Getting a Boost
The name tells a good part of the story. Launch413, one of the latest additions to the region’s entrepreneurship ecosystem, exists to help developing companies get to the proverbial next level. It does so by linking entrepreneurs with seasoned experts in everything from marketing to supply-chain dynamics, thus enabling them to soar higher — and, hopefully, within the 413.
Lisa Papademetriou is a wordsmith.
She’s a novelist specializing in young-adult fiction — she’s written, among other things, the New York Times bestseller Middle School: My Brother is a Big, Fat Liar — but she’s also been an editor at Harper Collins, teaches writing, and is a sought-after public speaker.
But she also knows how to use numbers effectively, especially when it comes to the business she’s trying to take to the next level.
She knows, for example, that publishing is a $77 billion business. Further, she knows that something like 1.2 million different books are published each year, many of them self-published. And perhaps most importantly, especially when it comes to her venture, she knows that perhaps one in 10 people who start writing a book will actually finish it.
With all these numbers in mind, Papademetriou created Bookflow, a cloud-based tool for writers that helps them become more creative — and more productive.
“It helps writers build skills, with a framework that’s built out to support specifically long-form fiction,” she explained. “It provides information on structure and checklists to help people keep their scenes on track and accomplish what they want to do.
“It helps build motivation with Fitbit-style trackers on both a daily and a project level so that you have a certain amount of accountability,” she went on. “And it also offers rewards.”
Those aforementioned numbers also help explain why she enlisted the help of Launch413, an initiative, but also a business itself, that has become an intriguing addition to the region’s entrepreneurial ecosystem.
In a nutshell, Launch413 helps take startups to their first $10 million in revenue, said Paul Silva, co-founder along with Rick Plaut. Silva is perhaps best known for his work to create Valley Venture Mentors, but he now wears many hats, as we’ll see, including president of River Valley Investors, an angel-investor network.
When wearing his Launch413 hat, he and other members of the team help people like Papademetriou take an existing venture to that proverbial next level through guidance and consultation on matters ranging from sales to technology to supply chain.
This consultation is provided in exchange for what amounts to royalties in the business — not an equity stake — payable down the road.
That’s how Launch 413 does what it does. As for the why, that’s summed up in this simple line from its website: “we believe there is no better way to create prosperity than to help entrepreneurs turn their crazy dreams into innovation and jobs for the future.”
For Papademetriou, her crazy dream is what she calls “the world’s first online writing mentor,” which provides an organizational framework for helping writers stay on point, on target, and finish what they start.
She told BusinessWest she clearly understood what the market wanted and needed, but she didn’t know everything she needed to know to convert the service, currently available for free, into a successful business.
So, with some urging from Silva, she enlisted help from Launch413 — specifically, from people like Eric Ashman, CFO of the Huffington Post and serial entrepreneur; Meghan Fitzgerald Henshon, global brand manager for Procter & Gamble; and Randy Krotowski, CIO of a Fortune 100 company with vast experience in negotiating joint ventures and acquisitions.
Consultation from such individuals would otherwise be prohibitively expensive, if you actually get them on the phone, said Papademetriou, adding that Launch 413 provides such access, and she is taking full advantage.
Thus, her story — that’s an industry term — provides a perfect example of how Launch413 is becoming an important addition to the entrepreneurial landscape. And there are many others, such as Wooftrax, maker of the Walk for a Dog app, and a company with this marketing slogan: “Don’t just take your dog for a walk … take your walk for a dog.”
Indeed, this venture, launched by Doug Hexter, enables users to raise funds for an animal organization every time they take their dog for a walk.
Revenues are generated from advertisements, said Hexter, adding that some 50 million walks have been taken since it was launched two years ago, benefiting 9,000 animal charities.
“Launch413 is helping take things to the next level,” Hexter told BusinessWest. “They’ve been great in, well, helping us focus on what makes sense to focus on.”
For this issue, BusinessWest takes an indepth look at Launch413 and how it is becoming an exciting new plot line in ongoing efforts to foster entrepreneurship in the region and create more jobs and vibrancy in the process.
A Real Page Turner
When she was teaching, Papademetriou said, she was struck by just how many students had a good idea for a story and the motivation to write it, but had trouble organizing it into a cohesive manuscript and identifying the objectives they were supposed to accomplish with their work.
“On the sentence level, their stuff was great,” she told BusinessWest. “On the big-picture level, on the strategy level … not so much. They had no trouble with descriptions or even creating vibrant characters, but they couldn’t make a whole story, and they couldn’t get to the end.”
Bookflow was created to help them get to the end, and in that respect, it is much like Launch413 itself; both concepts are focused on the big picture, strategy, and putting the pieces together — for a specific venture, but also the region itself.
“We believe there is no better way to create prosperity than to help entrepreneurs turn their crazy dreams into innovation and jobs for the future.”
As Silva explained, River Valley Investors (RVI) has long been interested in investing in more local companies, but it has struggled to identify enough local ventures that were far enough along for investors to feel comfortable taking on the risk.
“When VVM took off, we had hope that we could invest in VVM graduates,” he went on, referring to the agency’s accelerator program. “And we invested in one or two of them, but VVM has graduated some 200 companies. So there was a gap between what VVM was graduating and what RVI could comfortably invest in.”
Launch413 was created to help close that gap.
Elaborating, Silva said most of the companies VVM has been graduating are led by first-time founders.
“And these first-time founders have to make all the first-timer mistakes — those are the rules,” he explained. “And we don’t want to invest in someone who we know is going to make all those first-timer mistakes, because they’re going to make them on our dime.”
Meanwhile, such first-time founders generally don’t have the money needed to hire people have essentially been there and done that, he went on, thus creating a frustrating catch-22 — one that needed to be addressed.
