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Steven Plappert and two co-founders, Andrew Busa and Chris Pierce, started an online fantasy sports company in 2013 called FantasyHub. The company saw early promise and growth, moved to Austin, TX to join the TechStars accelerator program, and even attracted $1.1 million in investments. However, due to issues in the industry as a whole, FantasyHub eventually shut down and sold parts of their operations to another fantasy sports company called DraftKings.
In the world of startup companies, you learn more from being in the game than you ever could from reading any books or even earning an MBA. So, the experience was a fantastic learning opportunity. Steven is now back in Louisville, sharing his experience with our local startup community. He’s also back in the game with a new startup called Forecastr.
In this episode of the MetroStart podcast, learn how Steven got started as an entrepreneur, how he funded his previous company, and what he has learned from his entrepreneurial journey. Also learn what’s happening with his new startup and where they’re going.
Transcript (Machine transcribed, so please forgive the typos.)
Alan: 00:02 Hey everybody. Welcome to the MetroStart podcast. This is Alan Grosheider. On this podcast I talk to local entrepreneurs about how they got started, about their ups and downs, and about anything else that might help other entrepreneurs. Today I’m talking to Steven Plappert. He started a company a while back called FantasyHub, and he’s currently the CFO and in business development for a company called VentureFirst, and is building another startup called forecaster. Hey, Steven.
Steven: 00:28 Hey Alan. How’s it going?
Alan: 00:30 Good. Does that, did I say everything right there? I said, is that accurate?
Steven: 00:34 Sorry, I’m, I’m not the CFO of venture first. I’m in the finance department, so I do operate as an outsourced, uh, head of finance or CFO for a lot of our client companies, but not a venture first proper.
Alan: 00:46 I got you.
Steven: 00:46 Other than that, you’ve got it perfect.
Alan: 00:48 I understand. Did I say Plappert right? You did. You did. All right. Everybody butchers, my last name is pronounced “Gross – Hider”, not “Gro – Shider” you know, so I’m used to, so anyway, let’s talk about kind of how you got started. I love finding out what people, you know, when people kind of got the entrepreneurial bug. And I’m always interested in finding out what, what got you started at a young age. Were you entrepreneurial as a kid?
Steven: 01:19 Yeah, I’d say so. I was definitely entrepreneurial is that give, but I don’t think I used that term or knew that I was, if that was, you know, I mean I, I was very curious. Uh, I was always very independent. I was kind of uh, do my own thing kind of guy. And I always asked a lot of questions. So I think at a basic level that’s kind of the entrepreneurial mindset, you know, you want to asking questions, solving problems, being kind of a self starter. Um, and actually my father was an entrepreneur and still today as he’s owned his own business for the last 20 years, uh, somewhat paradoxical. I didn’t really view him as an entrepreneur because again, I would, didn’t really have a lot of exposure to that world. So I didn’t really see him as a, as a founder, if you will.
Steven: 01:59 I just saw him as I just said, hey, you know, I Know Dad dad’s got his own thing. Uh, but that’s all I really, really thought about. And, uh, when I went into, when I went into college, actually wasn’t planning on starting my own business at all. I wasn’t even on my radar. Uh, I was always kind of a math nerd growing up and that was always my forte. So when I went into college I was like, well, you know, I’m good at math and I want to make a good money so you know, what’s the profession where I could do that? And I looked at, I was actually considering being an actuary as funny as that is to me now, cause I would never do that anymore. Um, but that was a, that was what I thought I wanted to do first. And then it kind of slowly devolved from there. As I got older and went through college and just became more mature and kind of gave me more critical thoughts with that life path, I wanted to take it slowly steered more and more away from kind of a big corporate environment and more and more towards the sort of startup environment.
Alan: 02:53 Yeah, let’s, uh, you know, I kinda, my background in, I got a degree in mechanical engineering from Purdue and it was kind of the same way. I just, I was always good at math and I sorta thought I didn’t, I didn’t really think about being an entrepreneur, but I w I wanted to do something that seemed like it made, you know, I could make money doing it. And something I always recommend for my daughter and any, I think anybody who’s a young student or whatever that might listen to this is that you really, you’ve got to pay attention to what things you really enjoy doing. And I wish I had done that at an, at an earlier age. Well, not, I’m glad I got an engineering degree. I mean, that’s never bad to have on a resume, but it’s, you know, I never spent any time thinking about what do I really enjoy doing? I just thought, okay, engineering, I’m good at math makes money. That’s it.
Steven: 03:42 Yeah, exactly. I actually have a similar, you know, had similar story and now I have kind of a three-pronged paradigm where it’s like, um, you know, what’s you’re good at, what you like to do and what people will pay you for or the three prongs of the triangle essentially. And, and if you do what you like to do and when someone pays you to do, but you’re not good at it, uh, you’re, you clearly won’t have a job for very long. If you do what you like to do and what you’re good at, but no one will pay you for a while, then you know, you don’t really have a job. And if you do something that you’re good at and something that people will pay you for, but you don’t like to do it, uh, then you’re just kind of on a course to burn out. So I think you really need to have all three of those prongs, you know, represented in a job. You need it to be something that you’re passionate about, something that you’re good at and something that you can make money down.
