As we gear up for the July 1st deadline for the Fall 2012 Boston program, I’ve been thinking about what founders bring in when they enter the program, and what they take away. I sat down last week with recent alumna, Yifan Zhang of Pact to talk about her experience.
Yifan is a recent college grad who has already nailed the first pivot of her second start-up. She’s not looking for a job. She’s creating them: four to date, and three more in the next quarter. That’s impressive, even for an Ivy Leaguer. She and co-founder Geoff Oberhofer found a way to create and implement systems that incentivize positive behavior change. Their killer idea, GymPact, is a mobile application using GPS check-ins to keep customers true to their personal fitness commitments. If users don’t feel the burn from hitting the gym, they’ll feel it where it really counts: their wallets. Forgot your sneakers? Pay up. Kept up with the program? Lose weight while gaining extra $ paid out from the pool of user fines. The results? Fuller gyms. Healthier people.
The team applied to TechStars and made good use of their time while they waited to hear back. They took a detour south of the Equator for a grant from Startup Chile that included office space and ‘la oportunidad de practicar el idioma español.’ When they learned that they were being seriously considered for one of the coveted thirteen TechStars spots, they cut a mountain trek in Southern Chile short to hunt down a reliable internet connection (no small feat in a remote locale) for a Skype appointment to discuss their candidacy. Although brief, the call went well and they returned stateside having scaled a literal mountain as well as figurative one by securing a spot in Boston’s Spring 2012 cohort.
Ask Yifan if it was worth the effort, and you’ll get a resounding, “Yes!” She takes her role as CEO very seriously and I have seen her take full advantage of the TechStars network for everything: product direction, investor pitching, hiring, and leadership pointers. Most founders will tell you that, short of jumping in, there is no way to prepare for program’s intensity. Yifan’s experience proved that in spades.
Their first one-on-one meeting was scheduled with none other than TechStars co-founder Brad Feld. A tad intimidated, they went into the session having done their homework. As Feld took out his credit card to try out their app firsthand, that list of thoughtfully prepared questions promptly went out the window. Zhang recounts:
“The signup process was entirely on the website, and after the transaction was complete, users would get a download link for the app. We didn’t think that people would enter in their credit card info directly to their phone. Seventeen out of the twenty minutes of the meeting were spent signing Brad up. He finally ended up doing it, but it was the most painful experience ever.”
Everyone wants to “crush it” on Day 1, but it was clear when we de-briefed that they were a little crushed. Having guided other companies through the process, I pointed to the opportunity hidden in those agonizing moments. “Brad does not zero in on something unless he thinks it’s important,” I told them. I didn’t need to say another word. They recognized the value of addressing a core product issue head on. GymPact embarked on a three week product revamp that changed the concept from a hybrid web/phone experience to a native mobile application.
“It was a really smart decision. We saw the difference immediately. Our signup ratio switched to 70% (mobile) / 30% (web) and the conversion rate from download to paying customer jumped too.”
It was the first of many twists for Zhang and her team. Pre-TechStars, the company’s bootstrapping mentality paid-off with a monetized cash-positive model. The trick was breaking through to the next level. During mentor and investor pitch sessions, they came nose-to-nose with a perception problem that brought them to a pivotal realization.
“We had a meeting with Katie and Reed where we said – this sounds crazy but the name GymPact is affecting the level of interest in our company. They immediately think that it’s a very niche idea in a very niche industry – just gyms, just fitness tracking – when our idea was always about behavior change and incentives.” The steady stream of feedback provided the confidence to embrace their idea’s full potential to change lives. With three weeks until Demo Day, they changed their name to ‘Pact’ and transitioned from a single product to a platform for behavior change. GymPact became the flagship offering, demonstrating their model of building adaptable products that integrate with the APIs of widely adopted activity tracking systems. This allowed them to forge partnerships with major players in the health and wellness space (like Harvard Pilgrim and Puma).
Their progress didn’t stop there. Over drinks with mentor Sean Lindsay to celebrate wrapping the final presentation prep three days ahead of schedule they stumbled onto another revelation. At the beginning of the program, Sean had asked Yifan and Geoff if they wanted their feedback direct or candy-coated. That night at the bar, Lindsay served up his thoughts about their presentation as promised; straight-up. Their slide deck sucked. He was right. They finished their drinks and headed back to the office to call in a HackStars designer for help. At 3:00 a.m., they emerged with a tighter message and a slick new look.
On Demo Day, they crushed it on several levels. As Managing Director, I have a front row seat from where I can see the personal growth of founders translate into amazing results. Pact’s ability to listen, park their egos and take decisive action led them to a business direction far ahead of where they were at the start of the program. Keeping pace with TechStars’ experienced mentors gave them a finely-tuned product with consistent messaging. It is clear to both users and investors that going with Pact gives them a powerful ally in meeting fitness and financial goals.
Having just closed a seed round of venture capital funding only a month after the program, I can officially say Pact is on the fast track.