Mike McDermott interviews Garrett Camp from StumbleUpon. Notes on selected questions below. StumbleUpon was purchased in 2007 by eBay. It has over 3 1/2 million members currently.
Q: Why would eBay purchase them?
A: eBay doesn't have a recommendation system, but it has a social networking aspect. He sees it as a good fit.
Q: The role of advisors in developing the company. Where and when did you meet angel investors?
A: Met two in 2005; met their chairman later in the year. Had informal angels in the first six months and then had formal angel investors after that. He found their advice helpful; little things like how to structure agreements. Rather than paying lawyers for advice, the angels were able to guide them what to do as to what works and what doesn't. Their investors acted as a resource.
Q: Biggest mistake?
A: Should have gotten more people involved earlier. Didn't have lawyers or UI (user interface) people early enough. The three of them each had a third to develop and banged away to develop it. They didn't really think a lot about the business aspect of it.
Audience Q: How do you maintain the entrepreneurial enthusiasm once you are purchased?
A: The atmosphere is the same, the same office, same staff; they are doing the exact same thing but have new financing so don't really worry about it.
Audience Q: The social piece of it; do you see Google Shared Items, Notes, FriendsFeed as competition? He hasn't used his StumbleUpon account in months.
A: In a way they are competition, but Google's tools are not fun or interesting but focused on productivity; fun/entertainment is StumbleUpon's forte.
Q: Did you focus on the product or think about money at the beginning?
A: Didn't make sizeable money until 4 years later. Product-oriented for the first while. They took donations until they had a large number of users.
Audience Q: StumbleUpon uses serendipity to make the experience a "flow" of new things...was this creative purposefully?
A: The random factor was always there; it is quasi-random but somewhat guided. If you do not know what is coming next you are more compelled to using it. He didn't really think about what compelled people to use it until later.
Q: Did you have any VCs (venture capitalists) reach out to you?
A: One did in the early years, but he doesn't remember who it was. Someone Canadian.
Q: What is your take on the culture with VCs in Canada than in the U.S.?
A: He has heard there are a lot of VC firms in Canada, but he didn't really find them at first. He didn't even have a pitch until his first three informal angel investors helped him put it together. They were just giving advice.
Audience Q: Could you have found that in the Calgary community very easily?
A: It is really just getting going in most cities, even in the U.S. In Calgary he was just hanging out with people on the research side. The mixer events where people from different areas can meet each other are invaluable.
Q: When you meet someone in Canada at an event, it is low-key. When you meet someone in Silicon Valley, people tell you what they do right away, geared to pitch.
A: In Silicon Valley, anytime you meet someone it is a pitch. It is not restricted to the boardroom. Unless you go to a purely social event, you can expect to be talking about business.
Audience Q: The category of finance and investment does not get a lot of play in StumbleUpon. If you gave that more prominence, would your members be interested in that aspect?
A: It is possible. They would have to change the features to be a little more utility-oriented. It is geared toward entertainment right now.
Q: How do you size up opportunities?
A: Make something that would have mass appeal, but make it something that you would want to use. Think of your demographic and make it as easy as possible for that demographic.
Audience Q: Did you get any smart advice to negotiate the sale?
A: Had generous comments from the angels. They became like a team that brokered the deal. Regardless if they got funding or sold, the angels would do well.
Q: How do you set a valuation of a company?
A: Based on what percentage the investors want, and how much you need.