Alan: 04:32 It’s so hard to find that combination too. It’s um, because it seems like so many stable jobs where you make a lot of money. You, you mentioned actuary, that just sounds horrible to me. Nothing against anybody out there who’s an actuary. But, um, something where it’s just so many boring jobs out there. And For me, being an entrepreneur, I love the roller coaster of being an entrepreneur. Uh, but you know, it’s just not for everybody, but it’s so hard to figure out what you really enjoy doing in and then move in that direction. I guess it’s just more of an iterative thing where you, hey, I enjoy that. I’m going to take a step in that direction. And then,
Steven: 05:15 yeah, I think so. And I think to your point, it’s one of those things where that, that piece of it is the piece I think people don’t think about as much. You know, people often think about, well, what am I talented at and what can I get a job doing? And that’s usually the approach and maybe not as much what do I like to do? And, and I think that, yeah, that’s something that all entrepreneurs, you know, do have that mindset around, uh, you know, not just stopping at what they’re good at and what, and what people will pay them for. And I think people, you know, one of the things that I tried to do, you just kind of with my friends and folks that I know and that kind of thing, it’s just empower them to realize that, you know, really like you can get a job doing almost anything.
Steven: 05:51 And if you really just think about what you like to do, there’s a way into that world. You know, a lot of people kind of assume that there’s more red tape or barriers and there actually are, or they say, oh, well I don’t have a background in that, or I didn’t go to school for that. And, um, you know, it’s really just kind of an artificial barrier. I think you can really bust through those if you just have the right strategy. If you can just know how to break into those worlds, I think you can. So I would try to influence people to really kind of go after that.
Alan: 06:19 Well, you just, you gotta ask and you know, that’s one of the things that, that have found in life is you just ask, ask, ask, ask for what you want. And then eventually somebody tells you where to go, where to go to make it happen or at least get closer. And I think so many people are afraid to just say, hey, I like this. And then ask somebody how to get there. But that’s a good,
Steven: 06:38 yeah, exactly. You know, if you have, if you have a job that you want to pursue or you want to do, I mean go find somebody doing that job and ask them out to coffee. And to your point, ask them, hey, are there any opportunities? Can I work underneath ea? Can I do this? Gotta do that. Like you said, make that ask, I mean, people, people send a lot of times and say, well, I’ll just look on indeed and you know, whatever there is there is. And I think that that personal approach of approaching people, building a relationship, one-on-one, asking for what you want has lots to be said for that.
Alan: 07:09 Yeah. And these days with Linkedin it’s a lot easier. You can kind of sniff out who you want to go after and ask them. Often my brothers had gotten several jobs that way of just like, you know, nailing people on Linkedin and asking if they want to go to coffee. And next thing you know, he’s got a job. So how did you make the transition then? So you went to UK, um, what uh, did you do anything entrepreneurial? Were there any influences that UK that that made you more entrepreneurial?
Steven: 07:38 No, not really. I mean, not at UK specifically. So my basic trajectory was like, you know, I went in thinking I was going to be an actuary after the first year. I started interviewing for some internships that summer and I kind of realized just through meeting a bunch of actuaries and those interview processes that just wasn’t going to be a good fit for me. Um, and from there I kind of steered more towards portfolio management. Uh, I wanted to be an equity analyst and eventually a portfolio manager for funds. So I took a level one of the CFA exams, which is a finance exam. And I passed that and I started doing some internships there and I liked that a lot more. Uh, but it was just a kind of a stuffy environment, very structured. Uh, so, you know, I, I didn’t like those aspects of the culture, uh, and that, so that started steering me in that direction, but it really wasn’t until, uh, my eventual cofounder and one of my best friends, Andrew Bussa, um, came up with an idea for a company and brought it to me, which is like a kind of in the butt end of our senior year in college.
Steven: 08:40 Uh, you’d come up with the idea for fantasy hub. And he actually approached me because he was entering a pitch competition and he needed a set of financial statements and you know, I was good at finance. So he approached me about it. Then I started asking him questions about, well, you know, what have you spent money on and have, have you generated any revenue yet? He’s like, no, you know, we just have an idea. And I was like, well, Andrew, I mean, you don’t have financial statements yet. I mean, unless you have any cash flying in and out of the business, I could just produce a blank set of financial statements for you. But, but you have no historical financials. And uh, that just kind of ultimately led into us talking more about the business. And I thought it was really interesting and uh, you know, it seems like something that, uh, that kind of like sparked this idea of, Oh wow, maybe you could just go out there and start your own business and create your own job.
Steven: 09:27 And it just kind of like my curiosity just took over from there. I started thinking a lot about, it seems like a really great kind of a approach for me. And we as we eventually just made the decision, well look, I mean, let’s try it. Let’s try and get it off the ground. And if it would be fall flat on our face three months later, well, no harm, no foul. You know, we’ll, you know, the big corporate jobs are always going to be there. Um, so that’s what we’ve started doing. And, uh, three years later, uh, you know, we were, we found ourselves stowing the company. So it was a, that was kind of a wild rot.
