How
Chicago's Popular Pays Made the Most of Y Combinator
Jim Dallke
- Staff Writer
03/26/15
@2:13pm in Tech
169
Two
and a half minutes. After 100 days, countless hours, and many sleepless night,
that's all the time startups have to impress investors at the Y Combinator Demo
Day. Regarded as the best tech accelerator in the country, Y Combinator, which
invests $120,000 for 7% of the company, has helped launch some of today's
most well-known startups. And with its latest class, it can add a Chicago-born
company to the list.
Popular Pays, a startup
that allows Instagram users with a high number of followers to earn money by
taking pictures with certain products, was part of the YC winter 2015 class. In
an accelerator that sees mostly California-based companies, it was an important
milestone for the young Chicago startup.
The
company presented at Demo Day this week, and their performance has already
resulted in a flood of interest from investors, according to founder Corbett
Drummey.
"It
was intense," Drummey said. "It was 100 days of very hard work ...
The only goal you have is trying to get investors to remember 1 or 2 points of
your company and have them want to reach out and contact you."
Since
Monday's Demo Day more than 90 investors have reached out to the company, which
is a kind of investor reach Popular Pays couldn't have achieved anywhere
else, Drummey said. But the benefits of YC expand beyond just access to
capital; the community of advisors, peer support from fellow startups, and the
chance to focus on the direction of the company all helped mold Popular Pays
over the past 100 days, Drummey said.
"One
of the most underrated aspects of Y Combinator is focus," he said.
"With our whole team out here working, we just had a tremendous amount of
focus during these 100 days."
Popular
Pays used YC to help the startup shift from connecting influential
Instagrammers with small business, to adding larger brands to its platform. In
the past three months Popular Pays brought on Nike and a large restaurant chain
that Drummey declined to disclose, citing the company's wish not to be named.
Here's
how Popular Pays works: Companies list what type of social media post they want
on the platform, and "influencers" (people with a large social media
following) choose the ones they want and name their price. If the company
accepts the offer, the influencer is paid after the shoot.
Nike,
for example, may say it wants an Instagram post showcasing its new glow-in-the-dark
shoe, and requests a photo of someone wearing the shoe while running at night.
Sometimes the payment is free product (like Nike shoes), but for users with a
higher follower count (above 40,000) the company pays the user cash for the
post.
Drummey
said the company has 20,000 Instagrammers using the app, with roughly 1,000
people using it for paid deals. Popular Pays has paid out $130,000 to
Instagrammers in the last 3 months, he said.
Drummey
and the eight-person Popular Pays team is returning to Chicago in April, but he
expects to move the company's operations and engineering to San Francisco in
the near future. The sales will remain in Chicago, and he expects to begin
hiring more sales people soon. The main reason for the move was that engineers
were more likely to relocate to San Francisco than Chicago, Drummey found.
"That
was the hardest decision to make," he said. "We wanted to keep our
momentum going. When it came down to it, we knew we wanted our sales team in
Chicago. But what we found for engineering talent is that people were less
likely to move to Chicago. Engineers were more likely to relocate (to San
Francisco)."
Popular
Pays raised roughly $775,000 before YC, mostly from Chicago angels, including
Howard Tullman and Lon Chow.
