Wednesday, October 31, 2012
Accelerator To Exit In 14 Months, With Eli Portnoy of ThinkNear
Story by Benjamin F. Kuo
There's been a sudden surge in accelerator in Southern California, looking to help get startups off the ground and funded. But, do they really help? For ThinkNear, it looks like the whole process paid off in less than two years, after the Los Angeles company went from the TechStars accelerator just last June, to a healthy acquisition by TeleNav earlier this month for $22.5M. To learn more about how the company went from just an idea at an accelerator to a healthy exit, we spoke with founder Eli Portnoy.
Congrats on the acquisition! How did the acquisition come about?
Eli Portnoy: So, we were running campaigns for a bunch of clients, and growing our business. One of the clients we started working with was TeleNav. They started running campaigns with us, and were excited about the performance, and started talking about ways to work closer together. The more we explored business development opportunities, the more it became clear that there was a much broader and synergistic opportunity to combine with what TeleNav was doing. It quickly turned to M&A discussion, and how to make it happen really quickly.
What did TeleNav see in ThinkNear ?
Eli Portnoy: I think they saw a very specific opportunity around location. We have refind our thesis around why mobile is so special, and how it ties into location, and have spent two years working on precise, location targeted ads in the industry. Precision targeting was very attractive to them. Their "Drive To" product provides a web-based navigator, which require no download, and we saw that there were lots of things we could do together to target the right person, at the right time, using a web-based GPS. We can point the customer directly in that GPS all the way to a retail location or advertisers. Because we are able to reach the right person, we can help get them that last mile to the retailer's store.
Were you looking at acquisition, or did it just come up?
Eli Portnoy: We were definitely not looking at acquisition opportunities. We were very focused on growing our business. It's little known, but we were going to sign the docs on a Series A two days after we got the LOI for TeleNav. We were just about to raise our Series A, but because the deal was so synergistic, and made so much sense, we thought it made sense to instead explore that opportunity.
How important was your accelerator experience to getting the company funded and to an acquisition so quickly and off the ground?
Eli Portnoy: The things about the TechStars experience, and the reason why I'm so vocal about the fact that most early stage companies ought to go through a similar program, is they provide two very valuable things. One, is they provide a very condensed period to refine your idea, where you get lots of feedback, and get lots of access to peopel in the industry. It's like a lab where you figure out if an idea has legs in a short amount of time. Once we figured out the idea, and once we launched, it also provided a huge platform, from the perspective of hiring, for hiring, and giving us access on the business development side. It was really great. Using the incubator to figure out what we were doing made sense, and it gave us a platform to launch and have some unfair advantage in building out our business.
What advice would you give to other entrepreneurs, and which you learned from the whole experience?
Eli Portnoy: I think the key learning point for me, was that nothing happens without a lot of hard work. We, as a team, worked harder than we ever had in our lives. We had to push, and believe in building our product and company, and making it world class. That singular focus and dedication helped. The other thing, is I learned you have to be flexible. When you first start a company, you have a bunch of hypotheses and ideas of how you believe the world works. But, you quickly find what you're right and wrong about. You've got to have the flexibility and awareness that you're not going to be right on everything. You've got to know that things are always changing, and morphing. You've got to listen to the market and provide the solution that resonates. We started developing deal management software for xMBs, but when we went out there, and signed up several hundred small businesses to help them figure this out, we found they were not interested in when to run campaigns. We shifted instead to focus around targeting, and at serving, to the right person, at the right time. After we made that shift in our focus, everything got easier. We had more customers, and more repeating. Everything got easier. Having that humility to understand what is working, and what is not, was a key to the process.
Thanks, and congratulations!