Alan: 09:56 So what was the process of getting started? Wait, you know, I think that’s a lot of what causes a lot of people that hesitate is where do I start? How do I get started? And it just seems so daunting to think of all the things that need to be done. Um, what, what was the process? What do you, kind of a cliff notes version of how you got it gone?
Steven: 10:20 Yeah, great question. And I think you’re totally right. Uh, you know, for us it was a first a matter of just kind of Andrew and I get in a room and just kind of like sitting, you know, sitting down and thinking through the business and just kind of structuring out, okay, what do we want to do and what kind of product do we want to develop? And just kind of thinking about a lot of things and kind of a war room like setting. And we did that kind of in our nights and weekends as we actually were, were, uh, we worked retail jobs, we worked at justify bank over in the summit, now panic shops. Um, so we were doing that and once we kind of framed it up enough to where we said, okay, like we kind of see the product we want to build and kind of have enough, uh, you know, enough of an idea about what we want to do.
Steven: 11:03 Uh, you know, we were fortunate enough to go to our parents and say, hey, you know, is there a, is there any kind of a, you know, kind of a character alone. A few will, uh, that you could provide to help us kind of launch this business. And, uh, both my family and Andrew’s family put in $25,000 to, to kickstart the business. And, uh, once we had that capital, we still kept the jobs that just a bank, but we were able to deploy some of that to a development team to start to build the software product and kind of put that early version one of the product together that would allow us to get a little bit of attraction and hopefully raise some additional capital. Um, and we tried that, uh, ended up being that the firm we went and used and the development work that was there was just really not up to snuff.
Steven: 11:47 So what we thought we were going to get for that money, uh, we didn’t get that. We got a lot less and we ended with a phone product that was completely nonfunctional. It was really just like a, a front end prototype. Um, but we were able to leverage that prototype and to get any additional capital from a national based investor named Kevin Johnson. He put it in another 50 k and then with that 50 k and, and the knowledge of what not to do, I mean, just learned from this one, from, uh, we went with a firm and, uh, Cincinnati called differential that built this a really great first version of the product. And at that time when we got that product bill, Andrew and I, uh, along with our, uh, additional co-founder crispier so we added on, we’re able to go on a full time then and really start to kind of build out the business.
Steven: 12:34 We raised a little bit more capital, so, you know, cliff note version for us, it’s kind of a chip and charge approach. I mean, uh, you know, we’ve raised a little bit of money that a little bit of development kind of got the business up and going a little bit and, and uh, and just kind of went back and forth like that. Um, I think we’ve made a lot of mistakes and didn’t do it in the right way. It certainly not the way I would start a business today. Um, but that’s how we did it then.
Alan: 12:59 You know, and it just hearing some of the, the steps that you took there, kind of validate what, what, um, what we’re trying to accomplish with metro start, you know, that, um, a lot of what we’re trying to make happen with metro start is, is to set up the mechanisms that make it easier for a local startup to, you know, maybe they could raise that 50 grand that you raised from 50,000, you know, 50 investors who each put in $1,000 instead of, you know, tapping your parents or whatever. Cause so many people would not have been able to do that. You know, and if you’re, if you’re lucky enough that you, you’re able to do that. And um, and you know, and there’s a lot of people are, and a lot of people aren’t. So it doesn’t necessarily, you know, I think there’s a lot of people who have good ideas who, who can’t get that first start. And that’s one of the things we’re trying to do is make that, you know, the mechanisms are available now legally to, to raise capital that way. And that’s what we’re really shooting for.
Steven: 14:00 Yeah. And I think that makes a lot of sense because you’re totally right. I mean, access to capital is somewhat of a necessary thing when you’re getting the best off the ground. Doesn’t have to be a lot of capital, doesn’t have to be half a million, million bucks. Like you said, it’s going to be 50 grand like we brought in. But a lot of people don’t have that immediate access to capital in traditional sense of like getting it from your family or friends or having it personally, that type of thing. So I certainly think that uh, opening up other avenues like that since like you said, it’s structurally available now. It’s a really, really good idea. And the other thing that we didn’t do at the time and then now is the way I would do it differently and also suggest people to do is really like, you know, go find a good solid paying job in the corporate sphere or some kind of world where you can make enough money to where you can bankroll yourself and maybe have a little bit leftover and just start to put a little bit of that towards the business, you know, and just keep that job, do it in the nights and weekends until you can really get it to a level where it’s truly an investible, fundable project and then raise some money behind it.
