Sept. 6, 2020

How to extend your runway to a maximum and still scale? Troy Bolus about Seated.

How to extend your runway to a maximum and still scale? Troy Bolus about Seated.

Troy Bolus, Co-Founder at OmniPanel and the Co-Founder at Seated that was acquired in 2019 talks about his journey to the acquisition, raising funding for his first company while being a student at UCLA and about extending that runway. Troy also gave his advice to student entrepreneurs and explained the reasons to risk.

OmniPanel that will help you understand your users' feedback better: https://www.omnipanel.io/

Acquisition story for $985 million by eBay: https://www.fundraisingradio.com/Greg-Shepard/

 


Transcript

And today's a guest speaker, we have Troy ball is currently the CO founder and only panel and also the CO founder and head of product at seated race thirty million dollars was acquired in early, two thousand nineteen. 

And Lisa will talk about the fundraising process of seated. 

And troy's current experience at only pal, and also we will touch onto dropping out of the university because that happens Troy, and he will talk about that on this episode as well. 

So, let's kick off by you giving us some better on herself and on seated. Yeah. Awesome. Happy to be here. Back on myself. 

You know, started this company with my brother and a couple of his friends back in Boston and then later to New York. I left for two years to kinda get everything off the ground and up to going. 

My main responsibilities were on the product side of things, managing the engineering team growth, marketing sort of stuff. I mean, at an early stage startup, everybody's doing doing a little bit of everything, but yeah, definitely. More on the ground tactical type of stuff. 

Right? So, what did let's start with the basic what did see to do? Yeah. So, seated was a restaurant rewards app from the East Coast. 

So, every place that you would book on our platform, you, as a diner would get, you know, ten to fifty dollars of Amazon lift or Starbucks credit. 

so it's a really good way for restaurants to drive additional traffic to their restaurants and vendors to get a nice little sleep bonus for dining out 

Everybody had a lot of responsibility in the early days, right to the best part of the setup I guess so one thing I specifically wanted to talk to you about, is this found a new company with your brother. 

I've personally had have gone through this experience, and couple of investors, we've tried to talk about raising money for our company. They were like, oh, you know, your with your sibling does not. That's not cool. Basically. They didn't like it. 

Your experience was that and the issue for may investors or do you manage to present as some sort of a yeah, I mean, that's interesting that you have that experience because we're are we never really heard of that, you know. 

Only work together and the good times when things get tough, have those conversations and then your company fails. So. 

And just play and living, they all blended together. So it'd be, we're just constantly getting tremendous sort of output. So that's why it was really good when I did move out there. Yeah. So, that that was just kind of the main decision, be like, hey, there's an opportunity here. 

Like, you can always go back to school. It's I only had, you know, like six months of school left. When I did in the plan was always to try and go back. So, yeah, it ended up working out. 

I wouldn't recommend pretty much anybody to fully drop out and never go back and get their degree just because, I mean, I don't think you learn anything in college for the most part. But unfortunately, we can't really get a job without. 

You kinda have to play by the rules. Unfortunately. Right. That's actually true. I've heard one really sad story about the founder, you know, who's spent, I think, five years working on a startup, and it didn't work out somehow. 
So we went bankrupt and then when he started looking for an actual job pays bills, he realized,
that was pretty much everything in every field,
but not enough to find a real well paying job and yeah, 

that's the problem on which so that's that's perfect advice. 

You know, if you want to have a safety net to teachers, don't wake up every night and cold sweat. So, for a lot of people, it doesn't need to be a binary decision, or, like, drop out drop out. Like, I did both for a long sort of time. It was really hard. 

You know, I was waking up to do. 

Calls with our development team, and then calls late at night with the East Coast team and, like, school and all that. But at least I was still making progress towards that degree. 

So, I would say do that for as long as you can, you know, basically just keep going until it doesn't make sense anymore. And then, once you're at that point, decide, okay, is this start going somewhere? 

