Our guest on Octane this week is Angus Davis! Angus is a serial entrepreneur, who spent many years in the Bay Area as an early employee of Netscape and then he co-founded Tellme Networks, which was acquired by Microsoft for ~$800M. As a native of Rhode Island, he is now working on his latest startup (this time based in Providence) called Swipely.
Swipely is a platform that allows consumers to socialize their shopping experience by sharing purchases and recomending places & products to friends. Investors in Swipely include: First Round Capital, Greylock, Index Ventures, Lowercase Capital, SV Angels (Ron Conway), as well as a variety of individuals (local investor - Lee Hower is part of the roster).
VentureFizz: After graduating from high school in Rhode Island, you picked up and moved out to Silicon Valley. What prompted you to make this decision instead of attending college?
Angus Davis: I went out there for a summer job, and met Mike McCue. I pitched him on some product ideas and directions I thought Netscape should take. He offered me a job working for him in the office of the CTO (Marc Andreessen) on the spot. I was thrilled because I planned to go to college so I could get a job at Netscape. In short, it was my dream job. I called my parents. My dad was a lawyer, as was his dad -- no stranger to higher education -- but he was supportive and told me to go for it because he could tell the opportunity gave me a sense of direction that frankly had been lacking up to that point. My mom was supportive too, but she wanted to know if I could take classes at Stanford. I was so busy at Netscape, however, I never had time for after-work classes.
VF: There has been some interesting discussions / debates going on in the blogosphere about completing college. What advice would you give someone on this topic?
AD: My short answer would be, go to college -- there's almost no downside and tons of potential upside. Do as I say, not as a I do :-)
I recently answered a question about this on Quora (http://www.quora.com/Should-a-student-finish-college-or-go-work-for-a-startup-if-given-the-chance-to-work-for-a-YC-TechStars-alumni) and here's what I said there:
"I skipped college to join Netscape when I was 18. I am not sure if it's a path I would recommend to my own children, but I have no regrets and it was one of the most profoundly wonderful experiences of my life (so far!). The opportunity to work alongside great people and learn -- to be "thrown into the deep end of the pool" -- is something I struggle to capture in words. However, the main thing I missed by skipping college to join Netscape University was the social benefit of learning how to get along with roommates, girlfriends, and the like. A lot of what you learn in college is that sort of stuff, so if you skip college, you need to find other ways to learn this stuff."
VF: What was it like working at Netscape during the mid to late 1990's? What lessons did you learn from Marc Andreesen?
AD: Netscape had an awesome team of incredibly gifted people. It was truly an honor to learn from so many amazing people there. Marc inspired me by aiming high and thinking big.
VF: How did you and Mike McCue come up with the idea behind Tellme? How different was the original idea of the company... versus the product which led to the acquisition by Microsoft for ~ $800M?
AD: Ideas tend to change a lot. Today they call it pivoting, but the concept of changing focus to what works is nothing new. As we were thinking about starting a company, we first considered creating a sort of bank to store all your data. We started talking about all the features of a bank, and when we came to the teller, we thought it would be great if you could call someone to get access to all your data -- your news, your sports scores, your email, your stock portfolio, etc. So we shifted from this "bank for your data" concept to focus on accessing the power of the Internet from this ubiquitous device: a telephone. Keep in mind this was before color screens and SMS, let alone iPhones and the like. When we started Tellme, we focused on becoming Yahoo for the phone - a consumer voice portal supported by advertising. It was a classic B2C play. Within 2 years we realized that was not going to work, so we shifted to a B2B play running the voice application network that powers America's busiest toll-free numbers for companies like American Airlines, FedEx and AT&T.
VF: As a second-time founder of a company, what are the top 3 lessons that you have learned along the way?
1. Hire a strong team
2. Target a large market opportunity that's winnable
3. Work hard
VF: What is Swipely?
AD: Swipely is an online service that gives users an easy way to turn their purchases into conversations. We make it easy for people to shop, share and save by adding value to every swipe. Consumers use Swipely to recommend a restaurant, discover a new movie, save money, and have more fun shopping. Businesses can use Swipely to attract new customers, understand customer behavior, and retain their most loyal customers. We're in the early stages, so we're pushing improvements and changes to the service every week.
VF: Why did you decide to build Swipely in Providence, RI instead of the Bay Area?
