Brian Balfour is the Co-Founder of Viximo Inc and PopSignal. Some of his addictions include business, technology and entrepreneurship. He’s a fresh face in the startup scene and has many accolades that have allowed him to become a valuable asset to the business community right here in Boston.
Richard: Brian, it’s no secret that entrepreneurship is in your blood. Could you tell us a little bit more about some of your past endeavors? What have you learned from these ventures, both good and bad?
Brian: I have had countless projects and lessons learned, but I’ll try to distill it down to some of the most notable
PartyCampus – Simply put, this was a college specific social network before Facebook existed. I started Party Campus in mid 2003 at the University of Michigan when my co-founder and I were just 19. To be frank, we didn’t know what the hell we were doing. We were able to get to 30K users in a month, but in the end we made all the common mistakes. We didn’t have the right mix of co-founders, tried to do too much too early, and made aggressive pivots at the wrong times. Looking back, I gained exponentially more value from this venture than I did in my entire 4 years in college.
Unique Productions – Unique Productions was the second company I started in college and it was geared towards the event entertainment industry. It was a strange divergence from my technology dominated past, but we grew this company to include clients such as Ford, MLB, Chicago Bulls, and CDW. Two years after starting the company, I woke up one morning with a “What am I doing” moment. It was then I realized technology was what I was passionate about and didn’t want to waste another moment. I sold the company 60 days later.
PopSignal – PopSignal was started by myself and Jay Meattle, another Boston entrepreneur, in 2007. We wanted to help bring together entrepreneurs in meaningful ways. We have evolved over the years and today achieve this through a series of small invite only events and dinners. PopSignal has taught me the importance of connecting and helping other entrepreneurs. In many ways we are all on this roller coaster ride together and the more we help each other, the better chances we have of succeeding.
Viximo – This is my most recent, and largest, endeavor of my career. Viximo publishes and distributes top tier social games to some of the largest social networking sites across the web. I could write a series of novels about Viximo, but above all else,Viximo has taught me the importance of having a great team. Viximo has had its fair share of ups and downs. But the only way Viximo survived the downs and has gotten to where it is today is because of the team.
Richard: Whenever an entrepreneur chooses to grow their business they realize they can’t do it all on their own, at some point they must expand their team. How do you find those talented individuals who will help your team grow, mature and succeed, especially during the early stages of a startup?
Brian: 1. Work Backwards – There are a lot of steps in hiring. Finding candidates, interviewing, closing, and retaining. Think of it like a sales funnel. Most people focus on the top of the funnel, finding candidates, by networking, hiring recruiters, crawling LinkedIN, etc. Make sure to focus on the other pieces of the funnel first. A crucial aspect is how your startup works to impact and embrace the potential employee. If you are bad at these pieces, you could have hundreds of candidates pouring in and you won’t convert any.
2. Culture – I think the biggest impact on how well you convert at all stages of the hiring funnel, is your company culture. If you establish a company culture that your team is passionate about, others will naturally want to be a part of it.
3. Sell Your Team, Not Your Product – For most people, the most important thing to them about their job is the people they work with. While it might be tempting for you to talk about how your product and vision are the next big thing, you will have greater success in convincing people to join you if you focus on how awesome your team is to work with. Once again, this is why Culture is so important.
4. Time – Realize hiring takes a lot (and I mean A LOT) of time and energy. There are no shortcuts to hiring an amazing team so be prepared to commit a significant amount of resources during the hiring phase.
5. Early Team Members Are Critical – Your company will be the most moldable at the early stages. This makes your early team members the most critical as they will set a tone for everyone to follow. This includes your co-founders. I was lucky to have Sean Lindsay as an amazing co-founder at Viximo, which made the world of difference in hiring amazing people.
Richard: One of the biggest challenges that most businesses face, is how to effectively monetize and scale their products/services. In your experience, what are the most important objectives and initiatives to monitor in order to establish a truly scalable business?
Brian: This varies dramatically depending on the type of business, but it often comes down to deeply understanding your cost per acquisition (CPA) compared to life time value (LTV) of a user. In the early days your CPA tends to be larger then your LTV. That is fine, as long as you have a reasonable path to decreasing your CPA and/or increasing your LTV. Doing this takes a lot of time and optimization which is why most companies require working capital in order to scale.
