Exclusive Startup Interview with Shaun Moore Co-founder & CEO of Chui

In a continuation of our series on startups, the following exclusive and fascinating interview was graciously provided by Shaun Moore, who is the Co-founder and CEO of Chui.

Why don't we start by briefly describing your company's intelligent doorbell?

Chui’s first product is an intelligent doorbell that uses a blend of facial recognition and proprietary technology capable of learning with time to make our homes safer, and our experiences with connected devices seamless; Chui does more than enable a house that is smart – it shapes a home that is you.

How did you happen to come up with the idea for the business?

I had just left my corporate job in Chicago and booked a one way ticket to Casablanca Morocco which is where my CTO is from.  We were catching up and reliving memories from college as well as digging into sites like Kickstarter to generate ideas.  The more we talked about trends in the home we realized that everyone was innovating the inside of the home and making it smart but no one was changing the gateway or the portal to the connected home.  We saw an opportunity to not only connect the front of your home but to make it intelligent to the point of recognizing visitors/yourself and acting based on identity.

Who do you consider your direct competitors?

 Ring and Skybell are competing with us in the Smart Doorbell space.  Ring has done an incredible job getting out there in front of the mass market and showing the world why its important to adopt technologies like these.  They have inadvertently helped us do our market research although we have a slightly different approach as we are focusing more on intelligence by using biometrics (Facial Recognition) as a means for customization and access control.

When do you expect to generate income?

 We have been taking pre-orders since last year and intend to fulfill those shipments early in 2016.

Did you get any venture capital to begin with or are you self funded?

We started as self funded and raised a small round of angel financing after completion of Boomtown Boulder Accelerator.

How long have you been in business and where are you located?

We started engineering the product in March of 2014 in Boulder Colorado and have since relocated to Dallas, Texas.

How many employees do you have and do you use virtual assistants?

There are 5 of us and we do not use virtual assistants.

Tell us a little about your background.

I'm driven by a love for exploration and innovation. This has led me to be the Co-Founder and CEO of Chui, an  intelligent device that uses facial recognition, machine learning, AI and other computer vision technologies.  Chui has customers in over 30 countries and has been featured in TechCrunch, Forbes, CBS, WSJ and a few others.

I played Division 1 football at Southern Methodist University in Dallas, TX and graduated with honors with a degree in Finance and a specialization in Alternative Asset Management.  My journey to create Chui began three years ago, leaving Merrill Lynch Private Wealth in Chicago and booking a one-way ticket to Casablanca, Morocco to pursue my entrepreneurial vision: make technology accessible, personal, and trustworthy.

Prior to Chui, I worked on a startup in the mobile application industry. I've been fortunate to have lived on three continents and regularly participate in international communities for the advancement of global entrepreneurship. I've continued to share my story and vision through speaking at several events across the world from San Francisco to Barcelona.

What are your plans for the future of the company? Any new products on the horizon?

We have some exciting announcements in due time (I can't give those away yet!).  We feel that our technology will create an environment that is as seamless as walking through a door.  We firmly believe that biometrics is the future of authentication and authorization and with a product like Chui we are one step closer to breaching the nexus of convenience and security.

What do you consider your biggest challenges as a startup?

Attracting top talent to leave their comfortable job to come help disrupt an industry or thought process.  As a startup there is no class you can take or book you can read that will give you the answers to your problems.  You have to learn by doing and by making mistakes and by surrounding yourself with people who have been in your shoes before.

What one or two pieces of advice would you give someone who is developing a startup?

Listen, listen, listen!  Listen to you customers, your backers, your investors, your friends and family.  Aggregate everything people have told you and make your own decision based on all of the available information.  At the end of the day you are writing your own story so make intelligent quick decisions that get you from point A to point B and if it was the wrong decision learn to never make that mistake again.  Entrepreneurship is very much about continuing education and the best resource that we as entrepreneurs have is the available knowledge on the internet, in books and through relationships.

