Three Startups, Nine Lessons and One Next Step
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“Once is chance, twice is luck, three times is skill” – Darrell Royal

I’ve had the good luck and the skill to start, build, run and sell three software companies. Before I move on from that phase of my career, I want to reflect on and share the most important lessons from each startup. Then I’ll share my excitement for my next step.

Startup #1 – WGR Media (2001 to 2004)

WGR was a bootstrapped media company that Cashman Andrus and I founded in the coldest part of the first web winter. I loved (and still love) video games. He loved portable computing. We figured that chronicling the way emergent entertainment media was intersecting with new mobile platforms was an enormous opportunity that we could start and run ourselves.

We were so right. WGR quickly became a meeting place for the wireless carriers, handset manufacturers, game developers and publishers to celebrate, rage, compete and support what we called the “obvious disruptor to the video game industry.”

We met incredible people, including Mitch LaskyPaul PalmieriAvram ScoreRobin Chan, and so many more. We were right about the disruption, mobile is both the largest and fastest growing segment in video games. But we were early. When we sold the company to CNET, the iPhone was still three years away. In-app-purchases, which really unlocked mobile games revenues, were five years distant.

Here are the top three things I learned from starting, running and selling WGR Media:

  1. Find your superpower – This company is where I found mine: selling new tech to big companies. Cashman could make computers do amazing things. I realized I could cloes deals, first with Sega and JAMDAT, then with Verizon, Sprint, Nokia, Motorola and so many more. The earlier in your career that you can identify your personal superpower, the faster you can go.
  2. Dance with bears, not on them – Being at the intersection of huge industries is fantastic. We positioned ourselves between Verizon, Nokia, Qualcomm, Sega and all of their competitors. But (see below) we were not reliant on them. No one controlled the platforms we monetized on, and our revenue was never too concentrated with one customer.
  3. Companies are bought not sold – Our partnership with Ziff Davis (via Dale Strang) turned into our first acquisition offer. That generated inbound interest from CNET (via Vince Broady), which we were happy to accept. Spend minimal time chasing an acquisition – focus on serving your customers.

WGR gave me the startup bug. So much to create! So few resources! So many demands! It’s a work version of The Martian. Running so close to the metal, every action meaningful, the clock ticking… and the exit gave me my first look at asymmetric returns. What’s not to love?

Startup #2 – Yesware (2010 to 2018)

After tag-teaming our twins with my wife and then working with Rob Seaver and Paul Neurath, Cashman and I started Yesware in 2010. I wanted to make software sales more predictable and effective. The result would be more accurate revenue forecasting and potentially an entirely new way of engaging with customers and prospects.

We raised $50 million from incredible venture investors, including Brad FeldRich MinerNeeraj AgrawalMatt Goldenand others. We grafted email open alerts onto a Gmail extension and built a viral product that spread through some of the hottest companies of the era – Salesforce.com, Box, Yelp and thousands more. Yesware is rightly recognized as an early pioneer of Product Led Growth (PLG) tactics as well as a founder of the sales software category.

Sadly, the company did not reach its potential. Here are the top three things I learned from almost a decade of running Yesware:

  1. Don’t chase TAM – We wasted so much time trying to build Yesware for Microsoft Outlook, when we should have kept our focus on the GSuite platform until at least $30m ARR.
  2. Don’t dance on bears – In contrast to WGR, at Yesware we were dependent on the good graces of much larger platforms, especially Salesforce. When they decided to give away a free version of our product, everything got harder.
  3. Most startup execs have an 18 month half life – In fast-growing companies, you’ll need to switch out most of your executive team every two to three years. Exceptions prove the rule. Do it thoughtfully, do it fairly, and do it with appreciation, but build the team for the company that you want to become, not the one you have today.

In the end, the CEO I hired to replace me, Joel Stevenson, sold the company to one of our customers. Huge thanks to him and his team. Our software lives on in a larger organization and the team continues to push forward. We created a new category and a great place to work, but it was not the outcome we were aiming for. I licked my wounds and started thinking about…

Startup #3 – BodesWell (2019 to 2022)

My father died in 2019, so I was helping my mom with her finances. My kids were thinking about college, so tuitions and retirement were on my mind. I researched and was appalled by the state of financial planning in the 21st century. Despite the strident advice of people who had tried it before, Bernie Bernstein and I founded BodesWell to democratize access to planning and wealth-building tactics.

We gathered a small team of product people – Chris Christensen, Avram Score, Matt Sponer and Scott Williams. I thought fundraising after Yesware was going to be a layup. It wasn’t. But we hit the half-court three pointer with Grit CapitalRiot.vcArgon Ventures and several key angel investors. Then we got to work.

After three insane years of designing, building, selling, and iterating, American Express bought our company to augment their incredible consumer banking division. It was a great exit for everyone involved.