Steven: 15:01 You know, I think I’m inside 2020, rather than working, you know, for not enough money adjusted thing. I had a degree in mathematical economics from the University of Kentucky. I mean, I could’ve just gone and got a job in finance. I’ll be making 55, 65 70 grand and uh, and been able to put some money towards the business. I just didn’t think about it in that way. I think doing it on the side and you know, doing that for a long time, like as another founder here locally and most loan who’s done a really good job of that with, uh, with, um, uh, what’s it called? Easy Chow. And I think it’s really interesting, you know, just being able to do it on the side like that and get it stood up. Um, I think that’s a great, great approach. So
Alan: 15:42 what a th that’s a good point. Cause I’ve heard you hear a lot of investors, you know, that, that I think sometimes the, the, the, the angel investors who have, have sort of picked up buzz words and phrases from, you know, the internet or whatever or seeing or watching different, you know, shark tank or something like that, that they’ll say, well, oh, well I wouldn’t invest in a company unless you’re full time. And, uh, I personally, I think that’s a really smart way to start a business, is have a job that allows you to pay the bills, try to find a way to raise the first little amount of capital that you need and then, you know, get it started in a way that doesn’t put so much pressure on you that you’re in a panic because then you make bad decisions, you know, so start it in a way that allows you to comfortably prove your concept without feeling like you’re gonna Starve to death and
Steven: 16:39 in that runway three or four x, because you know, you’re subsidizing the biggest cost of the business, which is the people cost. Uh, I, you know, from a corporate salary or whatever salary, whatever, whatever job you have, I mean, you’re, you’re taking that line item off of your startups p and l, so that just makes it a lot easier.
Alan: 17:01 Yeah. So I think, you know, until you know, new entrepreneurs just don’t, don’t let that, don’t let somebody tell you that you’re not a real business if you’re doing it as a second business or you’re doing it at night or you’re doing it on the weekends, you know, that’s how there’s a little, there’s, there’s, you can Google and find a lot of really good examples of big, big companies that started exactly that way. Right. So how did you find that? How did you find that investor that you said something about an outside, it was somebody from out of town. How did that happen?
Steven: 17:31 Yeah. Yeah. So it was actually a friend from college is a guy named Steven Stearman. He was a friend of mine from college and he knew about our business. He knew what we were doing at fantasy of what you’re like a daily fantasy sports platform. And he had a mentor of his that had been a business mentor of his, and this guy was really, really ended daily fantasy sports. So you just kind of loved it as a, as a customer, as a user in the space. And really knew the fantasy space well. So, uh, when he heard the, of a startup that he might be able to, you know, put some capital behind, he was really interested and Steven connected the dots between not seeing Kevin. And we sat down and got to talking to Kevin and we both really hit it off. He thought our strategy was found and he thought that, you know, we could really, um, you know, take a crack at it.
Steven: 18:14 So he was willing to, you know, put up some of that early capital. And, uh, I was really buying all capital too, cause we were, you know, without, I think without the 50 k that he put up, I think the company really would’ve just died right there. And then before it really hasn’t gotten started. So that there was that 50 k that allowed us just to, just to make it to just that next milestone where then we could get another 60 k and that 60 k came from. Uh, I, uh, the father of a guy that I, that I knew in middle school actually, and, uh, an instruction honor is, is John Schottische brother and a co owner and Heinie brothers who are locally and, uh, he put up 60 k that just like Kevin and get us to that one next milestone. And for us, that next milestone was getting into techstars.
Alan: 18:57 Oh. So that, you know, and I, I think that’s also a good point on raising capital is it, it typically, it’s not you talking somebody into something, it’s you having passion for your product and finding somebody else that understands it and has a passion for it too. You know, cause I’ve, I’ve, I’ve hit had stages in my life where I thought, um, I just got to talk people into this, you know, and it doesn’t work that way. It’s more like, um, you gotta get out there and find the people who are interested and you may have to talk to a hundred different people before somebody makes an investment, but when they do [inaudible] make sure you find somebody that is excited about what you’re doing and they get it and they like you, they trust you and they’re, and they’re ready to, you know, they’re excited about it. So,
Steven: 19:46 yeah, exactly. And you mentioned trust. I think that’s actually the biggest thing when it comes to fundraising. That’s what, you know, venture first. We help lots and lots of entrepreneurs raise early capital and so we’re pretty good at it over here. And that’s the number one thing we tell people is that that’s the thing that gets overlooked the most. I mean, people talk about, oh, we need to find these investors and just make this pitch and they’ll give us the money. And Trust is the operative word. Yet you’ve got to build trust when it comes to raising capital. And that easiest way to do that is certainly through your personal network. I mean, if you look at the story of fantasy hub, obviously our parents trusted us and so they were going to invest. Kevin came to us, referred from a friend. He trusted us.
Steven: 20:25 Uh, you know, Chuck Schneider came to me, you know, he knew me since I was a little kid. He trusted us, you know, so it’s all about that trust. And for founders that are out there raising money, that trust takes time. I mean, if you don’t have these personal network relationships that you can go to, you’ve got to start building trust early and often with investors, uh, in the way that that really happens is setting up those meetings and building those conversations, building those relationships up before you need money in how, I mean, go out and start, you know, go to investors just saying, hey, this is what I want to do. This is my business. What’s your feedback? What’s your advice? You know, get them on a monthly update list and start building that trust over time so that when you do need that 50 or a hundred k to to really take things to the next level, you’ve already got kind of a warm group that you can go to and say, hey look, you’ve seen what we’ve been able to do. Now we just need this, a little bit of capital to do x and y.
