
Another Bite Out Of Apple?
Buffett and Munger were both very positive on current holding Apple, and Apple CEO Tim Cook was also at the event. It seemed clear that Buffett was quite willing to up his Apple stake at the right price.
Various objections such as potential regulation of Apple’s app store were raised in questions, though Buffett didn’t dismiss those concerns entirely, he mentioned that what has hurt the most is that the stock has gone up. That, the CEO’s presence and the fact that Buffett didn’t go out of his way to make the detailed bull case on Apple all suggest he make be angling to up his stake at the right price, even though Apple is currently Berkshire’s second largest public holding behind Coca-Cola.
A More Flexible Approach To Value Investing
Over his lifetime, Buffett’s investing approach has evolved and it continues to. In his early years, Buffett loved buying so-called cigar butt stocks, as popularized by his early mentor Ben Graham. This means stocks that may have been poor companies, but were trading well below the value of assets that could be sold realizing a profit for investors. Such deals are harder to come by now. As such Buffett looks more for great businesses at reasonable prices, a direction that Munger has clearly prodded him in. However, now Buffett talks of value investing in broader more creative terms, such that any stock where the likely expected cashflows exceed the price can be attractive, even if not cheap in on the traditional metrics and ratios associated with value investing.
So though Buffett’s approach continued to be refined, its core principles remain the same in looking for great businesses at attractive prices with sound management in place. In reviewing Buffett and Munger’s comments, one is left with the feeling that they are seeing few bargains in this market and buybacks paired with watching and waiting for certain key holdings such as Apple to fall so they might add more is the current strategy. Aside, from the comments at the meeting, the fact that the company is sitting on over $100 billion of cash and short-term securities at the end of 2018 reinforces that Buffett and Munger aren’t seeing the opportunities they would hope for in the current environment.
Articles educational only, not intended as investment advice.
If you want to know the best place to keep up with technology for your business, follow my weekly tech roundups for entrepreneurs each week. You’ll learn because I’m always learning.
So what have I learned? Businesses that invest in the right technologies are assuring future growth and success. I’ve also learned that there are a few apps, services and technologies – about ten categories in all – that are critical for small businesses in 2019. So in honor of National Small Business Week, I thought it would be helpful to share.
Customer Relationship Management
Don’t be fooled by CRM. People like to complicate this stuff and it’s not that complicated. It’s just a database of every person and company who you do business with – from prospects and customers to vendors, suppliers and partners. A great CRM system will integrate with your email and calendars and ensure that nothing falls the cracks and everyone in your company is sharing the right information. It will be mobile, include workflows and automation and integrates with tons of other great apps to do marketing and other functions. If implemented the right way (which is easier said than done) it will be an instrumental asset to your organization. There are many great CRMs for small businesses. I recommend looking at Salesforce.com, Microsoft Dynamics and Zoho CRM.
Managed Service Providers
If your inventory, order entry or other business critical application is older or located on your internal server you need to move it out of your office and into the hands of a managed service provider. Well-managed service providers will ensure that your data is secured as best possible and will likely have better security tools that you have internally. Your applications can be accessed by your team from anywhere and on any device. Many of them rely on public cloud services from Amazon, Google and Microsoft and that’s fine. With internet speeds hitting 5G, a well-managed service provider will deliver the performance, reliability and accessibility of your data at a cost that makes sense. Recommended providers include Right Networks, CloudJumper or any number of information technology firms.
If your accounting application is located on your server, it won’t be for long. That’s because most accounting vendors are moving quickly to the cloud. It makes sense for them, and for you. You pay a monthly fee and they get a revenue stream. In return, the software provider can provide faster support, upgrades and technical services. Cloud applications are also much easier to integrate with each other. Today’s cloud accounting apps provide the added benefit of doing invoicing, cash receipts or retrieving reports from any device, anywhere. It’s a crowded field of cloud accounting options so do your due diligence and lean towards good companies with big communities. I see QuickBooks Online, Xero, and FreshBooks being used often by business owners.
