On May 12, eight promising startups will take the stage at Splash Spring 2016, at the historic Scottish Rite, with an awesome after-party right on Lake Merritt right after. Join us before prices jump at the door!
Throughout the process of getting these upstarts prepared, I try to help them put their early traction into perspective. Understanding how quickly products can and should be adopted is integral for investors and startups.
That's why we'll be sure to ask our Founder & CEO Keynote speakers and panelists on stage what their traction was in their early years and what the driving forces were behind that adoption. Among the Keynotes gracing our stage include: Nirav Tolia, Founder & CEO of NextDoor. We'll ask Nirav how many neighborhoods was NextDoor in by the end of its first year. We'll ask Handy Founder & CEO Oisin Hanrahan how many handymen the service had in its first six months and what was its early business model and how it's evolved. We'll ask FanDuel co-founder Tom Griffiths how many players were on the fantasy sports site and how many bets were placed in the first six months. See the rest of our outstanding lineup.
It's not uncommon to look at past achievements to know whether a company or product is ahead of the curve, or way behind. Look no further than the comparison of iPods, iPhones, iPad, iWatch sales in the first six months or year. Apple estimates that it sold 12 million iWatches in its first year, twice as many as the six million iPhones, released June 2007, sold in its first year. Another way to look at traction is to look at the one-million-unit milestone.
The iPad, which was released in April 2010, saw its one-millionth sale in under one month, while the iPod, which was originally released in 2001, saw 25,000 sold its first year, and took about 2.5 years to see one million iPods sold.
Knowing this information is invaluable. Tha's why one of my favorite series we produce at VatorNews is "When they were young." This is a series that helps us understand the early years and the milestones achieved at some of the fastest-growing startups in the last decade.
We hope you enjoy it too. Below is a snapshot of some of the startups we've covered. And here's the series.
Launched: August 2008 as AirBed & Breakfast
Founders (ages at the time): Joe Gebbia (27), Brian Chesky (27), and Nathan Blecharczyk (24)
Initial Company Description: "Book rooms with locals, rather than hotels," according to an early pitch deck.
First investment - at three months - $20K seed: "On June 26, 2008, our friend Michael Seibel introduced us to seven prominent investors in Silicon Valley," said Airbnb CEO Brian Chesky. "We were attempting to raise $150,000 at a $1.5M valuation. That means for $150,000 you could have bought 10% of Airbnb." In all, the company received five rejections, while the other two firms didn't bother replying. Airbnb was accepted into Y Combinator for the spring 2009 class, which meant the company had raised its first official funding: a $20,000 seed round.
Second investment - at eight months - $600K seed: Airbnb presents at the Y Combinator Spring 2009 Demo Day, where they officially rebrand from "Air Bed & Breakfast" to "Airbnb." They make a good impression, ultimately resulting in a new $600,000 seed round led by Sequoia Capital with participation from Youniversity Ventures and Ashton Kutcher.
Revenue milestone - in first year: In 2009, Airbnb was only making $200 in revenue per week, or just over $10,000 for the year. Offering a professional photographer to take pictures of a host's space helped encourage more reservations, doubling revenue to $400 per week.
Traction - in first year: Traction came slowly. While Facebook had 70,000 users after just two months, it took Airbnb nearly a year just to reach 25,000 users worldwide.
Snapchat's First Year ------
Launched: July 2011 as Picaboo
Initial Company Description: "Snapchat isn’t about capturing the traditional Kodak moment. It’s about communicating with the full range of human emotion — not just what appears to be pretty or perfect," the company wrote in its first blog post. "We’re building a photo app that doesn’t conform to unrealistic notions of beauty or perfection but rather creates a space to be funny, honest or whatever else you might feel like at the moment you take and share a Snap."
Traction - at five months: December 2011. Snapchat reaches 40,000 active users.
Traction - at 10 months: May 2012. Snapchat processing 25 images a second.
First funding - at 10 months: May 2012. The company took $485,000 in seed funding from Lightspeed Venture Partners in May of 2012, valuing it at $4.25 million.
Traction - at 11 months: June 2012. On the eve of its first anniversary of its founding, Snapchat had sent over 110 million images, according to a blog post from Evan Spiegel at the time.
Facebook's First Year ---
Launched: February 4, 2004 as TheFacebook
Founded by: Mark Zuckerberg (19 years old)
Initial Company Description: "Expanding online directory that connects students, alumni, faculty and staff through social networks at colleges and universities," according to an early pitch deck, created in the Spring of 2004, from then-CFO Eduardo Saverin.
Traction - at two months: 70,000 users across 20 colleges, including Columbia, Yale, Stanford, Cornell, Brown, Princeton, Duke, Georgetown, NYU and MIT, according to Saverin's deck. In the deck, the company also revealed its plan to launch in 200 colleges within the next six months.
First investment - at 5 to 6 months: Summer of 2004, Peter Thiel bought over 10 percent of the company, while also joining Facebook's board of directors. Thiel invested $500,000 at a $5 million valuation.
Uber's First Year —
Founded: March 2009 as UberCab.
Founders (ages at the time): Travis Kalanick (32) and Garrett Camp (30)
Initial company description: "Today the UberCab team is working to provide high-quality, on-demand car service booked easily through your iPhone or SMS. Our GPS-optimized dispatch platform provides elite, efficient, and simple car service using high-end sedans with reputable drivers rather than traditional taxi cabs. We’re starting in limited beta in San Francisco and rolling out to other cities in mid 2010."
Traction - at three months: With a protoype "coming along" in the summer of 2009, Kalanick officially joined the company as "Chief Incubator," aiming to "temporarily run the company, get the product to prototype, find a General Manager to run the operation full time and generally see Uber through its San Francisco launch."
First funding - at five months: In August 2009, UberCab closed $200,000 in seed financing from First Round Capital.
Test launch and traction - at 10 months: Though the product wouldn't officially launch in San Francisco for a few months, the first test run of UberCab took place in New York in January 2010. Uber has three cars "cruising" parts of New York, according to Kalanick.
Twitter's First Year ------
Founded: March 2006 as twttr, a product of podcasting company Odeo. The first Twitter prototype was used as an internal service for Odeo employees.
Founders (ages at the time): Jack Dorsey (19), Noah Glass, Evan Williams (24) and Biz Stone (22)
Initial company description: Stone plays a mad scientist in this early video where he explains how the service worked at the time. It initially worked as a text message service, where a person's friends would receive the message via SMS.
Traction - at five months: a 4.4 earthquake in Sonona County in August 2006 is one of the first instances of users coming to Twitter to discuss an event as it happens in real time.
Business model - at one year and one month: Twitter is spun out of Obvious and becomes its own separate company in April of 2007.
First funding - at one year and three months: Twitter takes $5 million in a round led by Fred Wilson of Union Square Ventures, which also includes Charles River Ventures, as well as Marc Andreessen, Dick Costolo, Ron Conway, and Naval Ravikant as angel investors. Twitter