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How Chicago's Popular Pays Made the Most of Y Combinator

How Chicago's Popular Pays Made the Most of Y Combinator

Jim Dallke - Staff Writer

03/26/15 @2:13pm in Tech

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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.

 

 

Guest Blog

Experts Provide a Forecast for Chicago Startups in 2013

By Kevin Willer and Edited by: David Wolinsky

|  Thursday, Dec 13, 2012  |  Updated 3:56 PM CST

                       

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Last Tuesday at the Chase Auditorium, the CEC hosted the 2nd Annual Startup Forecast, where leaders from Chicago’s entrepreneurial community predicted trends and opportunities for the startup community in 2013. About 400 people attended, but for those who couldn’t, here are some of the highlights.

Howard Tullman kicked off the morning with his predictions for social media in the New Year. He talked about the importance of “mocial” (mobile + social) as a way to define how marketers will use this powerful combination of communication channels to give us what we need, when we need it, wherever we are and without asking. Howard also predicted the largest megaphones will still rule the social media landscape compared to the brightest bulb. He hit on how all commerce is, in fact, local. For example, Walmart has over 8500 Facebook pages, with one for each store. He added that he thinks the Facebook “like” button should be changed to a “want” button. His talk concluded with the idea that in social media, “who you know is more important than what you know” and that in 2013, those networks will become ever more important and powerful.

Neal Sales-Griffin, co-founder of The Starter League, followed Howard. Neal’s talk focused on developing new talent in Chicago. The Starter League is a year-old local startup “where people from all over the world come to learn to code, design, and ship web apps.” Neal shared his story of TSL’s origin -- how he taught himself how to code in his spare time because there were no programs available and how this became the impetus for him and his friend Mike McGee to create something new. The Starter League now has 130 students and a partnership with legendary Chicago technology company, 37Signals and founder Jason Fried, to help address the tech talent gap locally and beyond. Neal predicted that in 2013 there would be many more coding programs around the country and that individuals will find new ways to be educated in pursuit of their dreams, to take a risk, or to solve a problem.

Brett Goldstein, Chicago’s CIO was our next presenter. Brett shared various initiatives that the city is working on that use technology at its foundation to provide a better understanding on how the city works, to make it more transparent, and to provide better services to residents. On the transparency front, the city has created a portal where, as Brett joked, you can look up his salary and other great information: https://data.cityofchicago.org. Brett predicted more people would use the Open 311Chicago service in 2013 and that we will build more things through automation.

Our last keynote speaker was Lon Chow from Apex Partners, who gave his perspective on venture capital in Chicago and what we need to be working on. Lon didn’t sugarcoat the situation. While we’re seeing more venture capital investments in Chicago in the last couple of years from both local and national investors, we still lag behind other cities. We have a lot of work to do, but a good place to start is to encourage more capital flowing into our local VC funds. He said Chicago is doing well in the earliest-stage funding, but we need to attract more funding for the later, larger rounds.

The sessions edited with my moderating a panel discussion about trends in technology. Here’s a quick hit on each panelist:

• Harper Reed: “Check out github for interesting new trends” and “developers want to work on big, hard problems – inspire them.”

• Luke Shepard, eSpark: Moved to Chicago six months ago from working at Facebook and can’t believe how much is going on here.

• Marcy Capron, Polymathic: “We need both empathy and technology to build great companies.”

• Craig Ulliott, Belly: “I like being in Chicago because people here know how to start real companies.” (note: Craig is from Scotland)

My hope for Chicago’s startup community in 2013 is we fulfill the promise from all we’ve done in 2012. We need startups to execute on their strategies and create growing, sustainable companies.

Next year, I hope we have more big successes –- maybe an IPO or two. I look forward to seeing how the city invests in wired and wireless infrastructure. And hopefully we’ll have a few “graduates” from 1871 who are growing so quickly that they need to get their own office spaces (hopefully nearby!).

Kevin Willer is the president and CEO of the Chicagoland Entrepreneurial Center and 1871.

Related Topics Guest Blog, Tech, Predictions

Source: http://www.nbcchicago.com/blogs/inc-well/Experts-Provide-a-Forecast-for-Chicago-Startups-in-2013-183412011.html#ixzz2F3BBs93o

Top 5 Takeaways from the CEC’s Startup Forecast 2013

 

Adam Lupu, December 12, 2012

  

Last week, I attended the 2013 Startup Forecast. Hosted by the CEC, this was a great opportunity to connect with the Chicago entrepreneurial community, hear from local luminaries, and do a little predictive analytics on what the next 12 months has to offer aspiring business builders. As I described in last week’s post, I took notes, reflected on what I heard, and distilled my learnings down to the perspectives I need to apply and the actions I’m going to take. Now it’s time to tell others what takeaways I will be using while continuing to build my company. So here are the top five takeaways that will help guide our efforts, and hopefully, our success.

Takeaway #1

Perspective: Every business is now a service business.