Richard: You’ve sat on both sides of the ‘funding’ table. Given your unique perspective, is there any insight you might be able to share with other entrepreneurs looking for funding, from both an entrepreneur and investor point of view? Are there mistakes you keep seeing entrepreneurs make?
Brian: I often see a few common problems:
1. Timing and Type – Many entrepreneurs go after the wrong type of funding at the wrong time. Some try to raise VC when they should be raising Angel and vice versa. You also need to time your fundraising carefully with your story, data, and cash out date. A month too soon or a month too late can make all the difference.
2. Passive – Your chances of raising funding decrease the longer it takes. This means when you are raising capital, you should be going at it full force or not at all.
3. Story vs Data – When fundraising you should design your pitch to focus around a story/vision or data. Never try to split your pitch equally on both. Raising money on a story in the early days, is easier than raising money on small amounts of data. Data can be interpreted in a million different ways and therefore provides endless opportunities for potential investors to poke holes. However, as the company grows and becomes older, later funding rounds will need to be based on data.
Richard: You are very active in the entrepreneurial and startup scene. Do you find Boston to be accommodating to the startups? What are the benefits of establishing your business in Boston? Any disadvantages?
Brian: I think that every city, including SF, has its advantages and disadvantages for entrepreneurs. An entrepreneur just needs to be aware and acknowledge the differences and try to play off of their city’s strengths.
For example, Boston has a lot of traction growing around companies targeting prosumers. Hubspot, Peformable, Scvngr, and even my old company ZoomInfo, are built around attacking markets where there are very expensive outdated solutions, with web products in the hundreds to low thousands of dollars per month. There is a lot of talent and knowledge in Boston for startups with this model.
Boston also has its disadvantages that we shouldn’t try to hide. Boston still remains a tough place to start a consumer oriented startup. Finding knowledgeable product managers and other consumer talent is very difficult. You also won’t find as many people who are willing/able to work on equity-only for a period of time which can make the very early days of any company more difficult.
I’m happy to see other technology communities such as NYC, LA and even international areas such as Singapore and Buenos Aires start to grow. I think the more options and opportunities for entrepreneurs, the better. Overall though, Boston remains a top city for entrepreneurs and I’m proud to be a part of it.
Richard: Are there any trends you are noticing within the technology startup sector that you might be able to share with other entrepreneurs, to help them make better business decisions?
Brian: There is a lot of talk about such things as Mobile, Cloud Computing, and the “App-ification” of everything. This by nature makes them “trends,” and as a result a lot of people are focusing there. Rather than following these trends, I would encourage entrepreneurs to use trends as a way to identify areas that people aren’t paying attention to. There are a lot of unsexy, but very profitable problems to solve out there.
Richard: Customer acquisition is important, especially for startups looking to carve their way to business success. How have you been able to grow and maintain your customers? What do you find works, what doesn’t?
Brian: Customer acquisition is the toughest part of any company. The cost of acquisition on many common channels such as SEM, SEO, and even newer platforms like Facebook Ads has risen to a point that makes it difficult to grow. People who are experts in customer acquisition are one of the toughest finds.
At Viximo, we attacked the customer acquisition challenge with a B2B2C strategy. We partnered with sites that already had larger consumer audiences and provided them a solution to easily add virtual currency and social games to their site. By working with these partners we were able to gain large amounts of end consumers in exchange for a revenue share. Over time as Viximo evolved and established a solid base of users this way, we ventured out into more open platforms where we did more direct user acquisition through viral channels and paid promotion. We were able to leverage the knowledge and resources we had gained from our B2B2C strategy to also become successful in a more B2C strategy.
There is no one solution to customer acquisition. As startups grow, the channels to acquire customers diversify. It is important to experiment with a relentless focus on metrics.
Richard: As someone who’s familiar with the limitations of a boot-strapped startup, how do you handle budgetary restraints? Do limited budgets affect the success of a business. How do you work around this?
Brian: All of the companies I have mentioned above have been funded in some way, at some point. Everything from $50K in Angel to millions in VC funding. Whether you are boot strapping, backed by Angels, or have millions in VC, you will always be constrained by budget, time, and resources. The only solution to this is being excellent at prioritization.
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