Gadgetory

welcome to season two of small empires in Atlanta haha we can edit this I'm Alexis Ohanian start-up founder and Y Combinator partner over the last year I went on a two hundred event book tour and met people building small empires all across North America now I'm back with a new season revisiting some of my favorite stocks from the tour a new startup has three basic choices to get funded if you have the cash on hand and can create a profitable business bootstrapping is one option bank loans are another popular method but they require interest payments that can drain your resources it's the third option popular in the tech sector is taking venture capital with venture capital the startup doesn't pay interest but it exchanges a portion of its company's stock and return for the cash part pick a visual learning startup from Atlanta is looking to raise its first round of funding known in the business as a seed round it will have to court investors and sell them on its potential for explosive growth because the early-stage venture business is based on returning ten times what is invested we're here in Midtown Atlanta just across the street from Georgia Tech and the techs where I'm very excited because we're gonna be visiting a start-up in a co-working space that's part of an old hotel called the Biltmore now this is an awesome startup called part pick which is at a really pivotal moment that most people never get to see they're right in the middle of raising their seed round of funding so I was working at a big industrial distributor and I was doing sales management there really shortly into my time kind of working there I got very frustrated because I had to filled all of the angry phone calls from customers who we'd sent the wrong parts out to so let's just say you need to fix something my vacuum cleaning robot a machine that makes my vacuum cleaning robot yes the machine that makes your vacuum finesse let's say you need to fix that it's gross it is broken it's down yeah you need to find a replacement part for it yes so you call mcmaster-carr you wouldn't have a part number because typically things that are coming off machines don't have anything on them or it's been rubbed off maybe older so you'd have to say oh it's silver it's kind of round the people on my team would do their best try to help you so they would ask you certain questions try to figure out what category you might be in they use this catalog I saw this on stage you're holding this dead tree mass look like a phone book yeah and they literally use it to find it and this is 2014 yes and so you know I started thinking about okay this isn't gonna work for me like I'm not gonna be able to survive it so I have to come up with something to make this better part pick is visual search for replacement parts and we are changing the way the industrial distribution market sells parts so we're talking about physical like like widgets like my widget is broken I need a new one I don't know what it is I'm holding it here and this is way to instantly would take a photo of it and find out what it is what it is and where to get it yes so how did you get the next pieces in motion you're like across literally right now or across the street from Georgia tag yeah so I really just started hanging out there I was studying for the GMAT and I had a friend who went there and just led me into the library but then I started seeing these posters around campus for different clubs like if you're interested come by different speakers things like that and so I started to go to those and talk a little bit about this idea I have and just enough to get introduced to people who are in computer vision machine learning those departments one introduction after another leads to me meeting my technical team how did jewelry buin to this it was actually very easy Julia not work together when we were at Google we worked on a side hustle a 20% project as they call it and we were extremely successful we won business awards from Google because of the work that we did and you know Joe is one of my best friends now and it's really easy to work with her and so when she had this idea we sat down we talked it through and it wasn't long before we said that we're just gonna solve this problem alright let's see this in action awesome this is a thing that the technical how will I will give you 50 bucks if you were to tell me what that I oh okay all right it's some kind of a button I don't know what it what is it I guess well last part pick let's find out so navigate to the apartment home screen tap on the icon get a nice focused picture confronting the photo so now it's uploading into our database and you see it's searching and within a few seconds right now we're working at five to ten seconds now of course a toto tank lever there's on the tip of my tongue the classic th five 5 1989 337 I thought it was a three three six I got you which it's a typical mistake and we allow you to search stores around you we've partnered with national NGO to supply so they're the first election you choose it I mean it takes you directly to their website then you can purchase it directly from the site when this technology is you as an enterprise model it sends the correct part and other similar parts to that sales rep for them to confirm the purchase and place in the correct order roughly how long ago did you guys like really get started so we really got started um coming actually coming out of