AD: I always dreamed of having my personal and professional centers of gravity in the same time zone, so I knew that if I was going to start another company, I'd do it on the east coast. I chose Providence over Boston for a few reasons. First, Providence has a high quality of life at affordable cost -- great restaurants, affordable places to live, a great arts scene, world-renowned universities, incredible summer water activities, etc. Second, Providence is highly commutable - 40 minutes from Boston by Amtrak with only 2 stops, a cafe car, and onboard wifi. Third, Brown and RISD are both here in Providence, a great source of talent. Last, as a Rhode Island native, I was compelled to build my next company here out of a sense of wanting to make RI a better place for businesses like ours. So it really boils down to a better quality of life for our employees, a manageable commute for those who choose to stay in Boston, a ready source of highly qualified entry-level talent, and a personal conviction to improve the state I love.
VF: What are the major differences in terms of building a business as compared to the days of Netscape and Tellme?
AD: It's cheaper to start Internet companies today. Here are 3 reasons. First, you can rent the network from Amazon EC2 instead of buying it, eliminating millions of dollars in capital expense for computer hardware. Second, you can leverage existing free open source software for a lot of what you need to get started, dramatically lowering costs of software development. Finally, new means of distributing software like Google Adwords, the Apple App Store and Facebook Platform have slashed the costs of acquiring customers. The combination of all three - cheaper hardware, cheaper software, cheaper customer acquisition - is why companies today can start for a fraction of the capital required to start businesses 10 years ago.
VF: What professional accomplishments are you the most proud of?
AD: Building the team at Tellme and leading the product strategy that enabled us to grow into a successful company has been my greatest professional achievement thus far. They say lightning doesn't strike twice, but I sure hope to recreate that success here at Swipely on a different coast in a bigger market with an equally impressive founding team.
Outside of business, I'm proud of the effort I led to hire Deborah Gist as Rhode Island's commissioner of education.
VF: What advice would you give first time entrepreneurs raising funding?
AD: For first-time entrepreneurs, I would suggest matching the needs and likely outcomes of the company with the right investor. Building a small business doesn't always mean building a "venture-scale" business, and as such, traditional venture capitalists are not always the most appropriate sources of funding. Pursuing funding from individual angels is often a good place to start. Younger entrepreneurs may want to consider a startup accelerator program like Y Combinator, Techstars or Betaspring. Steer clear of "business plan competitions" and be wary of angel groups long on meetings and lunches but short on decisions and a track record of investment activity. If you have a venture scale idea, probably the best thing to do is go to the next First Round Capital "office hours" or attempt to get a meeting with one of their principals. They are the best professional seed stage venture firm in the U.S.
VF: If you weren't focused on building Swipely, what are some other underserved markets or emerging technologies where you could build a business?
AD: There are many. One trend that fascinates me is renting. Companies like Rent the Runway rent dresses; Bag Borrow and Steal rent handbags; Exclusive Resorts rents luxury homes. This market seems ripe for opportunity - who will rent jewelry? Sunglasses? Men's suits? Ties? Another trend that's interesting is the creation of niche service peer-to-peer marketplaces that disrupt an inefficient existing market. For example, Ubercab has created a consumer-to-driver marketplace for luxury taxi service that cuts out the traditional dispatcher as the middleman while improving quality of service. Similarly, AirBnB has enabled anyone with a spare bedroom to operate a hotel. Who will do this for car rental (rent my spare car) or heavy equipment (rent unused bobcat from local contractor)?
VF: Can you share some information about your involvement with the RI Board of Regents? How did you get involved?
AD: I joined the Board of Regents in 2007. It is the chief policy-setting body for K-12 education in Rhode Island. I was appointed after expressing both my interest in education reform as an economic development imperative, and my outrage with Rhode Island's achievement gap that is an ongoing civil rights injustice of massive proportion. Since joining the board, I worked with other committed education reformers to pass an ambitious expansion of the state's charter school law, ending the ban on new schools. I introduced and passed new regulations to welcome alternative certification programs like Teach for America to our state, and I co-chaired our search committee to recruit Deborah Gist, a nationally recognized leader, to become Rhode Island's next Commissioner of Education, the first change in leadership in 17 years. Earlier this year, Time Magazine named her one of the 100 most influential leaders in the world. We have a lot of work ahead; our ambition is to give Rhode Island children and their parents the best public schools in the nation as measured objectively by student achievement.