Back in the day, there wasn’t much you could do with a scanned invoice or document other than file it away. But with today’s Optical Character Recognition technology there’s a growing crop of applications that can extract data from any scanned document – from vendor invoices to airline receipts – and put it in a format so that someone in your office can easily review and then import into most popular accounting applications. This saves time, improves accuracy and cuts overhead. Recommended applications: Bill.com,EntryLess, Expensify.
HR platforms are exploding and, in my opinion, any company with more than five employees should have one. Why? Because they’re affordable and with a good HR platform your employees will be able to – usually through a mobile app – track payroll, update forms, schedule vacation, alert for sick days and even manage their performance reviews. The more your employees use the application, the less administrative time will be needed by your office staff – and that means less overhead and more productivity. Check out: Paychex, Gusto and BambooHR.
Back in the day, there were telephone calls, instant messaging, text messaging, emailing and lots and lots of yelling. Yes, we’re still yelling. But the good news is that today’s office applications have brought all those other things together under one umbrella so that your employees can conduct their communication, document management and collaboration activities – including video calls, file storage and sharing, messaging as well as alerting and reminders – from any device and wherever they are. Not only that, but today’s collaboration and communication systems have powerful searching tools to find old conversations and exchanges. The systems can even be configured for outsiders to access too. Applications that focus on collaboration include Microsoft Office 365, Google G-Suite, Box.
Our company, like many small businesses, uses contractors and employees who frequently work out of the office. The thought of maintaining an on-premise phone system seems expensive…because it is. That’s why, for the past ten years, we’ve been using a virtual phone service. Our service provides a toll-free number, dial by name directory, voicemail for all users including transcription and archive recordings and…well, you get it: a total phone system (even hardware) that makes my small business look like a big business. I pay by the mailbox (about $12 per month) and love it. Recommended applications: Grasshopper, VirtualPBX and Ooma.
E-Commerce and Payment
If you’re in retail then please pay attention to this word: convergence. It means getting a point of sale system that not only works in your store but works online too. That’s because you want to sell your products both from your store and over the web because that’s what successful retailers are doing to thrive. The best point of sale systems not only use tablets (a must for good customer service) and integrate with popular payment services, but they also provide the ability of setting up an ecommerce site that relies on the very same database you’re using in-store. Recommended applications: Paypal,Square, Shopify,Magento.
Yeah, yeah, I’m leaving some stuff out. Like email apps (but don’t we all have them by now?) and project management solutions such as Basecamp and Asana.
There was once a time when everyone in my company would be saving multiple versions of multiple documents and spreadsheets on their laptops, desktops and our servers. That…was a mess. But not today. Today, we all save to a cloud storage service which synchronizes the files (that we choose) to our respective devices. Everything is updated and I no longer fear what happens if someone leaves their device on the subway. To me, a business without a cloud storage service is a business that’s losing money. Applications that focus on this space: Dropbox,Microsoft OneDrive, Google Drive.
Ransomware has become a billion-dollar business and that makes sense: it’s finally a way for clever hackers to actually make money with their malware. We read about the stories of hotels, transit systems and city governments brought to their knees by security breaches like this, but we don’t hear of the thousands of small businesses that are also affected. To protect yourself you need to use a good cloud backup service, keep your operating systems updated and use a good security application in your company. Recommended applications: Carbonite (for backup), Malware Bytes,Barracuda.
What else am I missing? You tell me and maybe I can expand this list in a future column. In the meantime, take a moment to review the techs, services and apps you’re using in your business. Have you got all the bases covered?
Author’s Note: I have not been compensated by any of the companies listed above to be mentioned in this article.
Anthony Martin, 36, has created financial freedom for himself that many people can only dream of.
He generates $1 million in annual revenue at Choice Mutual, a one-man insurance agency he founded, by selling a very specialized niche product: final expense insurance. It covers burial expenses, so someone’s family doesn’t have to pay the costs, with a payout that is typically in the range of $10,000 to $30,000.
