1Mby1M Virtual Accelerator Investor Forum: With Shane Neman, Principal at Neman Ventures (Part 6)

Sramana Mitra: You were running a bootstrapped business; you had to make it profitable, otherwise you would go out of business.

Shane Neman: Right. It is interesting because there were certain things that I could have done to accelerate a lot. However, I chose not to do it because it would be highly unprofitable to do. I think that venture-backed companies have the luxury of doing that because they have runway and burn and all this money behind them. I didn’t have that. I don’t think that is normal in the SaaS world. I was in it in the early stages.

Sramana Mitra: I think it is quite normal because there are tons of bootstrapped companies now.

Shane Neman: I think BaseCamp is, right?

Sramana Mitra: Yes, among many others.

Shane Neman: You can run the business for it to be your business and have it for the rest of your life potentially.

Sramana Mitra: The biggest example we have in that category is Zoho.

Shane Neman: I use Zoho at EZ Texting. I know exactly what it is. There you go.

Sramana Mitra: How much did you sell EZ Texting for?

Shane Neman: I cannot say that because it is part of the deal. You can imagine it based on the revenue.

Sramana Mitra: With a $10 million ARR, I would imagine it to be a $100 million exit.

Shane Neman: All I can say is that in 2013, SaaS companies were not valued the way they are now. I wouldn’t go that far, but yes.

Sramana Mitra: Fair enough. At least a $50 million exit, I imagine. You were the sole owner of the company, right?

Shane Neman: Yes.

Sramana Mitra: You are investing nowadays?

Shane Neman: After that, I stayed with the new company and I oversaw the integration. We also did a few other acquisitions to help grow the business, but it was obvious that my time there was over because I had performed my function. I was looking to do other things.

What was interesting to me was looking for other companies and other entrepreneurs that were smart, savvy, thinking differently, and doing interesting things. I want to help with not just money but with some guidance that I can help with. I started doing venture investing. I also started doing real estate investing, because I just knew that from previous experiences that I had. I was doing both of those things for the past seven years or so.

Sramana Mitra: In that context, give us a little insight into what kind of tech stocks that you like to invest in. Your real estate and non tech investing is of less interest to us. Within tech, what would you like to invest in?

Shane Neman: Let me tell you something interesting. I did a seed-stage investment a year and a half ago in a PropTech company. That is interesting. That married both the technology and the real estate knowledge that I have. It’s called the ResiDesk.

It’s made for residential property, owners, and managers. It’s a central communications hub for multi-family homes and apartment buildings. It’s a front for all the residents throughout all the properties that you own or manage. It all comes into one centralized space. If they are texting, calling, or emailing, it comes into one centralized hub so that the property managers can see how things are being communicated in a central hub.

Furthermore, it gives you AI and analytics to say, “Hey, this guy in this apartment is probably not going to renew his lease because you never fixed his toilet from a week ago or something like that.” It uses Google sentiment engines to tell you from a certain conversation if someone is likely to churn.” It also gives you other AI for prospective tenants who are applying for an apartment.

That was one interesting thing where I could help a lot because I knew a lot about the messaging world because of EZ Texting. I have been working with those guys intimately in helping them in many different respects from the product to introducing them to large customers that could use their system. That is that. What I find interesting right now is this idea of who is going to disrupt the disruptors.

Who is eventually going to disrupt Google, Facebook, or Twitter? There is this idea of Web 3.0. Web 3.0 is everything and anything that has to do with the Blockchain. It’s not necessarily crypto. I am not talking about Bitcoin and Etherium and the trading of those tokens. I am talking about applications that are built on top of those frameworks that are decentralized.

Imagine a decentralized Twitter. There is one right now, but I forgot the name. It is what websites looked like when Yahoo was the incumbent. They look funky in the beginning, then there’s web 2.0 where everything is better. This is the early stage of that time. It’s clunky, it doesn’t work that well, it’s not as thought out as Twitter, but what is interesting about it is the fact that it is decentralized.

Before you come in, you know what the rules are. You can rest easy that unless there is a huge community consensus, those rules won’t change. Twitter changes or bends the rules all the time because it is a central system. There is a lot of power in decentralization.

The thought is that if you could use something that is decentralized and it takes away the incentive of the company that has centralized it from changing the rules on you constantly, most people would prefer to use that eventually. There is a lot of stuff that I have been looking at in that realm of applications built on top of the blockchain. It’s not as obvious as the financial stuff that people are talking about.

This segment is part 6 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Shane Neman, Principal at Neman Ventures
1 2 3 4 5 6 7