Howard Tullman offered this perspective during his humorous and fast-paced talk about the trends he’s noticed amongst tech startups. He offered several others (the fast will eat the slow, the social graph is giving way to the interest graph, there’s a website that will tell you when to pee in the middle of a movie, etc.). But this one stood out. For the last two decades, startups have been trying to come up with a product that will solve a problem and make the founders rich. And some have. However, the most successful products are part of a larger service. Google gives us a search product, but makes its money on the adwords service; Apple gives us iThings and MacStuff, but profits most on its App Store, iTunes, and telecom services. Amazon, Ebay, Craigslist, Facebook, and many more survive and thrive based on their service ratings (or the “service” ratings of their users). And companies like Groupon and Zynga struggle based on mostly anecdotal evidence of poor service, even as their products get consumed like crazy. So what’s a startup to do? I’m going to do the following…

Action: Start with a service solution to a problem and make the product promote the service rather than the other way around.

Takeaway #2

Perspective: Real change requires an alchemy of skills.
A shout out to my colleague Neal Sales-Griffin, Co-Founder of Starter League, who made everyone powerfully aware of this perspective. He told a great story about how he realized his business skills alone were quickly becoming “irrelevant” and that he needed to augment them with a strong technical education. Building a company around silos of skills, where teams are divided by departments, doesn’t help startups one bit. In fact, the very reason I like working with education-inspired companies like The Starter League and Mobile Makers Academy is because they embrace this concept of skill-based cross-pollination. So I’m going to take a page out of Neal’s book and the network science I learned in school.

Action: Create teams with a diversity of skills (marketing, sales, design, development, etc.), rather than departments where these skills remain isolated.

Takeaway #3

Perspective: Bureaucracy destroys value, but a virtuous relationship with legacy businesses will add significant value to all involved.

This was perhaps the most surprising perspective I heard at the event. Delivered powerfully and eloquently by Glenn Tilton of JP Morgan Chase, this perspective requires an understanding that not all disruption is good disruption. It’s often better to work with existing businesses rather than tell them you’re coming after their lunch money. Revolutions may be exciting, but they are never sustainable. If we want lasting change, Glenn proposed we spur existing businesses to open their minds to startups and prompt startups to work on sustainable solutions that offer a convergence with existing businesses. He suggested that we ask a simple question: how can we promote the combining of brainpower between the businesses that already exist and those that have yet to arise?

Action: Cooperate with and learn from existing businesses, don’t just compete with them. Strive for evolution, not just revolution.

Takeaway #4

Perspective: Big Data’s big day is still on the horizon.

As college kids, aspiring job changers, and current software craftsman race to fill the design and development needs of today’s companies, Brett Goldstein, the Chief Data Officer of Chicago, reminds us that data is the next “big D” job market waiting for talent. Having explored machine learning, social network analysis, education research, and many other forms of data-intensive study, I totally agree. Thanks to Brett, the availability of data in Chicago is at an all time high (see: data.cityofchicago.org), and the city is quickly becoming a center for business and academic research. But just collecting data is not enough; analysis comes next, and we are only beginning to understand the nuances and skillets needed as the field itself grows faster than the bytes it collects.

Action: Know data, know data analysis, and most importantly, know data pros. 

Takeaway #5

Perspective: Tough times mean good things for rational decision makers.

Not all thoughts about the startup future in Chicago were rosy. Lon Chow (of APEX Ventures) pointed out that while the money coming out of venture capital in Illinois is growing quickly, the money going into Venture capital is actually decreasing. This means we will see companies get funded in the near term, but unless things change, we’ll see far more demand on venture money then there will be supply as the year progresses. What this means for Chicago is that the venture marketplace will evolve. We’ll continue to see successful Chicago exits, and we’ll continue to see capital find good companies with savvy founders. But the quality of businesses will go up as they compete for scarcer resources. Lon’s betting his money on this evolving ecosystem. I’m going to bet my brains, skills, and talent.

Action: Buck trendiness, avoid “sexy” sectors, and focus on smart business.


Five Takeaways, five new perspectives, and five concrete actions – and that was just the first 90 minutes of the event. Thanks to the @chicagolandec for putting this on. Now it’s up to you and me to make the most of 2013.

* Adam’s column, Mission Control, is about launching a startup and tracking its rise. From overcoming setbacks to ultimately (fingers crossed) fulfilling his mission, Adam Lupu offers his inner thoughts and outer workings while building a company. Read more of Adam’s “Mission Control” column here. *

 

About the author

 

Adam Lupu

 

Adam Lupu is a Learning Architect designing and building new structures in education and technology. While starting his own EdTech company, Adam continues to work with Mobile Makers, The Starter League, and Global Playground. A ten year vet of teaching and learning, Adam has a Masters in Learning Sciences from Northwestern University and can be found blogging at AdamLupu.com, tweeting @HowWeLearn, or proudly shouting "Maybe next year!" outside Wrigley Field.

