Business Incubator Series: Interview With Kerry Rupp, Managing Partner, DreamIt Ventures – Philadelphia And New York City (Part 5)

By guest authors Irina Patterson and Praveen Karoshi

Irina: What tools do you use to accomplish your mission?

Kerry: Because we don’t specialize in a specific industry, protocol, or niche, and we don’t specialize in a particular stage – they are obviously all early-stage companies – we don’t think they need a curriculum or set of processes. There are a series of topics of interest to them, so we bring in speakers. For example, we know we are going to have investors, marketing specialists, and social media people.

There are certain set of topics that are interesting to all early-stage companies. But, we really work with each company to see where it is with the appropriate set of factors for it to make a measureable impact in three months, and every piece of advice and sense of direction we give to each team is relative to where that team is and what it needs specifically.

Irina: What are your metrics for success?

Kerry: Interestingly, and I think this is probably different for institutional investors that are farther down the path, we consider a company that determines that there isn’t a market opportunity and isn’t a viable business during the three-month period to be a success, in addition to other companies that do get traction to go out in the marketplace. So, a company that fails to launch within a three-month period can be viewed as a success, in that it didn’t spend several years and hundreds of thousands of investors’ money to find out what it could have found out in less time.

So, while we do measure things like how many companies we launched that are still active, how many of them have received follow-on funding from professional investors, how big those funding instances were, and what valuations there were, we are also looking to see whether the entrepreneurs, if their company wasn’t successful, went on to find something else and stayed in the entrepreneurial space.

So, some things are highly quantifiable when the companies do go on. But with the companies that didn’t go on, it is much more about that those entrepreneurs learned and whether there are any things to carry forward into future successful ventures.

Irina: Do you have any interesting stories?

Kerry: In our 2009 class, two companies came in and were accepted on the basis of their ideas. Halfway through the summer, they decided that [those ideas] were not viable businesses, and, in one case, they actually sold their first business. But in both cases, they realized over the course of the summer that there wasn’t enough market opportunity, there wasn’t a real problem [to solve], or they personally weren’t passionate enough about the industry, and they started something else.

So, each company, essentially, launched one company and then a second company, in the course of the program. We think those were interesting success stories.

One of those companies was SeatGeek, which is now a successful marketplace for the secondary ticket market for both concerts and sports events. They use a predictive, statistically-driven model, similar to travel sites, that predicts whether you should buy a ticket now or wait based on the direction the market is going. [The actor] Ashton Kutcher just put money into that company, and they had several investment rounds.

The other company is called Postling, and they had come in looking at the B2B space and wanting to provide services for bed and breakfasts, to better manage their reservations.

And, in the course of trying to work with the bed and breakfasts, they realized it was going to be a long slog to get to that market. But they realized the different problem was that small businesses such as bed and breakfasts really didn’t understand social media. And that market was far bigger; it expanded beyond bed and breakfasts to many small businesses that didn’t understand how to manage social media, or they didn’t have time to manage all the aspects of social media. So, this company created a platform where small businesses could manage their Twitter, Facebook, and LinkedIn accounts, and monitor the conversations that were taking place about them and to react to them. Postling has raised funding as well.

This segment is part 5 in the series : Business Incubator Series: Interview With Kerry Rupp, Managing Partner, DreamIt Ventures - Philadelphia And New York City
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