Where can people go to get more info on your product?

www.getchui.com

Thanks very much for your time.

Quick Review of the Launch Mobile, Wearables & IoT Conference Day 1

If you signed up for the Launch Mobile, Wearables & IoT Conference at the Herbst Theatre, in Fort Mason in San Francisco, and you didn't attend Day One, you need to attend tomorrow. The speakers were great and the exhibitors were awesome.  The diverse group of startups had many unique products and services.

Here are just a few of them.

Getonlow.com "Totally Silent Video Chat"

Chüi getchui.com

First Derm by iDoc24 FirstDerm.com HÜD Smart Mole Scanner

VimoFit Fitness Tracking Beyond Pedometers vimofit.com

Serenneti "Think Keurig for Food using Robotics" serenity.com

Don't forget to check out all these exhibitors, along with all the other exhibitors at the show.

Exclusive Interview with Jonathan Fuld: Founder of Leavamsg.com

Readers who are interested in learning more about startups will find this interview fascinating. In a continuation of our series on startups, the following exclusive interview was graciously provided by Jonathan Fuld, founder of Leavamsg.com

Why don't you start by briefly describing what your website does?

You can leave a message (leavamsg ™) to your family, friends, colleagues, business associates, basically anyone you want to talk to.  Hit the record button, start speaking, then hit the send button.  From any device, anywhere, anytime.  You can leavamsg to anyone in the world or to the whole world.  You have the "Freedom to Talk!" ™.

How did you happen to come up with the idea for the business?

I founded a telephone call recording company, SIP Print.  I left after four years when I thought the technology and value was becoming archaic.  People interact in so many ways today.  What was missing was a near real-time aural communication technology.  Leavamsg eliminates the need for call recording, voice mail and telephony as we know it.  I can leavamsg for you as many times as I want.  When you listen to your messages, (driving, flying, at the beach, basically anywhere), you hear so much more communicated in the speaker's voice than just the words.  That is key.  I want to tell you as much as I can in as little time as possible at the greatest convenience to you while freeing your eyes from reading another email or text message that can be misinterpreted.

Who do you consider your direct competitors?

Proprietary voice mail on singular system manufacturers, call-recording manufactures, telephony service providers are industries that are disrupted by Leavamsg. 

How do you, or will you, generate income for your business?

Income is generated by premium services above and beyond the standard services.  Not everyone needs or wants a premium service.  Companies are definitely interested in the premium services for Leavamsg.

Did you get any venture capital to begin with or are you self funded?

All of our finances are private.  We are profitable.

How long have you been in business and is the company a corporation, an LLC, a partnership, or sole proprietorship?

Leavamsg started in the beginning of 2015.  It currently operates as an LLC.

How many employees do you have and do you use virtual assistants?

Our HR statistics are private.  We are growing.  Would you like to join us?  Leavamsg for me.  My contact is JF.

Tell us a little about your background.

My background centers on technology, software, start-ups, consulting.

What are your plans for the future of the company?

Our plans include continuous improvement of delight for the users of Leavamsg.  If people are not satisfied with something in Leavamsg, we want them to tell us.

What do you consider your biggest challenges as a startup?

1) Noise - from others and your own self-doubt;

2) Global Perspective - If you forget that you are in an international market, you lose 95% of your perspective.

3) Activity getting in the way of design - Movement doesn't always mean profitable progress, sometimes it is only noise (see #1 above.)

What three pieces of advice would you give someone who is developing a startup?

1) Never stop.

2) Start up only if you want to change the world.

3) Adapt.

How can someone try out the site?

 Just go to Leavamsg.com, click on Sign Up, which only takes a few seconds, then leave a message. It works best with Firefox and Chrome. I look forward to hearing from you.

Thank you very much for your time.

No investment recommendation nor any investment promotion is expressed or implied by either the publisher, the interviewer, or the interviewee.

