on the "Scrappy Little Startup"

Last week, my students and I were fortunate to spend a couple hours with serial entrepreneurs, Sean Callahan and Rodney Rumford. These two co-founded Tweetphoto.com, a real-time photo sharing site that is integrated into the rapidly-expanding social media landscape.

Just this past week, Tweetphoto celebrated its one year birthday. In that time, Tweetphoto has reached 16 million users per month and is now recognized as one of the top 250 websites in the U.S. Not bad for a baby, wouldn't you say?

Originally created as a photo sharing site specifically catering to Twitter users, Tweetphoto's popularity and open API have prompted integration across many social media platforms including Facebook, MySpace, Foursquare, and LinkedIn.

As they've keenly discovered, photo sharing is giving way to media sharing thus prompting a move toward integration of multiple media choices across multiple social media platforms. So, too, will be a move away from the name Tweetphoto to something more reflective of their service of media sharing across multiple platforms.

The founders shared these interesting challenges and perspectives with my students and I last week. Here are a few of my favorite WATAs (walk away, take aways) from their visit:

1. They are a "scrappy little startup" who is trying to operate on a "beer budget and champagne dreams". Until recently, each of their team members were independent consultants. This provided them more financial flexibility in their first months of operation.

2. They "nearly lived together *virtually* for 24 hours a day" in the beginning stages. Rodney mentioned that he and Sean were on Skype for countless hours on end. He went on to suggest that Sean likely "heard my wife, my dog barking, and anything else that was going on at my house." Without much of a shared history to work from, Rodney and Sean established trust within their relationship by spending time *virtually* together. Oh, did I mention that Sean was in London finishing grad school and Rodney was in San Diego managing his other ventures? It's remarkable that they made it through that difficult time and managed to create a business that has endured. It's yet another example of entrepreneurial teams creating something from nothing in virtual space.

3. They know they "don't have all the answers"; they need help and they "aren't afraid to ask for it." Rodney explained that Twitter provided them an opportunity to connect with people that they likely wouldn't have had access to. In fact, much of their press has come from social connections made in social media spaces. This, of course, speaks to the power of Twitter for reaching out and establishing links with people who eventually can help and our be helped by you, the entrepreneur.

4. "It doesn't cost a lot of money to start a business," so says Sean. With a contribution of $5000 from each founder, they launched Tweetphoto. With relatively few expenses--apart from development and web hosting costs--and a steady source of ad revenue they've generated along the way, they've managed to keep the site running. However, to really grow it, they sought Series A venture capital from some of the biggest names in the business finally landing $2.6 million from Canaan Partners, Anthem Venture Partners, and our own hometown hero, Qualcomm.

5. There is no such thing as a one-size-fits-all VC presentation and "always have a Plan B." Sean impressed upon us the importance of having more than one presentation plan for each VC you meet with and being flexible with the delivery. In the five months of "raising money", Sean had over 30 different presentations that were each tweaked to the specific investment group and audience. He continued by sharing something he'd read earlier in the week, "It's easier to win the lottery by buying a lotto ticket than it is to raise money." [Aside: Sean, I think you scared away some of the would-be entrepreneurs in my class with that one.]

6. Put in a good word for your "friends" who've helped you create something from nothing. Both Sean and Rodney mentioned some of the key vendors and services that they've used in the past year: rackspace.com ["really good provider that scales with us"]; elance.com ["perfect for the entrepreneur, as you use the resources and skills of other people"]; and crowdspring.com and 99designs.com ["we used these to develop our logos"].

7. To get talented people to join them in their venture, the founders wanted to "give ownership to those who believed in our vision and our dream." Since they wanted to provide ownership, the two created a C Corp and offered stock to their early contributors. Of course, with little financial resources in the new firm, Sean and Rodney couldn't reward the key team members wth the money they deserved, so instead the two gave up some equity in the firm.

8. The "fun problem that every entrepreneur gets to solve" is figuring out how to make money. Since the early days of 2009, the Tweetphoto site has generated sizeable traffic and interest from celebrities to academics, and everything in between. While site traffic is nice, by itself it doesn't generate the kind of revenue necessary to continue to grow a brand and a business. For that, the guys routinely investigate the ways in which they can turn their service into something more than it is. As Sean said, that's the greatest challenge and the greatest fun.

9. Users use "our system differently than we ever imagined" and that's a good thing. When Rodney shared this with the class, it reminded me of some of the founding stories that I've recently read in the book, Founders at Work, by Jessica Livingston. Many of the stories that she recounts in her book touch on this aspect of entrepreneurship where the founder creates, but the user still refines and pushes the concept into what the market needs and/or wants. This result rubs against the idea of an entrepreneur as a farmer who tills the soil, plants the seed [the initial big idea] and waters it and fertilizes it until it becomes a solid tree that withstands the test of time. As Rodney related, "We're here for the ride and to steer the ship," but the winds and the waves are not easily controlled by the entrepreneur.

10. They were "kinda like dating" when they started their partnership. It's not what it sounds like, but it is in some ways it was as it sounds. Rodney described that he finds Sean to be an "ethical, trustworthy, and smart business guy." It was clear to all of us that these two guys supplement each other and contribute in different but important ways to the growth of their business.

All in all, it was a wonderful opportunity for us to both celebrate their accomplishments in their first year of business and to also hear of the challenges they've experienced along the way.

Sean and Rodney, we wish you and Tweetphoto* well this year. Thanks for sharing of your time with us.

*name TBD [smiles]

1 comment:

Scott M said...

Reading your posting inspire me to push harder as an entrepreneur. The WATA's segment of this article are especially valuable to me. The ubiquitous problems an entrepreneur faces on a daily basis are not as astronomical as they seem. Thanks much to your unique perspective from your articles. Your story telling approach stands out amongst other blogs and really make this blog a pleasure to read. I appreciate your insight and look forward to your future postings! Thanks Ben!