 

 

 

 

 

 

   

 

TRIBECA FLASHPOINT ACADEMY CEO HOWARD TULLMAN JOINS IVCA PANEL ON DISRUPTIVE EDUCATION MODELS

                        Association News

IVCA Preview: Lon Chow, Partner at Apex Venture, to moderate IVCA Luncheon 'How Entrepreneurs are Addressing Gaps in Education'

November 7, 2012 11:59 PM -

CHICAGO – November 13th, 2012, is the date for the next IVCA Luncheon, with the timely topic of “How Entrepreneurs are Addressing Gaps in Education”.   Lon Chow, General Partner at Apex Venture Partners, will moderate the panel of entrepreneurs who have approached both primary and secondary education with a different and unique approach – Neal Sales-Griffith of The Starter League, Howard Tullman of Flashpoint Academy and Shegan Campbell of Kids Science Labs.

The IVCA spoke with Lon Chow last week, to get a preview of the Luncheon, and to discuss the issues surrounding this creative education movement.

IVCA: What was the origin of this subject for an IVCA luncheon? Why do you think it's a vital issue to talk about today?

Lon Chow: This subject originated from both professional and personal perspectives. On the professional side, I see a lot of entrepreneurs doing very interesting things in the education space. Some of the more interesting ventures are around the topic of this luncheon - how entrepreneurs are disrupting the education industry from the ‘outside-in,’ versus improving education from the ‘inside-out,’ such as selling technologies and services to school districts and universities to improve existing processes.

On the personal side, I am interested in what makes a successful young entrepreneur. I believe the professional careers of my children’s generation will be more entrepreneurial in nature than prior generations. When I look at all the talented young entrepreneurs I have met in my career, I see a group with very diverse background and educational paths. It started me thinking about  ‘what is the purpose of education?’ in the context of what it means for my children’s future.

IVCA: How did that context lead you to a different perspective on education?

Chow: I see a blurring of line between ‘higher education’ and ‘vocational training.’  I have a daughter who is a high school freshman.  The pressure of the college process will start soon enough for her, and the process will not be pleasant.  I think there’s too much misguided emphasis placed on getting into the ‘right schools’ versus what is the right education or professional training for a teenager or young adult. I don’t think I have the answers figured out, but examining this topic has led me to be more ‘open-minded’ about what the purpose of an education should be for high school and college students.

IVCA: Who will be on the panel, what are their backgrounds and what expertise will they bring to the discussion?

Chow: We have Neal Sales-Griffin, co-founder of Starter League [previously Code Academy].  It’s a for-profit school that teaches non-technical people software programming. Software drives a huge part of the global economy. People are studying programming for different reasons, some are looking to make a career change, others believe understanding how software works will help them be more effective at their jobs, and there are also people who want to start their own business and create the product themselves.

Next is Howard Tullman, a serial entrepreneur who is behind Flashpoint Academy and Kendall College. He fills a void in the trade-professional education.  The purpose and definition of ‘trade school’ has evolved over the past decades. Today, people go to a college level school to specifically study to be a chef, filmmaker or video game developer.  These ‘trades and vocations’ are highly creative, and require specialized training and education, which Howard is providing.

The final panelist is Shegan Campbell, who was frustrated with the quality and quantity of science education for kids, especially before they get to middle school. So he co-founded a business called Kids Science Labs, a location-based business where kids up to 12-years-old can take classes on science in a more accessible and non-academic way. This is to cultivate a kid’s interest in science and how the world works.

IVCA: What do these three different types of approaches to education have in common?

Chow: All three models are looking at the ‘opportunities of education’ not from a political or ideological perspective, they simply saw a problem or opportunity and solved it from the viewpoint of an entrepreneur.

IVCA: The topic of the luncheon is how these entrepreneurs are addressing the gaps in U.S. education. To look at the situation without a gray area, what are the main gaps that can be identified and what is the quickest fix to address those gaps now?

Chow: When you break education down into dimensions of quality, availability/accessibility, cost and relevance, the entrepreneurs I mentioned above are addressing the deficiencies in one or more of these dimensions.  For example, Howard and Neal are filling gaps in relevance, accessibility and quality, and potentially costs – in terms of ROI and value. Shegan’s business focuses on quality, accessibility and relevance.

IVCA: Is there discussion in the entrepreneurial circles about the future of American workers, given what is not working in education presently?

Chow: Let’s put this question in the context of Chicago.  Many people – myself included – believe Chicago is emerging as a digital technology hub for the middle part of the U.S..   For Chicago to achieve and maintain a leadership position in the digital economy, the quality of the local work force will be crucial. Many Chicago entrepreneurs are very involved in supporting and improving education through their businesses or through involvement with non-profit organizations that address issues in education.

IVCA: What do you want attendees to take away from the education topics you will discuss at the luncheon?

Chow: My hope is to not have a ‘how do we change the world?’ type discussion.  It’s just not practical.  I hope the attendees will walk away from the discussion with new ways of looking at education and how it can be improved at all levels from the ‘outside-in.’

To register for the November 13th IVCA Luncheon “How Entrepreneurs are Addressing Gaps in Education,” click here.

IVCA Members: Free
Non-Members: $35