And you can only go back to school, but I can stay in as long as possible and just work a little bit harder, manage your time a bit better to get as much progress as you can on school and the startup. Alright. 

So eighty five percent centers are twenty five years old and older, but the rest of them are mostly college students. 

So, 

for those college students, 

one of the questions I've heard, 

at least, 

a couple of times is, 

you know, 

should I tell my investors will drop out of college immediately once the once I raise their money or should I say that I'll keep pursuing my degree? 

At least part time so question is do have to promise your investors that you will be like, hundred hundred percent time commute on that project. 

Yeah, I mean, honestly most good investors or so won't even really ask a question like that in my mind. 

Because if things are going, so well, right, every single day, right everybody's trying to make the best decision for them for their future a short term, long term. Whatever it is. So, if you've been in college and you've been able to start a company. 

And you're growing, and you have an investor that's willing to write, you know, a two million dollar check or whatever it is. Honestly, you'd be kind of dumb not to take it at that point. 
So, if the investor, like, I wouldn't even kind of worry about that stuff too much, I would just focus on trying to get started as quickly as possible hustle around and while you're in college, you don't really have much to lose if your business. 

No, one cares. Right. You're like, twenty one at the time. Like, you're supposed to fail it like, literally doesn't matter at all. Let's see. Yeah. I wouldn't even kind of get the conversation started on that route. You're putting the cart before the horse. 

They're just, you know, you're in such a unique environment. Well, I don't know about these days, but hopefully, when corona is done, you know, you're in that unique environment with so many young, like minded people and honestly have more time than you'll ever know what to do with because classes. 

Unless you're doing, like, a hard engineering major, just, like, really aren't that hard or time consuming to use that time wisely and just try and build something and then take it one day at a time. You don't need to go in with all these massive grand plan. So, it's gonna change anyway. No matter. 

No matter what happens. It's, everything's gonna change so take a day by day. 

Right, right I would say my trigonometry class would disagree with your statement that they don't take much time. Yeah, generally that's true. 

And you, as a college student, you just have to fail a couple of times, I think, because you just learn so much there, but let's go back and talk a little bit more about the fundraising. I'll see that. 

So now, looking back at that process, would you change anything at all? Like, would you change last? I mean, will you raise more money in the beginning, or on the contrary less money into being and more into work? Would there be something you would like to change? 

Yeah, so, I mean, my main role wasn't really on the fundraising side so I kind of have an outside sort of perspective from that. I was more on the option the day to day actually running the business. 

But regarding the fundraising and stuff, I think one of the mistakes that we had made is, like, we had, like, two to three months of runway for, like, two years straight. 

And that's just, like, incredibly emotionally taxing, because we couldn't make real proper plans and do all this. 

I mean, we were living in the ultimate sense paycheck to paycheck and, like, literally, every month be like, okay, if this doesn't work, we either can't get more money or sell enough stuff to make enough money. Then everybody goes home and we're out of business. 

So, that part was very difficult on the other hand. It like, for sure. Made a stronger and. You know,
mentally there,
if we for the next company that I'm starting now, 

when we go out and raise and raise a prop around,
like,
feel like paradise,
just because we've lived with the ultimate constraint there but ultimately, 
that made us a stronger business in terms of like, 
the principles and whatnot and knowing how to be scrappy, 

how to be resilient, 

but it's very hard to build a legit business that way because you can't really hire anybody. 

You can't make plans any experiments we're gonna run it's gonna take time to show. So, yeah, it's what we did very, very tough way to do it wouldn't recommend that at all. 

So, in terms of the amount of money you should raise, what's your recommendation to those early stage founders? Should they try doing enough money to last for like, at least twelve months? 

Yeah, I mean, it all of this depends on, you know, where you are in the world who your connections are in the world. How much your business costs to start. 

And everybody kind of has a different skill set. 

