The Network Effect: Techstars Mentor Becomes CEO of a Techstars Company — Q&A with Rob Taylor
This post originally appeared on blog.up.co
We sat down with Rob Taylor, one of the Techstars mentors in Austin, to talk about his experience being an entrepreneur, moving to Austin and mentoring startups. We couldn’t be more excited to keep him in the Techstars family when he recently decided to join one of the Techstars companies, Pivot Freight, as their CEO.
How did you get involved with the Austin tech scene?
As I was transitioning out of TrueCar in Santa Monica in the summer of 2011, my family and I were looking to move out of LA and considered a few geographies - primarily Boulder and Austin. My brother has been a successful entrepreneur living in Austin for 15 years, so it’s always been a bit of a second home for me. I was amazed by the willingness of everyone in Austin to lend a helping hand and get me connected as I executed my job search here. Austin is one of those rare cities where everyone is genuinely interested in everyone else's success, very different from my experience on the west coast. It was through this process I was introduced to the BlackLocus founders, hit it off with them, and joined in the fall of 2011. Frankly, for the first year we were heads down building the business, so it was difficult to find capacity for mentoring and networking. Thanks to folks like Josh Baer and Jason Seats, who really created the center of the universe for startups in Austin through Capital Factory and Techstars, mentoring became more efficient by aggregating the supply of awesome entrepreneurs.
It wasn't until the acquisition of BlackLocus in late 2012 that I became deeply involved in the local community at Techstars, Capital Factory and more generally taking every inbound request for help from other entrepreneurs. Yes, every one. In Techstars language, we call this Give First.
How long have you been mentoring Techstars' companies?
I had the fortune of meeting Jason Seats and Andy Aguiluz when they were making the rounds in Austin to set up the Techstars program here (2 classes ago now). I had been stalking Brad Feld through his blog, along with the progress Techstars had been making in other cities. Why? Because philosophically I am aligned with how they approach their work in a values-driven way - Give First - and how that directive permeates the way that Techstars recruits, markets and most importantly, operates. Everyone I met that was associated with Techstars - from the corporate staff in Boulder, to the local team here in Austin - was a good person first and foremost, deeply committed to the Give First mission, and obviously great in their roles.
I've been a mentor for 3 Techstars classes, 2 in Austin (2013 & 14) and 1 in Boulder this past summer. I'm energized by it mostly because I've made a LOT of mistakes over the past 15 years building companies and my "dark years" were characterized by a lack of ecosystem support and mentorship. I really could have used a program like Techstars back in the day, so now one of my own personal core values is to Give First.
What was it that brought you and Pivot Freight together?
Dan, Carson and Jenny went through the last Austin class this past summer. As a Techstars mentor, you come in for a full day and meet all the teams in back to back sessions. I was immediately drawn to them for two reasons. First, they are just good people. Second, the freight industry is huge and behaves in many ways from a technology and data perspective very similar to automotive (from my TrueCar experience). There is opportunity there and I think it will be fun to figure out where it is.
What are some tips you have for entrepreneurs?
Well, I don't purport to know it all by any stretch, but here are a few things that have rung true for me across several startups now.
- Spend every ounce of your time, energy and capital figuring out who your customer is and what they will actually pay for. Until that is determined with some repeatability, nothing else matters.
- Find influencers in your local market and more broadly successful entrepreneurs that understand your space, and creatively engage them. Focus on creating your own unique ecosystem for success - your investors, mentors, advisors.
- Seek advice and counsel from a variety of folks, but don't let the whiplash stall your own decision making or conviction. This is a cautionary tale of going overboard on my second point. You don't need 100 people giving you advice. You may touch 100, but go deep with a handful.
- Surround yourself with experience, not just outside your company, but inside. That's right, hire your most critical leadership gap quickly and reduce your risk. You don't know what you don't know, hire someone who does. This is a point many will disagree with because these folks are expensive, but if executed properly and the right hire is made at the right time (an art in itself), they will up your game and shortcut or eliminate much risk.
What are some of the biggest mistakes you've seen startups make?
The same ones I've made! The biggest one I've seen over and over is confirmation bias. Developing a hypothesis about who your customer is or how the product should be built or any other foundational hypothesis, then seeking out only information and data that confirms it instead of focusing first on data that would disprove it.
Here's a real life example. At BlackLocus, our original hypothesis was to bring the sophistication that the large, enterprise level retailers had in competitive pricing intelligence & dynamic pricing down to the small business retailers, and help them compete against Amazon. At the time, we had a handful of mom and pop retailers paying $99/month in subscription fees, so we could have said "check", let's ramp our spend and aggressively go after this market. Instead we asked, "What are all the conditions that would render this hypothesis false?" which led us to have discovery conversations with mid-market and large enterprise retailers to understand their pain, how they approached the pricing problem, what tools they used.
What we found is that there was NO sophistication amongst these large companies and only manual, non-scalable tools. The second approach was to look internally at our costs to service customers. It was incredibly expensive to acquire, process and store the massive amount of product data we were aggregating - we'd lose money hand over fist at $99 per month. So, these two important realizations disproved our original hypothesis even though we had confirming evidence in that first handful of paying, small customers.
We immediately flipped our business model on its head and built an enterprise SaaS software business targeting large retailers and quickly closed a dozen or so annual contracts with six figure ACVs for essentially the same product capabilities. Fifteen months later as we were preparing for a Series B, the company was pre-emptively acquired by our largest customer, The Home Depot, a company we never would have targeted or met under the previous model.
Who mentors you?
I have a few folks that I keep close and meet with regularly - one is a serially successful entrepreneur and the other is my best friend, who is also an accomplished entrepreneur. My professional mentor is actually involved in my companies as an active advisor, so he helps keep me in check with respect to some critical decisions related to the business. My best friend is not as involved in the day to day, but he helps me personally. Building companies is hard, not just on you as an entrepreneur, but on all those who love you - your family and friends. Because he is embedded in my personal life, he can coach me through the tough business decisions that impact my family and make sure I'm maintaining some reasonable balance there.
So, one deeply imbedded in my business, the other in my personal life.