We’ve been blown away by the success of our new book Do More Faster: TechStars Lessons To Accelerate Your Startup. It’s already massively exceeded our expectations for sales and the reactions have been very positive. Amazing mentors produce amazing results, and this book is no different. Dozens of our mentors and past founders contributed to the book, and we think that makes it a very special resource for entrepreneurs.
We thought we’d blog a few chapters from the book so that you can start to get a feel for it. We’re blogging a chapter a week for ten weeks. Be sure to subscribe to the blog if you haven’t already done so.
There are seven themes in the book (Idea/Vision, People, Execution, Product, Fundraising, Legal/Structure, and Work/Life Balance).
This chapter is from the Execution theme. I’ve highlighted a few sentences, so you can discuss them inline. Feel free to add your own highlights!
Read this chapter (and others in this series) in the original layout using the online reader at BooksInBrowsers.com.
Be Tiny Until You Shouldn’t Be
by Jeffrey Powers
Jeffrey is a co-founder of Occipital, which uses state of the art computer vision in mobile applications for faster information capture and retrieval. On June 23, 2010, Occipital sold its RedLaser product line to eBay. Occipital remains an independent company.
In December 2008, the situation for Occipital was dire. We had a $10,000 deferred legal bill, dried up personal bank accounts, and no revenue. Seven months earlier we had flown out to Boulder to join TechStars with little more than a prototype piece of software that could recognize the logos on paper receipts. In the first week, we realized that everybody thought the technology was cool, but otherwise hated the idea.
Then we found a sexier idea that everyone loved. We were going to build a huge, multiplatform consumer application that used artificial intelligence to solve the world’s photo organization problems. There was a lot of buzz in our favor after we demonstrated an early prototype in September, but we failed to close funding for a number of reasons.
This failure gave us one major asset: a big chip on our shoulder. We didn’t need anyone else’s money. We already had what we needed, which was a core competency in computer vision, a technology area that we believed had incredible intrinsic value. In fact, we were borderline arrogant about it—we hypothesized that we could just hack off a tiny chunk of this technology and turn it into revenue. We tested this, stayed small, and launched ClearCam on February 3, 2009. ClearCam is a $10 iPhone application that captures high-resolution photos with the aid of computer vision. ClearCam was popular and we immediately were cash-flow positive. Near-death averted and hypothesis reinforced.
We got excited about going big again. But this time we wanted to become even bigger, which translated into technology that was an order of magnitude harder. That led to a near-merger with a group of seasoned entrepreneurs and another failed attempt at getting investors excited. The chip on our shoulder got bigger and led us to hack off a slightly larger chunk of technology than ClearCam. This turned into RedLaser, the first iPhone barcode scanner that really worked because it used computer vision to compensate for blur.
The response to our new product blew us away and RedLaser claimed a position in the top five paid applications on the iPhone App Store for many months. Today, we’re more confident than ever about the technology area we have focused on, we have a growing reputation with consumers, and we have the money to stop worrying about the premature death of the company.
By staying tiny and taking incrementally harder technology steps, we saw Occipital’s value increase dramatically. Now that we’ve found a formula that works, we are finally about to start growing our team from a stronger position than at any point in our history.
Jeff and his Occipital co-founder, Vikas Reddy, are the epitome of bootstrap entrepreneurs. Every TechStars class seems to have one and Occipital wins the bootstrapper of TechStars Boulder 2008 award. As you just read, they hunkered down and with no financing reinvented themselves several times until they launched RedLaser, which became a runaway hit. As RedLaser took off, they had a set of interesting investment offers but no longer needed outside capital and chose not to take any of the offers.
While Jeff and Vikas were on their way to creating an interesting mobile e-commerce company, they wanted to work on a much bigger set of technical challenges than RedLaser in computer vision and augmented reality, their areas of passion and technical expertise. In their travels, they had a few inquiries for an acquisition of the company, but really only wanted to sell the RedLaser product, not the entire company. Fortunately, they found a buyer in eBay, which was very interested in the RedLaser product without requiring Jeff and Vikas to stay involved long term. Financial terms were quickly reached and eBay acquired RedLaser.
Given this sale, Occipital is now a long way from ever raising outside capital. Jeff and Vikas are now extremely well funded, are scaling up a very interesting team, and going after a huge vision. They stayed tiny and made sure they were “too small to fail” until they shouldn’t be and it’s paying off big for them.
-David and Brad
Here’s the entire excerpt series.
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