Alan: 21:15 When you mentioned a monthly update lists, I think that’s something that, you know, entrepreneurs should write down and remember to do. Cause that has been really useful for me in raising capital is having, uh, sending out a monthly update and just continuing to find people that want to be on that list. Um, because what I’ll find is though, yeah, I send out a monthly update and I try to, you know, just talk about exciting things that are going on with my company. And, um, and somebody, it’s almost often it’s, it’s people that would never in a million years have expected to invest that show up and invest and they, they get a monthly update and they’re like, okay, I’m ready now. You know? And, and all of a sudden somebody that I haven’t talked to you for 30 years is, is sending me a check, you know? So,
Steven: 22:02 yeah, exactly.
Alan: 22:03 That’s a good point. Monthly update. Um, and just networking with talking to the more people you talk to, the, the more suggestions you get and it leads to somebody else. And six degrees of separation, all that. So how did our, our local startup community factor in to your, your development?
Steven: 22:23 So not a lot of, for fantasy I, but that wasn’t their fault. It was mostly mine that, so when we started fantasy have I was pretty naive and young and, and didn’t really see the value in connecting and doing a lot of that, uh, community building early on, uh, that we were kind of heads down. We stayed in our apartment and then office all day and, or, you know, pretty much around the clock. And, um, had a really bad strategy of, to be frank when it comes to all of it. Um, and I just, cause I just didn’t know any better and it just didn’t, it didn’t immediately make sense to me how I was getting out and engaging the community would be helpful. And, uh, it wasn’t until we went through techstars and moved down to options, xs that they kind of beat that into your head.
Steven: 23:03 They look back. In fact, building a company is all about network building. It’s not just an important thing. It’s the most important thing that you could be doing. Um, so you need to do it early. You need to do it often. And you know, businesses are just, businesses are just subgroups of people, you know, I mean, people are what drive any business that would drive any accomplishment or anything really. Um, so you need to, you need to meet a lot of people and engage them. And it wasn’t until we moved down to Austin, unfortunately, that we kind of made that epiphany. But once we did it totally changed the business that helped pass you have a lot. And, uh, you know, now and starting my new business forecaster, it’s been instrumental, I mean 12 months ago when we first came up with the idea for forecasts or we set up hundreds of meetings with different people around the community and sat down with everybody.
Steven: 23:46 I know, we sat down to Allen and talked about the company and what we’re doing and what the strategy is going to be collecting advice, putting people on this update list. We got over 250 people on it at this point. To your point, we’ll be sending one out. Today is the 1st of August and I mean doing all that community building now has been night and day for forecaster. I mean groups like leap and other groups here locally have been really supportive of the company and we’ve got a lot of good advice from investors and founders and mentors. Um, you know, it’s been a total night and day difference. So, um, you know, learned it a little bit too late to say about say fantasy hub, but, uh, you know, definitely logged that log, that memory. And I’m using it to good use here at forecaster.
Alan: 24:28 Well, I think that’s a good point of, of why, you know, if somebody who started a company or two or three, you know, you get better every time and you know, certain things are still really hard, but it’s, uh, you, you kinda at least know what things not to do and have a better idea of where to start and things that you should have done a different way the first time. So, um, I’m glad to see, you know, anybody who’s, who started a company, I think our community only improves by somebody who just keeps starting companies, you know, whatever happens to the last company, whether it’s a huge home run or not, it’s, um, it’s great to know you’re, you’re the best guy to start a company, you know, if you’ve done it before.
Steven: 25:14 Yeah, exactly. I mean, cause when you, when you first start warning, you just really don’t know what you don’t know. And, uh, and so it stuff, it’s just like anything you’ve never done before. I mean, you just, it’s one of the things where you can certainly, you could and should engage a lot of mentors early on and learn as much as you can from them, but there’s a lot of it, you just got to learn on your own. And I mean, there’s a lot of it. You just gotta learn through experience and learn by doing and yeah, I mean, I, I’ve found that starting your second company is way easier than starting your first. I mean, you just, you just have a way better mind for how to do everything. And so from a strategic perspective, you know what to focus on and when and how to do it. So, yeah, that’s a really good point.
Alan: 25:52 So how’d you get into techstars and how was that experience?
Steven: 25:56 Um, so we got an a techstars just kind of by brute effort. We applied three times for the different programs were denied twice. And the third time we finally broke through. Uh, we were one of, you know, 1500 companies to apply for the Austrian program. We, the only one of the lesson that was selected. It’s very, very, uh, you know, uh, kind of a competitive to get into these programs where the first Kentucky Company to get into Tech Stars, which was school. And, uh, it was a amazing experience. I mean, techstars is a really, really world-class group. Uh, they taught me much of what I know about starting companies. I think I owed them a lot. And in terms of what we were doing well to do with fantasy up, I don’t think we would have gone anywhere near as far as we did without techstars.