an accelerator right up in New York yeah so we did NYC seed start and so over the last year since the accelerator we've really just been kind of under the radar somewhat we I've done a few competitions to kind of get some money to keep us going but just really been focused on solving the core problem there's just so much work that has to be done over the past year with the technology to get us to a point where we can actually implement with our first customer well you've been running for the last year based pretty much entirely off the funding you got from that accelerator and then prizes here and there well we actually also got about 100k from two family friends okay and then I've taken on jobs done different things along the way to put more money into this sure but no one's really getting a salary no one's giving me a salary um consistently so so yeah we've kind of had to do what we had to do to keep it going so how's further ado the winner of 2014 TechCrunch Disrupt Enterprise disruptor category from Accenture open innovation is Mark pick you all had that great outing at TechCrunch and TechCrunch Disrupt was here first was that your first trip to the valley with the company yeah it was it was our introduction it's a little like I was really really nervous going into TechCrunch I didn't know how he would be received we're coming as a team that looks quite different than most of the teams people that are attending TechCrunch have probably seen before so that's one thing and then coming with a solution for an industry that most people haven't even thought to come up with the solution everyone everyone's trying to make the next step for sharing cat photos there you go so they're not really thinking about repair so you know I really did not have any clue how we're going to be received but it turned out amazing I think it's very clear when people start a company from personal frustration because you can describe the problem and your solution very very clearly that's very nice that we got so much support and people were just rooting for us and saying you guys did great I love what you're working on you know how could we help so it's been pretty cool so I stayed out in California about a week after TechCrunch to take meetings so we were able to secure probably about 15 meetings while we were out there fundraising is such a waste of time right meeting with investors is not doing the most important thing for your business that's actually running your business but it's a kind of necessary evil and it can feel like Groundhog Day because you're answering the same questions over and over again saying the same things over and over again but you have to do with the same energy and conviction every time because the investor needs to believe in you and founders are going to hear no more often than yes but it could be a matter of tens of meetings with angel investors or I've seen as many as over a hundred before a round gets done we're in a nondescript office Park about 20 minutes outside of Atlanta where is it a national builder supply which is going to be the first pilot customer of part pick and I hear there are a lot of toilets inside every toilet should have a remote control Wow nice warehouse this is it this home this Kevin not a Kenneth I probably talked to Kevin warden on top of my why were you guys back in kindergarten we all scheming this whole empire yeah I would have schemed a different time I'm very familiar with Toto toilets I've got a couple very big fan ten years ago we would literally drive down to the factory and if somebody bought one online we would go pick it up and then drive it back in my Toyota Tundra and put it on a pallet or put it in a box and ship it out I mean it was a definition of just in time so a few toilets and your Toyota Tundra has become all of this right our business traditionally was much easier because people would type in brand names they recognized Grohe hansgrohe American Standard and they would type in the suite the toto Drake and you could take them from this manufacturer suite species relationship and introduce them to a result set had context what they were looking for now that we're expanding our product line into industrial supplies and rough plumbing the search terms are much more ambiguous - not branded at all sir I hope something's to give the house I just let's pretend I'm handy and I tried trying to fix this myself sure so this is broken it is a copper macaroni yes at the time yeah they call it a copper 90 but if my mom would not call that a copper 90 the not on generally called a copper matter right for Emily so that's what's changed the game for us we have to figure out how to take these physical attributes and put them into some type of schema or hierarchy dad our web catalog will understand Amma's where Parker that's where harp it comes in clearly I mean it seems like something software or technology should be good at solving how did you get involved with a part Pig with ten years of search term analysis under my belt I knew that it was going to be a right and knew that current technologies within text analysis just weren't going to work met Jule at Georgia Tech she showed up at one of the events that we were talking about e-commerce and digital marketing just like hey I used to work at mcmaster-carr I had this idea whenever else in the call center I was like look that's exactly what our situation is and so whenever Jule said hey if I have an