Six years ago, Martin’s life was very different. Working as a manager at an insurance agency in Roseville, Calif., Martin wished he had more control over how things were done. He eventually realized what he really wanted was to be his own boss. In 2013, he took a leap of faith and started the agency from his home.
Martin is one of a fast-growing cohort of entrepreneurs who are breaking $1 million in non-employer businesses, the government’s term for those that have no full-time employees except the owners.
The number of nonemployer firms that generate $1 million to $2.49 million in revenue rose to 36,161 in 2016, up 1.6 percent from 35,584 in 2015, according to the U.S. Census Bureau. That number is up 35.2% from 26,744 in 2011.
So how did Martin grow his agency to $1 million? Recently, he shared his strategies with me. Many of his approaches are instructive for anyone who is selling a consumer product or service online.
Here’s how he pulled it off.
Focus on an area you already know well. It’s easiest to get a running start in a new business if you have already worked in the same industry. By the time he went into business, Martin had already racked up years of experience selling final expense insurance, so there was no need to get a crash course. It was easy for him to explain his product to customers because of that. “I have a very thorough understanding of all of the options out there,” he says.
Find an efficient way to attract customers. Although Martin knew his product well, he didn’t have experience in marketing, so he sought outside help. He hired a company called SellTermLife.com to build a website for him that would rank well in Google and help him get leads, through a customized marketing plan. He put up the website in June 2016.
Even with expert assistance, it was slow going at first. “It took me six months before I got a single lead from Google,” he says. Nonetheless, Martin kept showing up at his desk every day to build up his website. “You’re really going for a long-term play,” he says.
It took stamina to stay committed during those early months. The battle to get market share wasn’t the only one he was waging. For entrepreneurs, he believes, the real fight is to keep showing up for your business, even when it would be easy to slack off. “The majority of the fighting you’re doing is completely against yourself,” he says.
After Martin got his first lead, his momentum accelerated. Two months after that, he started getting daily leads through his site—and now it brings in many more. “It feeds me a never-ending flow of ready-to-buy customers,” says Martin.
Offer top-quality content. In working on his marketing plan,Martin had learned from the team at SellTermLife.com that it was important to publish high-quality, informative content to attract people to his site. As readers clicked on practical articles he wrote on topics such as state-regulated life insurance, life insurance for 89-year-olds and buying insurance for your parents, the site gradually built a strong organic rank in Google.
Here again, sticking with a niche subject he knew served Martin well. “You cannot find another website that sells this type of insurance that has anywhere near the level of in-depth, accurate information about this product,” says Martin.
Creating robust content took a serious investment of time, given that Martin did not have a writer on retainer. Every day during the week and for five to eight hours on the weekends, he’d create articles that address commonly-asked questions about final expense insurance. The articles attracted people who were already seriously interested in his product and also helped him to “own” certain search-term keywords, including “long-tail” phrases—such as questions customers might type into a search engine.
To figure out which keywords mattered most, Martin researched which ones were most commonly used, relying on tools such as Google’s keyword planner and SEM Rush. He also tapped his own knowledge of the field. “After selling this type of insurance for so long, I know the words people use,” says Martin.
Automate your leads. Martin’s site enables people to “request to apply” for the insurance by filling out a form. By the time a prospect has filled out the form, Martin knows he or she is serious.
To avoid losing track of these leads, Martin set up his site so the leads automatically go to his customer relationship management (CRM) system. Once it feeds him their contact information, he reaches out by phone, prioritizing the newest leads. “The person who has submitted a lead most recently is always the best person to call,” he says.
Thanks to this system, Martin never has to chase anyone down to get them to listen to a sales presentation. “I’m in a really unique situation in the world of selling insurance,” says Martin. “I actually don’t really sell anymore. For all intents and purposes, I’m more of a cashier. I just take orders.”
Embrace remote work. Many insurance agents spend a good part of their day driving to and from appointments with customers. Not Martin.
