Venuefox Co-Founders Speak of Market Validation, MVP’s, Accelerators, and Partnership Agreements

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“Our motto is ‘Keep Showing Up’” declared Andrea Hansen, CEO and Co-Founder of Venuefox, in answer to an audience question regarding how she perseveres down the arduous start-up path. “We know we are going to suck at whatever we do until we get good at it, so we keep trying,” added Co-Founder Jerod Mollenhauer admitting that this keen insight might be slightly plagiarized.

Hansen and Mollenhauer were guests of Mike Colwell, Executive Director of the Business Innovation Zone at the February edition of Start-Up Stories, where they shared insights and lessons learned, now in the third year of their entrepreneurial adventure, before an interested audience which included the inaugural class of Des Moines’ Global Insurance Accelerator.

Appearing as Co-Founders in this monthly gathering, which typically sees single founders, Mollenhauer and Hansen could bear witness to the importance of recognizing the inevitable result of partnerships and planning for it. “We had heard enough founder stories that we went in with our eyes wide open,” explained Hansen of the simple truth that all partnerships are going to ultimately dissolve and that it is best to have a clearly defined equity relationship and plan for dissolution going in. “We signed the pre-nup,” joked Mollenhauer, explaining they had established both a vesting schedule and specific milestones for each to meet as they moved forward. Both however concurred that this partnership, facilitated by Hansen’s hair dresser who is also Mollenhauer’s brother, is going very well so far.

Venuefox, was initially the brainchild of Hansen, birthed by her 15 plus year career in development which meant she was often planning events. It’s an online marketplace to discover and connect with venues and vendors for corporate events. Intended for small and medium sized businesses, it allows executive assistants and other part-time event planners to review available venues while serving as a 3rd party marketer for those partnering venues. Of course, like many start-ups it took a while to discover the actual niche they wanted to serve and as Mollenhauer told the group — that was their first and perhaps largest mistake. They started out serving virtually every conceivable event from children’s parties to weddings to corporate meetings because they didn’t invest enough time into market research before committing to a platform they would ultimately abandon. “We were too broad in our focus and we built something that the market eventually told us they didn’t need,” Mollenhauer observed, while Hansen added that they could have tested the market in a much easier way, with much less and found the answers that would help them narrow the focus to where they are today.

After scrapping the website on which they had literally spent thousands of dollars, opportunity came knocking. Accepted into the inaugural class of the Iowa Start Up Accelerator in Cedar Rapids they temporarily relocated to Eastern Iowa and went all in, submitting themselves to the whirlwind experience that some of their audience members were just beginning; life at an accelerator.

Characterizing the experience as tantamount to acquiring an MBA, the co-founders listed knowledge, particularly focused upon their specific business, along with connections and advisors among the greatest values they found within the accelerator experience. “Having all these mentors lined up, knowing they were committed to the accelerator and that you could call on them saved a ton of time trying to network,” Hansen recalled. In addition, the presence of the other teams made the experience more collaborative and allowed even further leveraging of expertise within and among the participants.

In response to an audience member’s request for advice, the duo encouraged them to ask for help. While the mentors and advisers are there for that very purpose, the start-ups need to be proactive and express the help they are looking for. At the same time Mollenhauer cautioned, “You don’t have to act on all the advice you get because you’re going to get a lot, and some of it needs to be filtered out.”

Providing a periodic status update e-mail to mentors and advisors as well as investors and potential investors was cited as a good means to both keep open communications and remain top of mind.

Hatchlings creator Brad Dwyer, asked the pair to compare and contrast the start-up scenes. As they had already alluded to, the physical space of the accelerator in Cedar Rapids was impressive and there isn’t an equivilent in Des Moines. “I loved the Cedar Rapids start-up community,” said Hansen who has previously expressed her respect for the Corridor entrepreneurial ecosystem and her hope that Iowa’s various hotspots of activity can grow more close and collaborative in the future.

Acknowledging that the smaller size of Cedar Rapids, plus the relative proximity of Iowa City created a unique scenario, both expressed a hope that the Des Moines community could find a way to welcome new blood, perhaps expanding the focus to include a broader segment of the entrepreneurial community while also identifying a larger pool of early stage investors.