Here are the top three things I learned with BodesWell:

  1. Distribution is more important than Product – I hate admitting this because I love product, but it’s true. WGR had niche viral content. Yesware had the Chrome extension store. BodesWell had to quickly pivot to B2B because we had no B2C distribution leverage. Without that move, our amazing product would have dominated a tiny niche.
  2. Drive your family crazy – I spent so much time interviewing early customers that my family kicked me out of the house in the middle of the pandemic. They still tease me about how I ruined our vacation with my product-market-fit interviews. If your friends and family aren’t a little worried about your obsession, you aren’t obsessed enough.
  3. The best investors bring more than cash – Every investor says this, very few deliver. When Julia Huang at American Express Ventures (now leading Vesey Ventures) invested, she also connected us to Phil Norman and Christina Anzalone at AmEx Digital Labs. That contact never would have happened if Paul Palmieri and Jenn Byrne at Grit Capital hadn’t hosted a conference and put me on a panel with Julia. The best investors can completely change the trajectory of your startup. Seek partners like that as if nothing is more important.

Whew. Almost 25 years building and running startups. I wrapped up my time at American Express in late 2023 and have been considering what to do next.

What’s Next – Grit Capital (2024 – )

I’m proud to announce that I’m joining Paul, Jenn, Mike Flannery and the rest of the Grit Capital team as a General Partner. That means I’ll be investing in and working closely with early stage startups at the intersection of fintech, martech, commerce and media.

It’s a mistaken cliche to call this transition a move “to the dark side”. I have seen the difference that great investors can make in a startup’s trajectory. The rest of my career is about helping “those who bet on themselves become a better bet.”

The Grit partners are all experienced entrepreneurs. We’ve started, sold, IPO’d and shut down our own companies. We viscerally know the joys and the sorrows of the startup journey. Grit means “Passion and perseverance for a long term goal.” We strive to epitomize that spirit.

If you have comments, questions, suggestions or responses to this post, please leave them below. I would love to know how this resonates with you and your experience.

If you know any early stage fintech, martech, commerce or media companies that we should be talking to, please let me know.

And if you just want to connect or re-connect, I would love to do so. Please send me some times that work for you – matthew [at] grit [dot] vc.

Now, onward into this new adventure. Details and dispatches to follow.

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Grit Capital Partners

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Grit Capital Partners will be traveling to the heart of the mobile world in February, Barcelona. We will be speaking on several panels, and

Grant Nelick

Associate

Grant Nelick is an Associate at Grit Capital Partners where he focuses on supporting the Investment Team in identifying, evaluating, and supporting investment opportunities.

Prior to joining Grit, Grant was a Venture Capital and Growth Equity Analyst at StepStone Group (fka Greenspring Associates). While at StepStone, he gained exposure to direct, fund, and secondary investments across varied stages and sectors. Notably, Grant worked closely on the early-stage direct and emerging manager fund strategies. Beyond his professional role, he activ ely invests in, and advises early stage companies.

Grant earned his B.S. in Finance and Business Analytics from the Kelley School of Business at Indiana University. He is based in New York City and Baltimore.

Topher Brewer

Partner & COO

Topher Brewer is a Partner at Grit Capital Partners. He leads capital formation and firm operations. Before embarking on the journey with Grit Capital Partners, Topher was the Chief Marketing Officer at ABR Capital Partners where he focused on capital formation, strategic marketing, and corporate development.

Topher’s professional journey is backed with invaluable experiences from notable entities, including Sands Capital Management, Facet, Brown Advisory, and Legg Mason. With a career spanning over two decades, he has been a stalwart collaborator for emerging investment sponsors, orchestrating strategies that propel exponential growth. Topher received his BA from Washington College. He lives in Baltimore, MD alongside his wife and two children.

Matthew Bellows

General Partner

Matthew is a General Partner at Grit Capital, investing in early stage companies across fintech, media and entertainment. Previously, he founded, led and sold three companies: a digital financial planning company called BodesWell (acquired by American Express in 2022), a pioneering sales enablement company called Yesware (Vendasta, 2022) and an early bet on the disruptive power of mobile games called WGR Media (CNET Networks, 2004). In addition, Matthew has served in executive roles at Floodgate Entertainment, CNET, Vivox, and American Express. Matthew earned his B.A from Naropa University and his M.B.A. magna cum laude from The Olin School for Business at Babson College. He is a long time practitioner and teacher of meditation, translating the power of mindfulness into modern daily life. He writes about startups, meditation, financial planning and cooking at bellowsand.co

Jennifer Byrne

General Partner

Jennifer Byrne is a General Partner at Grit Capital investing in companies in fintech, insurtech, and digital media. Jennifer has been an executive, venture investor, board advisor, and ecosystem builder in the media, telecom and financial services sectors for the past 20 years.