If you're one of those individuals who comes from Silicon Valley and has all the connections there, 

then you would be dumb to not raise, 

you know, 

two, 

three, 

four million dollars from a proper investor from a different country, 

or whatever you're probably not going to have those opportunities so your whole playbook and rules need to change based on your circumstances. 

So, maybe in that sense, if you come from a different sort of country, you know, you have, you're just kinda hustling, trying to survive every little day by day and build brick by brick. 

So, it really depends on where you are not every company is gonna be a venture backed companies. It's for a relatively small set of companies that fit certain parameters that can get to massive scale. 

But, you know, there's a lot of business opportunities out there that don't really require that much outside capital to do. And honestly, most people would be happier, kind of running those sorts of business. 

I mean, when you raise money that investors expecting to ten X, one hundred X, thousand X, their money, which is a H*** of a lot of pressure on you. So. 

When you take that check from somebody like things, things just got really real, you have responsibility to them to deliver. Right right. 

And here, it was talking about those founders who can really raise those big sufficient round to VC funding and let's talk about this, you know, dollars trashing strategies that you specifically used at see that, especially in the early days. 

How exactly did you manage to extend that runway as long as possible without really losing much firepower, I guess. 
Yeah, so what we kind of focused on was, we were kind of running a consulting business on the side of things in the early days, we would build tech products for other people. 

I would do designs for people like build app side. Right? Product specs. 

Do QA testing for everyone that's just that's an easy way to kinda make a little money and make sure that, you know, I can eat and put food on table and all that extra money back into the main companies. 

Because, you know, we're just trying to buy ourselves time to make things out test various things. 

So, it's basically, like, having a second sort of job there, which is what a lot of people do, like average people normally, you know, if you want to start a clothing line, or just look at, like any actor or actress in LA. 

They're all, you know, waiting tables, working as bartender or various front desk, just doing whatever they can to make a little extra money to keep working towards the larger dream and the larger goal. And that's just kind of the mentality that you have to have. 

Now, it's certainly not the most ideal way, because your brain is fried, you're working sixteen, eighteen hour days and, you know, it's hard to shift gears like that. But if that's your only option, then, you know, that's what you have to do or, you know, you don't have to start a company. There's a lot of ways. 

There's a lot of ways to make it more, you know, just not only one. So, it's really just about figuring out where you are in the world. What's your skill? Sets are what you like to do and see what makes sense. 

But I'm just trying to apply blanket advice just because it worked for somebody else. You know, it's it's always tough to say, you never know the real story just just hearing it. Absolutely, absolutely. And let's move onto more current events. 

So, as an exit founder, do you do some mentorship of other founders, our other early stage startup founders? Or do you do any angel investing? 

I'm not really big on the angel investing side of things, because I'd rather bet on myself at this point I'm still young and have a couple more shots left in me and the energy to do it in terms of mentorship. 

If I don't know if anybody thinks, I have anything useful to say more than happy to do calls with them, but can help who really knows their layout right now just kinda heads down and starting our next company after taking a break for the last year. 

So, nice nice. And, you know, if I run into someone who needs a mentor, I'll definitely connected to but let's talk about the current company. So, what does Omni prove the Pro to? It's on the panel. 

Yeah, so basically, this company was kind of the whole idea kinda came from what we had learned at the previous company. 

So, again, because I ran product and my brother who's the other founder ran like, you know, a lot of the customer experience, and delighting our users. 

We worked super close together all the time and what that end up looking, like, was us reading and combing through like, thousands and thousands of customer support tickets. Right? 

Because we have people reporting different bugs in the app, then set telling us what restaurants to put on there, given the feature ideas at every user problem in, like, anytime anybody reaches out to customer support. 
That's like a massive opportunity for the company to take that. And incorporate that feedback and 
information into their product. So we only did this process because we were the founders and really care obviously cared more than anyone. 