image I could figure out how to model it I was like well I have the products and I have the search terms and I can introduce those to the person that is looking for an item if you could help service that translation layer and if Jules willing to step out we're going to give her the broom to let the market decide of what she's building has utility to know this is officially fundraising load this is yes voila we going to different cities I actually spent a couple days in DC and then went up to New York and just got back from New York we've had a few follow-up meetings with some firms that were really hoping you know invest we've had a few commitments for folks who want to join but just don't want to Leith around wishes those are the worst you know that is a real talk all right those are investors who lack conviction I can use another word but I it's it's so incredibly frustrating as a founder yeah because it's like if you believe in me now what should it matter you should need to wait this is the end it's the classic instead of the same investors who are like I am not a heard investor no I don't I you know but they it's it's infuriating as a founder anybody who knows the visual recognition industry this is a truly difficult problem to solve this this won't be solved with one hundred and thirty thousand dollars from friends and family around this issue takes true investment where's the biggest push back up yeah so um I'd say the most common thing I've heard is we like to see paying customers but even to get started with a large corporation like the ones who are coming to us requires a team that's being paid it requires a lot so that's the that's the message I'm trying to get across to investors it's just like when these large companies come on board um we have to be able to support what they're asking for and with me here and other people in different places it's it's kind of impossible to be able to say okay Home Depot we can have this huge operation ready to serve you you don't mean another thing is just location we are headquartered out of Atlanta we're proud to call it a linter home but when we talk with investors we oftentimes get the question are you are you going to be headquarter in Atlanta or will you move out to Silicon Valley the idea that a start-up needs to be close to an angel investor is kind of ridiculous right a start-up needs to be wherever it will be most successful its smothering to think of an investor who wants to be really close to you in order to have weekly meetings now that I know right i mean most investors actually think that they are smarter and more helpful than they actually are you're in manufacturing and you're doing a lot of sales with manufacturing companies that right now aren't scaling because you have to do the mini need space be close to those manufacturing companies there is a huge a major world-class tech university a bunch of actually great schools in the area a city with massive massive companies right there are wealthy people here there are investors here what's it like trying to fundraise here in Atlanta it's hard it's hard and you know ideally we'd be able to be based in Atlanta be funded at Lana um use Atlanta resources you know because most of our team is actually from Atlanta we have a lot of ties to the city and so that would mean a lot to us if we were able to Malena be based in atlanta all that great stuff but it's just not really the way it's worked out because it went ahead seen successes in certain industry so like information security email marketing so like part of what I'm seeing is that investors will invest if you're having information security startup but for something like us is a little bit yeah why haven't you relocated the company that's a question that we get all the time that we've been getting over the last couple weeks since TechCrunch is why are you based in Atlanta why do you have loyalty to Atlanta and it seems like Atlanta isn't being as loyal to you um and that's a great question honestly you know yeah that's a that's a it's a hard one industrial distribution really centers out of you know the South the Midwest a bit in the East Coast so we have access to our clients Home Depot is is headquartered in Atlanta Delta is headquartered in Atlanta and our first client our first pilot customer is headquartered in Atlanta and there's a number of others that we've been in conversations with over the past few weeks that have offices or innovation labs in Atlanta we've already started to generate a good strong pipeline of talent from Georgia Tech Georgia Tech is arguably the best signal processing engineering school in the world and we've been able to secure a top talent from Georgia Tech and we would like to continue you know investigating you know what that relationship could look like as we continue to recruit and build out our team so Silicon Valley investors what are they risk by sleeping on secondary markets like in Lana you go into an investor meeting and it's one of the first things they love to say is that we don't invest in the product we don't invest in the technology we invest in the people and you know and and we're really we're looking for smart people smart people live everywhere you know smart people don't just live in Silicon Valley smart people don't just live in New York but smart people live everywhere and hungry people live everywhere so if you're really truly dedicated to the the value of a person into that