Jennifer co-founded Quesnay, a strategy and innovation advisory firm that delivered custom global startup accelerators with Fortune 50 companies in Financial Services, Technology and Media. Jennifer also launched the world’s first accelerator to source and support women-led fintech companies while facilitating mutually beneficial startup-corporate-investor relationships. Over 500 women-led startups have applied and been evaluated by 500+ industry leaders & investors, raising over $1.8B.

Before founding Quesnay, Jennifer served as VP, Business Development at American Express launching a digital payment service with global partners. At Verizon, Jennifer was Executive Director, Business Development & Partnerships where she was responsible for a $1Bn+ mobile applications & services P&L. She spearheaded Verizon’s innovation division, led 4G services launch, identified investment opportunities, and established industry-first mobile partnerships with Amazon, Facebook, Twitter, and YouTube.

Jennifer is a thought leader in fintech, and was named to the “Innovate Finance Powerlist” in 2020, 2019, & 2018 (+”Standout 35″), 2020 “NYC Inspiring FinTech Females”, 2021 “Female Founders Alliance Champions” & has been featured on the cover of AM Best and in American Banker, Nasdaq Tradetalks, FNO Insurtech podcast, Insurtech Connect, among others.

Jennifer is based in Santa Monica and New York, and is the co-cofounder of The Female Funders’ Club, the Duke University SoCal Career Chairwoman, and a mentor at TechStars. Jennifer is a graduate of Duke University and speaks Spanish, Italian, and French.

Kelly DeFelice

CFO

Kelly is a driven finance operator with over 15 years of experience working to build processes for companies from startup to IPO. Most recently she was running Sales Finance at Tastemade. Prior to that she spent seven years at Millennial Media working in various finance, chief of staff and sales operations roles, ultimately transitioning to Aol through acquisition. At Millennial she was heavily involved in IPO preparation and various M&A deals. Her areas of expertise include forecast and budget management, strategic sales planning, sales tool development, sales compensation and process development and improvement. She loves a good excel spreadsheet!

Jesse Leikin

Entrepreneur in Residence
Jesse is an entrepreneur and product leader with focused technical experience in ecommerce, analytics, and advertising technology. He has spent more than 15 years enabling digital business. He serves as Entrepreneur in Residence at Grit Capital Partners and leads the product team at Tradeswell. Having led development of SDKs and APIs for Millennial Media, AOL, Flurry and Verizon, tens of thousands of developers and platforms have used his products to manage their advertising and analytics solutions.

Mike Flannery

General Partner

Michael Flannery serves as both a General Partner at Grit Capital Partners, and is the Founder and Managing Partner of Redwood Partners and Redwood Technology Ventures. He focuses on technology investments in marketing technology, Fintech, and e-commerce. Some of his current investments include iFundWomen, Dubset, Alef, Measurence, and Jackpocket.

For over 20 years, Michael has advised global entrepreneurs, corporate executives and venture capitalists on strategic growth, talent strategy and executive search. Redwood Partners uses rich data and look alike success modeling to target and select talent for boards and executive operating roles. Since 2000, Redwood has operated an accelerator and has been successful making direct investments in seed-stage companies to compliment its deep experience in talent and venture development.

Michael is dedicated to the growth and acceleration of women entrepreneurs, and currently serves on the board of iFundWomen and the Female Entrepreneurs Fund. Michael is an alumnus and past Trustee of Cazenovia College. He splits time between New York City and Saratoga, NY where he resides with his wife and two children.

Paul Palmieri

Managing Partner

Paul Palmieri is the Managing Partner of Grit Capital Partners.  He focuses on data and AI based businesses in the areas of consumer software, marketing technology, media, and commerce. He currently serves on the boards of Niche and Incremental.

Mr. Palmieri is a successful entrepreneur in the internet space – most notably in the digital media ecosystem. He is the founder and Chairman of Incremental, who has pioneered neutral measurement for the fast-growing retail media space.  He was the co-founder, Chairman and CEO of Millennial Media (NYSE:MM) from 2006 to 2014, the market leader in mobile adtech. He led the company from being the early revenue engine for the app economy to catapulting into the programmatic media space.  In just 8 years, the company grew to 300M in annual revenue, operations on three continents, a successful IPO, and operation and growth as a public company (NYSE:MM). 

Earlier, he held management positions at Verizon (NYSE: VZ), Advertising.com (AOL), and Tessco Technologies (NASDAQ: TESS). He has been a frequent guest on CNBC, Fox Business, and Bloomberg Television, as an expert in user data, and the secular trend of mobile computing.

Palmieri is the former Global Chairman of the Mobile Marketing Association, and served on the board of the IAB (Interactive Advertising Bureau). He has served as a national judge for the EY Entrepreneur of the Year program, was a winner of the award in the technology category in 2011, and was named Executive of the Year in 2011 by the American Business Awards. Mr. Palmieri is a graduate of Mount St. Mary’s University. He is based in NY and Maryland.