So we're willing to do the working comb through thousands of tickets. But for most companies, they don't have the resources to really do that and read that manually. So we're building software to make that entire process a lot easier to customer support tickets. 

There's a gold, mine of information in there and companies need to be incorporating that to build better products, build stickier products, retain their users more reduce churn. There's so many opportunities. That's extra. Great. 

Yeah, I personally had. 

I mean, okay, personally I didn't have such an issue because I never had a business with over ten users, but I know a lot of founders who didn't have that problem. So that's awesome that you're hoping it and definitely. Keep me update on the progress there. 

But let's talk a little bit more about fundraising and specifically how do you plan to approach how many panels fundraising taking into account your experience that you got added seated? Yeah. 

So, again, we're, we're still trying to decide what to do on the fundraising side of things. You know, a lot of different routes for us to take it and we'll, we'll just really see what makes the most sense. 

You know, we certainly have the advantage now, given the fact that we have an exit name and hopefully somebody recognizes what we built. But, you know, it's at the end of the day, like, Nothing's gonna really stop us from building this company. 

Now, the sad thing about always, just waiting for somebody else's money is like, you're asking permission basically, to start your company. Right. I'm so confident that this is gonna work. The initial reception that we've had from our early customers has been phenomenal. 

So, you know, if it makes sense for us to raise, we'll do that. If it doesn't, then we want to knows. We'll just kind of play it by ear and see what happens. That's the really startup way of approaching things to love it and best of luck to you. 

And let's talk a little more about covet specifically. So you mentioned that, you know, Nothing's gonna stop you from opening up the company. What do you think about other founders whose project might be kind of related to their colleagues situation? 

So someone who is actually stopped by this Kobe situation, what's your advice about what's difficult previous company is definitely affected by it? 

Because they're in the restaurant space, I mean, sometimes it's, it's really difficult to say some for some businesses they're certainly not gonna survive through this period. 

If, you know, you're in hair salon or any of that personal software events it's live sports live news. It gets it's really challenging out there, you know, I don't it's, it's tough to say what to necessarily do again. 

You just kind of need to take it and maybe it makes sense to hold the business and roll into something else for those people, though, who haven't necessarily start their businesses yet. 

Obviously, you kinda wanna look at these emerging trends that are coming on, whether it's remote work, or doing things digitally now is probably still the best time to be in that tech space because it does enable remote communication and remote work. 
So, if there's a lot of new opportunities and new domains that people can take advantage of. 
But, yeah, I mean, if you're a form, a restaurant or your restaurant owner, it's difficult, try and pivot to take out or whatever you kinda can. And you can see what will be there, but. 

It's it's very tough. I, I wish I had more more things to say facilities Super tough and personally, even, I can say anything can go in this field for quite some time. 

I've heard a lot of advice from other people, and even I cannot aggregate into something. That makes sense. 

Probably one thing I can say is, you know, hibernate, try to minimize your expenses focused on the tech side, focus on surviving focus on the trends that are appearing with delivery with remote work with staying separate. 

But, I mean, expect that this is gonna go on for the foreseeable future, because exactly. It's never Nothing's changed for awhile. So, and definitely focus. 

I mean, not focus, but, you know, try to find some newsletters from people who are sharing grand opportunities. Because there are a lot of those people especially now. And one of those organizations is small business administration. I was just extremely helpful. 

And it's only working for people who are in the United States my year being folders. Sorry? But, yeah. Basically just tried to find there was free sources of money basically. And here we're moving on to the last question. 

If this app is a, which is a call to action so what's the one thing you want to lose her to do? As soon as the episode is over. 

I think the main thing is just reflect on, you know, 

you as a person evaluate what you're good at what you're smart that what you're not so smart at what connections you have what just your whole, 

you know,
kind of break yourself down until a video game character,
if you will rank the various strengths and weaknesses,
see what you're good at and see what you're not so good at and then play to those strengths. I think the worst thing that people try to do is they see.