Steven: 26:40 And then frankly, I don’t think I be where I am today starting forecaster and the entrepreneur than I am now without tech stars. You know, I mean, before tech stars, I just didn’t, I didn’t know so much. Um, and the key to tech stars is really their network and they surround you with an enormous group of really, really talented, uh, founders and mentors. I mean, there’s people that have started, companies had success, had failure. They’ve just been in the trenches for a long time and they just, uh, they just connected with all these people and they have a very good first mentality and these, all these mentors help you out. And so you learn so much from these people and you learn about all the nuances and things that you wouldn’t know unless you’re starting to company things like how to raise money, you know, how to engage and network, how to hire employees, how to fire employees, you know, how to deal with issues amongst co-founders out of grow, how to track metrics, you know, all these types of things that are fairly nuanced. They just do a really, really good job of coaching you on it, teaching you on it, connecting you with people who know how to do it. Um, and so it’s Kinda Nice night and day for us. I can’t say enough good things about techstars is, I mean it really is a phenomenal group of people over there.
Alan: 27:51 Cool. Yeah, I’m really glad to see them involved with leap and you know, the, the efforts that are going on here locally. I’m excited about all the stuff that’s going on with our startup community. I think for the, especially the size of our city, our startup community is, is doing some really cool stuff. Amazing.
Steven: 28:06 Yeah, I think so too. I think we got a lot of opportunity as for share and I’ve seen that just from, you know, living down in Austin and Austin was one of the fastest growing and startup communities at this point and that’s a really big and kind of starting to enter into more of a mature phase. And when I was down there and I just kind of felt like a drop in the ocean, so to speak, it was really great energy to so many great people down there. So many great programs and everything going on. But um, you know, you don’t really feel like you can move the needle too much. Uh, but that’s what I like about Louisville. Like you said, it’s a smaller city. Uh, the ecosystem is still fairly put together for the size of the city and there’s still a lot of opportunity to get in there as an entrepreneur and really make a difference, you know, stand up an event or, or, or connect a couple of founders. I mean, doing those types of things makes a material difference for the startup community here. So that’s kind of what I liked about it and frankly, one of the reasons why I moved back home. Let’s just go about like kind of the, you know, lending a hand and being a part of something and growing something.
Alan: 29:05 Yeah. So what was the then, what was the arc of fantasy habit? Where, where did things go?
Steven: 29:13 Well, so we uh, we got into techstars at that time. We maybe had about 10,000 users, maybe one to 2000 of those that were weekly active. So we had gotten some traction but still had a long way to go. Uh, we went through the program, we had a really big, um, really big kind of a event around March madness cause we were the daily fantasy sports platform and we worked with athletes to run games to raise money for their charities. So we did this bracket challenge. It was really successful for us and that was like right along with techstars. Techstars taught us all this stuff and that now these people, we raised just under a million bucks after the program. So this was like a summer of 2015 and we ran that all the way through the football season. By the end of the football season, we did over a million in wagers in December.
Steven: 30:00 Uh, and we had gotten just over the hump of raising $250,000 for charity on the platform. We were sitting at about 40,000 users, about three or 4,000 weekly active users at the time. So we really have gotten really good growth and had been grown at a good clip, but ended up raising, or sorry, we ended up running out of money. Uh, so right along that time when we were growing house around the same time that most of the attorney generals around the nation started to come out and speak against daily fantasy, uh, as something that might have been considered gambling and something that might be regulated or perhaps shut down as, uh, as you might expect that that spooked a lot of investors. So investment in the space kind of screeched to a halt. And, uh, we weren’t in a position to be profitable. We weren’t really planning on that at that sign or with a part of our strategy that’s really hard to be profitable early on.
Steven: 30:49 And that casino environment, you really have to build a lot of quiddity first. So, uh, we weren’t able to stomach the lack of, of raising another round and ran out of cash. So we ended up selling the users to drafting and we sold the technology to a startup in the space. And that goes back to that network game. I mean, you know, we had built a network with our competitors, with draftkings and with the startup, which might be counterintuitive to a lot of founders cause he might say, well, why would I want my competitors knowing what I’m doing? Uh, but if you build a relationship with them, then in a bad scenario they can be your savior. And even in a good scenario they could be require. So it makes a lot of sense to build relationships with competitors and you just gotta be careful about what information you disclose and that type of thing. But we were certainly advised well through techstars and uh, yeah, that’s what, that’s what, uh, shaken out the end of the day.
Alan: 31:38 Well that’s pretty cool that you mentioned that cause I’m in that situation right now or from my, my day job company, we looked at 22. I’ve got, you know, and some, some, uh, a big company that has reached out to me that they’re, they’re not really direct competitors but it, but I’ve kind of, I’ve been leery about it, but it’s a good timing and interesting that you would, would say that. Um, so I actually have a call.
