1Mby1M Virtual Accelerator Investor Forum: With Shane Neman, Principal at Neman Ventures (Part 2)

Sramana Mitra: There was little due diligence before people were willing to write checks at that time.

Shane Neman: In retrospect, I wouldn’t have given myself a check. We got almost $2 million. I wasn’t part of the finance portion of things. I was the CTO. We built this company and hired people. We built a platform that was essentially Microsoft 365.

We called it utilizing computing because we didn’t have the word for SaaS. You had to pay a monthly fee just like you would pay a monthly fee for your utility bill. We would get your apps delivered to you through a web portal. We built essentially an AppStore because you could pick which apps you wanted for how many users and pay for them on a monthly basis.

We hosted your files like Dropbox. It was this whole concept of being able to get the apps in your office to anywhere you were on any computer or any device by logging in to this portal. Due to the dot com bubble burst, 9/11, and being too early, it didn’t succeed. There were broadband penetration issues. There was also this psychological issue of businesses getting over paying monthly instead of paying one time. They bought Microsoft Office and that’s how they thought it worked. After that startup failure, I was completely broke. I had saved something in the order of $75,000 and I’d put all that money into the business.

All the partners had put in money, we had not taken a salary and the investors never put in the money that they were supposed to put in to keep us afloat. I found myself in a situation where I had no money. I moved in with my girlfriend to save on rent. It was also weird because nobody wanted software engineers. After all, all the dotcom companies had gone bust. This is weird now because there is a huge demand for software engineers.

What was ironic about that was the fact that I did computer science as a backup in case I didn’t get into medical school. That was my backup plan. Even your backup plan sometimes doesn’t work. That is pretty interesting too. That was when my journey as a solo entrepreneur started. It’s unique because it is in an industry that you wouldn’t expect.

I mentioned that I moved in with my girlfriend and she was going to college in New York at that time. She was doing events and nightclubs and that kind of stuff. I was going to them as she was working there at those places. I had nothing else to do because I didn’t have a job and I couldn’t find a job. While I was there, I realized that the whole event, nightclub, and bar industry was backward.

They were doing things very manually and in an analog way. They’d print fliers that they would give out. They had people that would go around with a clipboard and write down your name and number to call you. They would also get your address to send you postcards. There was no way of people finding you on the web about what is going on and where. That was when the idea for a company named Joonbug came up. It started as a website listing what events are going on because I had that insider information. I started it as a directory and an email list. It went on that way. I was trying to bring the offline events world online. What is important to understand is that this is pre-Facebook, pre-MySpace, and pre-Eventbrite. Over time, it morphed into developing tools for the event industry like a ticketing system. We created an email list of over a million subscribers that were young urban professionals who went out.

Sramana Mitra: Was that all in New York City?

Shane Neman: Initially, it was for the first few years. We expanded out to LA, Miami, and major metropolitan areas. As we expanded, we moved into different cities. At that time, camera phones were non-existent. Having a digital camera was expensive. Most people didn’t have one because they cost thousands of dollars. We invested in buying those and we took pictures at the events. We were taking pictures at hundreds of events per week. We took pictures of patrons and gave them a card of where they would be able to look at their pictures online. We would do data capture on them. To see the photo, you would have to give us your data. 

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Shane Neman, Principal at Neman Ventures
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