When customers decide to buy, Martin guides them by phone through a remote application process that the insurance companies have put in place. Sometimes customers sign documents using a program such as DocuSign. Other times, they use a voice signature on the phone.
Working virtually in this way helps Martin make the most of his time every day. “I’ve never met a person face to face to process the deals,” he says. “It’s all done remotely.”
Stay focused. Some of Martin’s contacts have recommended that he sell Medicare supplements or cancer plans. He always says no. “The reason I’m really successful in this space is I have been hyper-focused at being the most expert authority you can imagine on this type of insurance,” says Martin. When he gets an inquiry from someone who wants to buy insurance outside of his niche, he refers the prospect to a trusted industry colleague.
Martin does not look for reciprocal referrals, finding that leads that arrive this way are generally not as inclined to buy as the prospects who come in through his own website. “Right now if I had to choose between serving a customer who has said ‘I’m ready to apply. Please sign me up,” or a referral who has a question, I’m not going to make as much money from a referral,” he says. “That’s why I tell people ‘Don’t refer people to me.’ I allocate my working hours to people who are ready to sign up.”
One thing that helps Martin attract business is having a large number of positive online reviews. He requests reviews from customers automatically using TrustPilot’s automated system.
Keep overhead low Martin started out working from home in Roseville, Calif., but when his website traffic started to increase dramatically in March 2017 and he saw the business’s full growth potential, he realized there would be tax advantages to locating to Nevada, which has no state income tax. Licensing costs were also lower. He rented an office there for $2,500 a month.
Having the space is important because soon, Martin believes, he’ll need to hire other agents. “I have so much web traffic and so many leads that if I want to continue to monetize a lot of what is possible, I will have to hire agents to process those deals as well,” he says.
In the meantime, Martin keeps the rest of his overhead to about $500 a month. That covers his errors & omissions insurance, licensing fees and CRM subscription.
Protect your most precious resource. In a one-person business, where you have no one to back you up, staying healthy is essential.
Although Martin works long hours as he grows his business, he always finds time to work out. Rising at 4:30 a.m. every morning, he goes to a gym where he can do strength training and play basketball. Then he heads home for breakfast and starts making phone calls from his office around 7:30 a.m.
On the weekends, Martin and his wife, Christelle, love to enjoy the outdoors with their German Shepherds, Bear, and his new adopted sibling, eight-week-old Olive. “I could definitely sleep more,” Martin says—but his life is too full of good things at the moment to spend much time hitting the snooze button.
Forbes 30 Under 30 Asia 2019 list honorees (from left to right): Rashmi Kwatra, founder of Sixteenth Street Capital; Richard Yim, cofounder of Demine Robotics; Manuri Gunawardena, founder of HealthMatch; Kenny Wong, COO of igloohome; Hussain Elius, cofounder of Pathao.
For the fourth year in a row, our team at Forbes Asia has been scouting the Asia-Pacific region in search for 300 outstanding individuals to highlight in the annual Forbes 30 Under 30 Asia list.
Across 10 industries, young entrepreneurs and rising stars have been selected from 23 countries and territories to make up this year’s list. Honorees from as far as Mongolia, Kazakhstan, Kyrgyzstan and Laos have landed spots on the list for the first time – making the 2019 list even more inclusive and diverse.
If you think millennials and Gen-Z are just building businesses for the short-term gain, think again. This year, it was particularly interesting to note that many of these innovators are not just driving change in the region – but working towards cementing its positive effect in the long run, especially in developing and emerging markets.
From using technology to better their sectors, to helping SMEs thrive through sustainable options when it comes to food and energy – some have been working on innovative solutions to solve problems while building successful businesses at the same time.
Take 25-year-old Manuri Gunawardena, founder and CEO of HealthMatch for instance. As a medical student at the University of New South, Gunawardena experienced firsthand the difficulty of finding patients to participate in trials for potentially lifesaving treatments. She also noticed there was no convenient way for patients to search for alternative treatments for their conditions. It was then, in early 2017, that she decided to play matchmaker and her startup HealthMatch was born.