Steven: 32:02 Yeah, it can be a little nerve wracking. Yeah, no, I know when we first started meeting now with drug trafficking, stuff like that, I mean it’s such a big player. I mean, they had, they had just raised $500 million earlier that year and we were this teeny little startup. So I was like very nerve wracking to go into those conversations and just kind of be the, the little guy in the room. Um, but also very eye opening, you know? And it’s strange how humans work. That’s just one of the things where, you know, even though you are competitive, uh, you know, good natured people are good natured people. And so when you sit down in a room together, uh, there’s a lot less animosity than you might expect. And, you know, like I said, you don’t share everything. You don’t give them the secret sauce, so to speak. You can be cordial and you can start to build a relationship. Uh, I’ll, I’ll be at, at arm’s length and, um, you know, that’s all it takes.
Alan: 32:47 Oh, cool. So then, uh, what’s w what have you done since then? What was your, a path to where you are now?
Steven: 32:55 Well, I uh, I moved back home when, when, when, when we shut down fantasy of, and I did a year of working part time for a variety of startups, doing a lot of financial forecasting, cashflow management, kind of operating as the head of finance and then doing some business development work for them as well. Uh, one of those companies was venture first. I started part time of venture first as well as a slew of other companies. I did that for a year and then a actually took a six month hiatus and I went and did a through hike of the Appalachian trail.
Alan: 33:24 No, it was my girlfriend
Steven: 33:26 I picked up from uh, Georgia domain, which is a very interesting experience for me and a very rewarding and it was exactly what I needed, you know, kind of coming off of the stress and the anxiety that starting and failing a company kind of induces. Um, so that was really cool. And then when I got back from that, it was kind of the butter end of 2017 I joined fantasy, or, sorry, not fantasy, but I joined venture first full time at that point, the venture versus as outsourced a Finance Team here in Louisville, Kentucky that works with high growth companies. And uh, I joined full time with the company late in 2017 and I’ve been here ever since. We’ve been, uh, you know, operating again as an outsource finance team, helping people with financial forecasting and cashflow management. We hope with raising capital, uh, you know, anything that a CFO or, or, or financial analysts would do.
Steven: 34:14 We’ve been doing a lot of fun doing that and that’s how we came up with this new company forecast or I’ve started building a bunch of excel based financial forecasts and ultimately realized that the process is very systematic. That it’s something that we really thought we could turn into a platform and we realized that there’s a lot of pains and problems when it comes to startup founders trying to create their financial forecast. They usually don’t like excel. They usually aren’t really capable of actually building a model and excel. And so either have to pay a lot of money to an outsource provider or use some kind of canned template online that doesn’t fit their business and user experience is really, really bad there. So we just kind of found that out through grinding it out and ended up coming up with a software platform that we think is really interesting that we’re kind of in the process of just launching now. We’ve been working really hard on it for the past year and apex offer as a Dev shop at Lexington. They’ve been building it and we’re just kind of coming towards the end of that engagement now and rolling the software out there on the financial model that,
Alan: 35:16 how did you, um, so how did you get that one started? Was it, did you need to raise any capital or, you know, what was that process?
Steven: 35:24 Yeah, so venture first was really helpful on that. So Logan and I and Logan’s my co founder, he also works here at venture first. We came up with the idea kind of March of last year and we should, first thing we did, I wish we didn’t do it all at emas, just do customer discovery. We just set up a bunch of calls with other entrepreneurs. We ask them how they do their forecasting now, what they like about it, what they don’t like about it, what software is they pay for and the kind of finance, analytical vertical. And we did a bunch of these conversations. We really validated the concept and then we brought it to venture first and we said, hey guys, look at, you know, we’ve, we’ve come up with this idea something we think is really interesting. It’s something that we think can be really beneficial to venture first in the sense that it’ll serve companies before they’re ready for venture first.
Steven: 36:05 You know, a lot of companies can’t afford venture verse. So we can serve all those companies, we can help them get there. Uh, and then we can really be a really good efficiency tool because, you know, if you’re an accountant, you get to use quickbooks, an online platform that automates a lots of stuff. If you’re a financial analyst and you’re trying to forecast, you’ve got to use excel and you’ve got to do everything manually. So we kind of brought that up to venture first venture versus really, really positive about it. They really liked the idea and they decided to partner with Asana. So they put up some cash to get the product to market. So they’ve actually funded the company today, which is super cool. And they’re even a, they’re even allowing me to split my time now. So now that the product is getting ready to get out there and we’re starting to get the fundraising gears turning, uh, I’m able to spend Tuesday, Thursday, Friday, just working on forecast or a, and I spend Monday and Wednesday, uh, you know, keeping, you know, keeping things going and adventure first. So, um, they’ve been instrumental and kind of getting the company off the ground and uh, that just goes to, you know, kind of what we were talking about at the beginning. It’s just finding those ways to work it out to where you don’t have to quit your job and raise a bunch of money to get it started. You know, finding ways to work either with your employer or work on the side, uh, to get things off the ground.