Meanwhile, happy to be back in Des Moines, Hansen and Mollenhauer are focusing on their Minimal Viable Product as they construct a unique referral platform that fits a market demand they have well identified. Toward that end they plan to keep showing up.

Ostanik Shares Tales of Two Start-Ups

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“It was an accident actually,” quipped Matt Ostanik, CEO of FunnelWise, as he spoke about his initial venture into entrepreneurial territory. “I stumbled into it as I was frustrated with something in my profession and I felt there had to be a better way.” Submittal Exchange, a highly successful construction communication software company was the better way he found although the process took a bit longer than expected. “I was on record, to my wife, that I would be done with the project in 2 years, but of course it was more like 10.” Still, it was 10 years well invested as Submittal Exchange was ultimately acquired by Textura Corporation and Ostanik, the architect turned entrepreneur went on to become a corporate executive.

“I discovered I liked creating things,” said this still licensed architect of his decision to leave Textura and start another venture. “I guess there exists a certain synergy between architecture and building businesses,” he postulated. His observation underscored the fact that two of the last three guests of the Start-Up Stories series began as architects and went on to become successful business builders.

Speaking before the January iteration of the Business Innovation Zone’s Start-Up Stories, Ostanik, now a bonafide serial entrepreneur, would speak less of Submittal Exchange and more of his current venture FunnelWise, as well as the differences in his approach to the two ventures and the lessons therein for other would be entrepreneurs.

Taking its name from the traditional business view of the sales and marketing process as a funnel, FunnelWise integrates with and marketing automation software to bring an alignment between the all too often disparate and disconnected silos of marketing and sales within a company to support best practices for successful revenue generation. Some of the similarities, differences and lessons were explained by Ostanik while fielding questions from Mike Colwell, Director of Entrepreneurial Initiatives of the Greater Des Moines Partnership as well as members of the audience.

Frustration as the mother of invention

Like Submittal Exchange, FunnelWise grew from Ostanik’s exasperation that no such tool existed. “Sales is both an art and a science, and it seemed that in my previous position I was spending half of my time or more managing Excel spreadsheets,” he said of the genesis of FunnelWise.

Not just your frustration

“I got lucky with Submittal Exchange, I built something I wanted and it turned out that others wanted it too,” he shared of an approach that he does not endorse and did not use for FunnelWise. The creation of FunnelWise was a very deliberate market research driven process involving more than 100 interviews of potential customers before any product development. Next came a mock-up process of a basic product that was then reviewed by the 30 most interested of the initial interviewees, and only after that feedback did the first line of code get written. “I was afraid people would not talk to us, but if you ask about their pain points, they are happy to tell you all about their frustrations,” he said of the value in the market research process. As a result of this approach, the first customers are now awaiting the products release.

Obsess over the right details

“In my first start-up I did not know which details were important so I obsessed over all of them,” he explained admitting to a certain level of micro-management. “The reality is that in any business there is a really small set of things that truly matter and you have to be perfect with those and the other things don’t matter that much,” he said shaking off the professional proclivity of an architect to become mired in the minutiae.

The right details

“From my perspective, the ones that really matter the most right now are getting the right people on board and shaping the right culture,” he shared, noting that with Submittal Exchange he tended to hire the entry level first but that with FunnelWise he his bringing on the leadership team first and letting them build out the staff.

Shaping brand and message follows as a priority not only to properly identify them in the marketplace, but also to attract the right people to join the team.

And of course creating a technology that is powerful, intuitive and addresses the pain of their clients is a detail worthy of at least some level of obsession.

Know your sweet spot

FunnelWise enters an already crowded Customer Relationship Management software field with a focus on aligning the efforts of marketing and sales and providing valuable real time data to business leadership. When asked if the goal was to develop into a fully integrated one stop shop for business communication both internally and externally, Ostanik said no. “The reality is a lot of companies employ a number of tools, and while we will likely develop the ability to integrate with some of them, for now our focus is on our sweet spot.” As Ostanik’s history has proven out – knowing your sweet spot can yield some pretty tasty and profitable results.

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