talent then you should look elsewhere and find ways of bringing out that hunger and that entrepreneurial spirit in places where there's not a big tech community in our own very small way we're just mimicking the model that that was established 20 years ago whenever we test part pick quickly get it out there see what works it works float it to the top help tell other people that it's working get the resource investments both human resource and capital resource involved to let it rise to the top and then be a reference point a testimonial to make it easier to sell to the next guy that system everyone is on board with this right now I honestly I do not sleep much and people say that like oh I'm grinding and I'm not sleeping no really I I'm holding down a lot training hours you sleep gonna die it's hard for me to sleep even if I if I okay I've accomplished all the tasks I need you for today it keeps I keep it's just like impossible to rest well it's hard because I feel pressure because it's like this is my big vision and I really want to see it come to life but now that I've brought other people on to and this is now our big vision and everyone wants to see it come to light and it's not just me I feel obligated to my family little brothers for example they think that to be successful they have to become really good at sports or they want to become a doctor because that's success but they don't see actually how does it look to go from oh I just came up with this idea and now we have hired a hundred people and now a hundred people can feed their families as their big sister I want to be the person who can be kind of that role model for them there is something a little unconventional about starting the company and especially the role model that you can play not just for your siblings but frankly for a lot of people right because you said earlier you don't look like a lot of the people on stage at TechCrunch Disrupt yeah why is that important you I feel that I'm up for the challenge I can just see it I can see it which i think is kind of half the battle envisioning like this actually can be a billion dollar company I can see then we're just at that edge we're just almost there and we just have to keep going I feel like there's a million people that think I can't and I've heard probably hundreds of them say it to my face really yeah but for every person that has something discouraging to say there are literally a million people that if I do make it um that can be a role model too and that to me is motivation and there are four little boys that look just like me who I really really want to show at the end of the day it seems like this is the everything is here everything is in place all the basics that investors should be looking for are there right how does it I mean what what is I don't know what is the thing that drives you what is the thing that keeps you pushing forward and it makes it so clear to me that you're never gonna stop I just really believe in what we're doing and what it can be I just feel like I haven't done everything yet I haven't done everything that I can do have more things that I can pull out of my bag you know I can take out loans there's just there's more that can be done and I believe in it so much that I will keep pressing until I don't know what's the breaking point I don't think I'm not sure but there's experiments I want to run like sometimes to be honest I feel like maybe it's me maybe it's like the way I come off to people work maybe my conviction is a little strong for folks so I'm thinking well maybe I should attain to someone else to pitch it or to go into meetings with this is this is not too far down on my list of potential things and see how it goes with it well I know you're not quitting anytime soon jewel and I'm looking forward to saying 10 years from now at the Nasdaq launch of the IPO yeah I met her way back when that'd be cool for all the technology has done to lower the barriers of entry to starting a company there are still societal and structural barriers that potentially stop us from benefiting from the ideas and the talents of some of the best founders fortunately for all of us there are founders like Jules we will stop at nothing in order to see their businesses become successful and she will no doubt inspire many more founders just like her to take up the charge become entrepreneurs and look after spending some time with her and being here in Atlanta I certainly would not against jewel and for that matter I wouldn't bet against Atlanta either heart kicks certainly isn't the first company to help customers replace broken or missing carts but by taking advantage of our mobile world Harvick is poised to stand out amongst the competition by using mobile solutions small businesses can level the playing field with larger competition one of the biggest steps is to build a mobile-friendly site stick with a simple layout and avoid excess images that slow load times another great way to connect with customers on the go is to send text reminders of sales or appointments utilizing apps like Foursquare is a great way to promote your business and offer special discounts to customers who check-in at your store and if you're looking to really take advantage of your mobile opportunity build a mobile app which can help you deepen relationships with your customers and mobilize the way you do business for more business advice visit the AT&T business circle Oh hallelujah