Alan: 37:15 Yeah, I think that’s a great point cause there’s, you know, if you ask, there’s, you never know, you never know what is going to come about or who’s going to help you. And um, I think that could apply to a lot of employers that, that um, you know, there might be something that that could be their, you know, the investment. I think the bigger the company, the harder that is. But you, but you are seeing a lot more corporate vcs now that are, that are investing in companies and you know, but I, I don’t know. I guess it’s just, just asking, asking around until you find the right solution is how to make an app. And so
Steven: 37:53 I think so, and I think the corporate spinoffs are a really big deal. I mean, when you really look at what made Silicon Valley what it is today, it all really got started with corporate spin as, I mean there was a time when there really wasn’t a lot of startup activity in silicon valley and these bigger companies, they found a semiconductor companies and things like that started spinning companies out. Um, and it was really that process that really kind of kickstarted this flow. And uh, you know, a more at home example is look at national. I mean the reason why Nashville startup community is so much more developed than local is because HCA did a great job of spinning companies out all over the place and Humana really didn’t do that. Uh, and it really hamstrung the growth of the local startup community. So corporate spin outs are a really big way drive growth.
Steven: 38:35 And we certainly understand that adventure first. That’s why venture first is so supportive of doing that forecaster. Actually isn’t the first company that they’ve spun out. We spun out a fund called whiskey capital a, you know, a few months back. And, and uh, that was really the first and, and now forecasters. So I think, you know, for folks that have corporate jobs and want to start companies, I mean, if it’s, if it’s related to the vision of your, of your steering company, don’t be afraid to bring that up to the, to your boss and say, Hey, look, you know, this is something I want to do. I think it can really be additive to the company. And uh, and you can spin it out and you give the corporate, you know, a percentage of equity, you know, just like venture first as a, as a has a seat on our cap table and that’s beneficial to that company. I mean, you know, I mean, that’s, that’s Kinda how it works. So I think it’s a great strategy that really goes under utilized.
Alan: 39:20 Yeah. Well, and for them it’s a great strategy because they already know you, they know they can trust you and everything. So it’s, I think it’s a great strategy for everybody. The, where do you go from here? What’s the, are you guys going to try to grow organically? And then what’s the next steps?
Steven: 39:37 Yeah, so you know, we’ve, we’ve done this kind of little, little early capital gone in and we’ve got to, we’ve got to be one of the products that is available on financial model Io. So if you go there as an entrepreneur, you can create a financial forecast for your company, uh, which creates a set of financial projections. You can answer questions and kind of input in and, and make your assumptions and basically we project your revenue, we project your expenses, all that kind of stuff. All that’s available now and financial model about Io, it’s completely free. So we have a premium strategy. We’re offering this free basic version of the product now. That’s what APAC software has developed and that’s what we’re really getting early user traction and feedback on right now. Uh, in parallel to that process for getting the fundraising gears turning on the round.
Steven: 40:22 So we’re going to be raising 600 k sometime later this fall. We have an open, the round are kind of started the raise as as of yet we’re just kind of collecting feedback from investors as well and, and taking folks temperature. So we will be raising capital to really kind of, uh, get this thing off the ground. And that’s the next step. I mean, it’s getting people on the free platform. It’s getting this money in the bank so that we have 18 to 24 months of runway for me and Logan as well as two developers. One of which we’ve identified these. Uh, he was actually my UX developer at fantasy of his name is Steven Ams and we’re still looking for that fourth developer. So if there’s any developers out there that know a python or node js, please do shoot me an email, Steven, a financial model about Io. But, um, you know, it’s putting that capital in the bank. It’s getting early traction. We need, it’s finding that fourth person to join the team. Um, and then it’s really just a going out there and growing the top line.
Alan: 41:15 Nice. Well, I’m glad to see you, uh, back in the entrepreneur saddle. And, um, making some stuff happen. I know that, uh, you know, a lot of people are glad to have you in the entrepreneurial community. I always hear good things about you, so I’m glad we connected. I appreciate you being on here. Is there anything you want to say to budding entrepreneurs or anything about our startup community you’d like to see happen? Alright, that was two big questions.
Steven: 41:45 Yeah, that’s it. How much time yet? No, I think honestly we hit the Dane point, which I usually like to talk to people about, which is really just get out there and networking and get friendly with the community and as far as that helps the community and that helps the entrepreneur is, you know, it’s like for the entrepreneurs out there, go meet a bunch of founders, sit down with coffee for every founder you can and don’t be worried about short term business objectives, you know, just build human relationships with other entrepreneurs, uh, strengthens our community and strengthens what you’re doing. Uh, the serendipity and opportunities that come from that are really, really interesting. And you only really understand that until you start to do it. And that’s, that’s what I didn’t get. I didn’t, I didn’t understand it, so I didn’t do it. And so I didn’t see any of these opportunities to pop up. But now that I’ve gone on, I mean, there’s just, there’s just so much benefit that can come from just getting out there and being friendly with people. And so it’s really, really simple, you know? Um, I think if I had any lasting words that those are the ones I would say.
Alan: 42:42 Oh, that’s fantastic. And I, you know, I really appreciate you coming on and I think that there, there was a lot of good nuggets for entrepreneurs in this podcast and, um, you know, I can’t wait to see what you guys do.
Steven: 42:54 Yeah. Thanks for having me on.
Alan: 42:56 Thanks Steven. Talk to you later.
Speaker 3: 42:59 Alright.