The first real startup I worked for (excluding bands and lawn mowing services) was Upromise.
Founded in Boston, the company’s mission is to help families afford the rising cost of a college education. I started as a customer service rep and answered call after call with the tagline, “Thanks for calling Upromise, the way to save for college. My name is Bill. How can I help you today?”
After partnering with a large number of grocery chains, consumer brands and e-commerce retailers to provide cash back when our members bought select products, we started to see the results trickle in. But often, enthusiastic members who changed their shopping behavior to buy from participating brands called to say that after 3 or 4 months of shopping, they had less than $5 in their Upromise account to use for their son or daughter’s education.
As a phone rep, I tried to explain that over time the savings could help defray expenses associated with books, housing, meals and so forth, but the reality was that we weren’t really achieving our mission.
Upromise had a couple of big advantages on its side though—the company raised a large sum of money prior to the bubble bursting and we had brand name VCs on board like Kleiner Perkins Caufield & Byers, Greylock Partners and more. Their financial and strategic support enabled the company to transition through three CEOs over about four years, and each had a separate strategy for growth (an AOL partnership then credit cards, and ultimately, financial services and 529 plans). The final approach had traction. We were able to develop a best-in-class back office processing platform for 529 plans, and partnered with the mutual fund company Vanguard to service clients with state 529 plans.
During the company’s shift I transitioned to Internal Audit Manager of Upromise Investments, Inc., the newly-formed entity responsible for back office processing. I passed my Series 7 exam (to become a stockbroker), helped devise and execute a series of audits to ensure processing quality was up to par, and served as the lead interface for auditors from the SEC, NASD (now FINRA, a securities regulator), State of New York and more. Just what I had imagined doing a couple of years earlier as a philosophy major at Dartmouth.
In 2006, Upromise was acquired by Sallie Mae, a win for investors and the company in general.
After relocating to North Carolina soon after and getting involved with local startup companies here, I feel that the biggest takeaway from Upromise’s success is the importance of finding believers. And I think that lesson is highly relevant to the local startup ecosystem today. From investors to early employees to customers to replacement CEOs and to partners who believed in us and our mission enough to help us reach a viable business model, Upromise is a story about persistent belief. Belief is a critical ingredient in all successful companies and ecosystems, and I think we need to continue to work to cultivate it here in the Research Triangle.
As an entrepreneur-in-residence at Groundwork Labs, I try to give constructive feedback to founders and assist in areas where I’m halfway competent. But most of all, I try to be a believer in the team and the idea. It’s easy to find reasons why a company will fail (Hint: If everything looks solid, just ask ‘What if Facebook/Google/Amazon/etc. decides to do this?’) and it’s not always easy to trust that every founder’s company will be a huge success, as the statistics say most won’t. Still, some will.
Look around at SciQuest, iContact, ChannelAdvisor, Bandwidth, Appia, ReverbNation, Bronto, Digitalsmiths and even earlier stage companies like Shoeboxed, Adzerk and Automated Insights, and you will see that this area is starting to produce not just promising ideas but valuable businesses and attractive exits for investors. The Triangle has a number of qualified and accomplished founders. What we need next are more people who really believe in them and their ideas.
That means more people willing to take sub-market pay to be one of the first few team members at a startup rather than working for a big company. It also means more seed-stage investors who are willing to make decisions in days and weeks rather than several months, and who choose to believe in founders’ visions rather than searching for reasons NOT to invest.
Finally, it means that bigger companies need to believe in nascent businesses’ ability to add value as partners or service providers and work with them to integrate products and services that push both companies forward.
This is a process and it takes time. The Valley, Boston, New York and other more established markets have spent decades producing successful companies, entrepreneurs with impressive track records, and an ecosystem of now-mature former startup businesses who will give newly-launched companies a chance. We are making great strides—the startup scene is almost unrecognizable from when I moved here in 2006—but we need to challenge ourselves to keep moving forward. To me, the way we reach the next level is by choosing to believe.
Let me end with a challenge for anyone involved with startups in any capacity. The next time you hear a founder explain an idea, recruit you, pitch a partnership, investment or other arrangement, suspend the natural inclination to look for a reason it might fail and choose to believe.
Believe that the company will be the next Google, and that the founder will be the next Elon Musk. Believe that the founder and the company are worth the risk of your involvement. Believe not as some act of charity or public service, but because it is reasonable to believe.
We are growing as a community and our successes will mirror that rise. Before long, your belief just might pay off.