Launch413 was born from that frustration, said Silva, adding that it provides entrepreneurs with access to people who have been there and done that and are willing to share their wealth of knowledge for a share of the profits down the road.
“I realized that I knew a bunch of crazy-smart people who don’t need to get paid today,” Silva said. “They can take a risk and help the companies, and thus help solve the chicken-and-egg problem.”
The operating model for Launch413, he went on, is to invest in a company by providing ongoing consultative support in the crafting of a strategic plan, focusing on the areas where the entrepreneur or group needs technical assistance to get from here to there.
“We’ll say, ‘OK, what are your biggest challenges?’” he explained. “‘Do you need to redo your branding or build a robust marketing strategy? The former global brand manager for Procter & Gamble is going to meet with you every two weeks to get that done. You need to get your financials straightened out before you meet with venture capitalists? This is the founding CFO of the Huffington Post; he’s going to meet with you every two weeks until you’re done and ready, and if you impress him, he’ll introduce you to his VC friends.’
“And so on and so forth,” he continued, adding that Launch413 has more than dozen such consultants ready to assist. And when companies being helped then come to RVI and other groups in search of capital, that team behind them certainly helps eliminate some of the risk that might be involved.
This support comes in exchange for royalties, or a percentage of top-line revenue, a few years down the road and until the company reaches $10 million in revenues, said Silva, adding that this overall model is somewhat unique. He’s seen it done with one-offs and unicorn companies (revenues in excess of $1 billion) but not in a structured format like this.
As for that royalties structure, he believes it works more effectively than taking an equity stake, something most entrepreneurs don’t want to do anyway.
“Our incentive is not to encourage the entrepreneur to sell the company,” he said, adding that ‘413’ exists in the name as a nod toward the goal of creating more businesses for this region. “By taking a royalty, our only incentive is to help the entrepreneur earn money. If the entrepreneur wants to sell the company, they can certainly do that, and we’ll get paid then. But they know our only incentive is to make the company more successful.”
The Plot Thickens
Returning to the many motivations for Bookflow, Papademetriou noted that, when she encountered students who had trouble getting to the finish line, she would usually recommend that they read books on writing to find some inspiration and a roadmap.
“Invariably, they would try to apply everything all at once and get frustrated,” she said. “And I kept thinking, ‘if I can just be there with them as they’re trying to compose, encouraging them or reminding them gently that this scene needs to have an emotional transition, or some technical thing, it would be a lot easier.’”
Through Bookflow, that’s essentially what she does — she’s there with the writer as he or she continues their journey to the final page. “You can’t always be sitting next to someone as they’re composing,” she explained, “but you can offer a piece of software that serves as that kind of mentor.”
In a way, Launch413 provides a similar service to the entrepreneur — helping that individual or team get to where they want to go.
“As someone who has been in publishing and has been a novelist, I didn’t necessarily have contacts with the kind of business background that one needs if one wants to launch a product and create a business,” said Papademetriou. “I knew what the consumer needed, but I didn’t know how to conceive a business strategy. I didn’t know how to craft an investor pitch, and I didn’t even really know how to create a cohesive marketing plan. And Launch 413 has been instrumental in helping me with all of those things.”
Hexter tells a similar story with Wooftrax, adding that the company was already established when it became involved with Launch413, which has been instrumental in helping it scale up.
“It’s a process,” he said. “They’ve been helping us in identifying strategies to get to that next step, partnerships, helping us in the decision process, and more.
“They have expertise in the areas that we need help in, without actually having those people on staff, which we couldn’t afford to do,” he went on. “And they’ve helped us make connections — connections in the community, connections to other entrepreneurs, connections to venture-capital people, and other people doing interesting startup activity — and all those connections become useful in the short term and the medium term.”
“On the sentence level, their stuff was great. On the big-picture level, on the strategy level … not so much. They had no trouble with descriptions or even creating vibrant characters, but they couldn’t make a whole story, and they couldn’t get to the end.”
As for the consultants working with the entrepreneurs, each one brings vast levels of experience and success to the equation. In Fitzgerald Henshon’s case, that experience comes in the realms of marketing and brand building, areas she said many business owners don’t fully understand.
“I do a lot of educating entrepreneurs on just what marketing is strategically,” she explained. “I think people think of marketing as websites and ads, but it’s what goes into that — that knowledge of the consumer and the benefits the business is trying to bring to the consumer — and then how to communicate it in a way that’s really authentic to the brand that they’re creating.”
She said there are many types of consumers, obviously, and ventures like those now being assisted by Launch413 must identify their specific consumers and craft a message intended specifically for them.
For that reason, the work she does with these entrepreneurs is very hands-on, it involves imparting decades of acquired knowledge, and it’s quite rewarding on a number of levels.
“I really love it,” she said. “I’m impressed with the quality of the entrepreneurs and the ideas. And I think that this [Launch413] is a marriage that works very well. You’re helping meet specific needs, so it seems like every time you meet, something concrete is being tackled.
“It’s not advice and then ‘take it or leave it,’” she went on. “It’s something really tangible to be worked on, and then we roll up our sleeves and get it done. We don’t offer a few ideas in a presentation, for example; we go through it slide by slide.”
By the Book
Papademetriou isn’t sure how her latest work — meaning Bookflow, not the next young-adult novel to hit the shelves — will end or even how the next chapter will develop.
She’s confident, though, that this will be the story of a new and intriguing product that will meet a critical need — helping all those writers who start a book and never finish it, for example — in a meaningful and profitable way.
It’s a story with an intriguing cast of characters and several potential plot twists, all resulting from the help of Launch413.
And, as all those who spoke with BusinessWest noted, it’s a story that needs to be written many more times as the region seeks to grow and add more jobs.
George O’Brien can be reached at [email protected]