Launched in Australia earlier this year, the Sydney-based startup applies machine learning to clinical data to help researchers and pharmaceutical companies find patients suitable for their studies—and vice versa. “We are automating access to clinical trials globally and dramatically improving the future of healthcare by lowering barriers to research and development,” says Gunawardena.
Another 30 Under 30 Asia 2019 list honoree employing technology to solve a problem and potentially save lives is Richard Yim, cofounder of Demine Robotics from Cambodia.
The 25-year-old social entrepreneur started Demine Robotics with the hope that his creation – Jevit, the world’s first remote-controlled robot can lift a landmine out of the ground without detonating it — will help others avoid the fate of his aunt, who died of a landmine explosion over a decade ago when he was growing up in Cambodia.
While the company focuses on Cambodia’s own underground bomb challenge where more than 64,000 casualties have been recorded since 1979, Yim hopes to eventually deploy Jevit to other conflict areas, such as Afghanistan, Colombia and Iraq.
“I truly believe in building a business that will change the world for the better,” he tells Forbes Asia.
Working Towards Sustainability
Other stars on the list have been concerned with issues such as climate change and actively tackling that by introducing alternative ideas and solutions to reduce harmful impact on our planet.
28-year-old chef Anahita Dhondy who runs New Delhi-based Parsi restaurant SodaBottleOpenerWala, promotes the various types of Indian millets, which are nutritious and inexpensive homegrown grains, in dishes in the restaurant and in recipes posted on social media.
Clean energy entrepreneurs also made this year’s 30 Under 30 Asia list. Mongolia’s Orchlon Enkhtsetseg, CEO of Clean Energy Asia, an energy startup, raised $128 million to build its first 50MW wind farm in the country’s Gobi desert while Yashraj Khaitan, founder of solar power startup Gram Power, uses smart grid technology to address the widespread energy shortages in India.
Methodology and judging process
Forbes 30 Under 30 Asia list undergoes a rigorous process to pull together. Starting with over 2000 online nominations, our team researchers, fact-checks and selects an initial shortlist of 500 semi-finalists who then get vetted by a lineup of A-list judges and industry experts. The final 300 get selected afterwards taking into consideration criteria such as demonstration of leadership, impact, potential of success and the embodiment of the entrepreneurial spirit, synonymous with Forbes. Other factors like innovation, disruption – and size and growth of their ventures in some categories – play a role in making the final decision.
This year’s judges includes accomplished and acclaimed entrepreneurs and business leaders such as Hiroshi Mikitani, CEO of Rakuten; JP Gan, Managing Partner at Qiming Venture Partners; Noni Purnomo, President Director of Blue Bird Group Holding; Kaifu Lee, CEO of Sinovation Ventures; Kishore Lulla, Philanthropist and Chairman of Eros International; Changpeng (CZ) Zhao, CEO of Binance; Falguni Nayar, Founder of Nykaa.com ; Patrick Grove, Cofounder and Group CEO of Catcha Group and 30 Under 30 Asia list alumnus, tennis superstar Kei Nishikori.
The birthday cutoff to make the 2019 list was December 31, 1988.
List and Project Editor Rana Wehbe
Reporting and research: Pamela Ambler, Ambika Behal, Elaine Ramirez, Anis Shakirah Mohd Muslimin, James C. Simms II, Yue Wang, Ian Christopher Wong, David Yin
Editorial interns: Lan Yunsi, Tracy Qu, Jisu Song
Photography: Thierry Coulon (Liu Liyuan & Liao Wenlong), K M Asad (Hussain Elius), Abishek Bali (Anahita Dhondy), Hu Ke (Neo Nie), Jing Wei (Rashmi Kwatra, Manuri Gunawardena, Kenny Wang), Antoine Raab (Richard Yim), Winston Gomez (Steven Wongsoredjo), Franco Origlia/Getty Images (Naomi Osaka)