The Venture Capital Conundrum By Ray Zinn

Venture Capital Actuarial Tables

The VC Conundrum

Guest article: By Ray Zinn
Author of Tough Things First: Leadership Lessons from Silicon Valley's Longest Serving CEO

It is not that all VCs are bad, it’s just that not many VCs are good.

Entrepreneurs need money to launch a business, and here in Silicon Valley there are endless lines of founders queuing in front of an endless line of venture capitalists (VCs) with money to invest. Yet the question entrepreneurs far too rarely ask is if VC money is a good thing. Nor do they ask if one or another VC has the correct long-term interest in the founders, their vision or their company.

VCs, a necessary anomaly

So what is the purpose of VCs?  They exist to insert money into companies during their earliest years. It takes cash to start a company, but VC cash is only one possible source. The three primary means for raising starting cash include:

• Founders use their own personal assets and resources (friends, family, etc.)
• They borrow without exchanging equity and power, through a bank loan secured against personal assets.
• They come, hat in hand, to VCs pitch parties.

This is where VC money becomes a Faustian temptation. Most founders lack the personal resources required to launch a company, to hire staff, and to feed the development, marketing, sales and support processes. Like most people, founders’ assets are otherwise occupied – tied up in our homes, retirement accounts, kids’ college funds, investments, and personal property.

This creates a very uncomfortable situation for anyone with common risk aversion. Risking a lifetime of work and savings is unappetizing. So founders are all too willing to trade equity and the collateral authority for financial help. Given that banks are typically loath to finance startups with thin track records, they rarely do (I secured bank financing to launch Micrel, a semiconductor company, a rarity that few can imagine). Even if banks are willing to lend, founders are often unwilling to secure these loans with their hard-earned assets. Under those rare circumstances where the bank and the founder are willing, the bank often offers less than is actually necessary to sustain the startup.

Let’s face it, startups are extremely risky.  Statistics show that fewer than 10 percent of them live longer than three years … though the odds of failure might well diminish if founders had their assets on the line.

VC Actuarial Conundrum

Would you make an investment if you knew that there was a 90 percent chance that it would fail?

VCs do. VCs are, by definition, gamblers. They know the odds and continue rolling the dice day in and day out on the long shot that one in ten investments will pay well enough to balance out the other nine. And they pray for the lottery-level odds that number ten is the next Google. When a VC says he is betting on your company, he means it quite literally.

VCs do stack the odds in their favor to some degree, but the process reduces the odds, a great outcome for founders. VCs know that to make an investment more likely profitable involves selling the portfolio company to a much larger entity. And Silicon Valley is not at a loss for mammoth companies who consume smaller companies for intellectual property and talent.

To make these companies “valuable” enough to balance books, VCs push founders to “grow” their companies at blinding speed, assuring the startup CEO that more cash is available for ongoing operations (for another hunk of equity, of course). Grow, gather cash, grow, gather cash – this is the life of a startup CEO. The growth is artificial, often producing unsustainable companies, but with some demonstrated technology and a patch of market traction. Properly fluffed, and with associated valuations of unrealistic natures, VC portfolio companies are corralled, auctioned off to the highest bidder, and slaughtered.

VCs, Egos and Actuaries

Many (perhaps most) venture capitalists believe they provide some special sauce that grants them the ability to beat the early-investor odds. They believe their investment success ratio will be exactly opposite of the real world – that they will win nine out of every ten bets.

Their strategy is flawed.  Actuary tables for humans are statistically calculable and accurate, thus everyone buys into insurance industry stats.  VC actuary tables are at best inaccurate, and at worst a poor man’s bet. A life insurance company using VC actuary statistics would have to charge premiums that exceed what rational people would pay.

Which is what founders do. By switching from being leaders to being money hunters, by trading control for cash, by not paying attention to their company, customers and culture as their principal priority, they pay huge premiums betting they won’t die. Yet by giving away control to VCs, and following their lead concerning the perpetual money hunt, they all but guarantee their demise.

Since business failure rates are high, many founders are acutely risk-averse. Without excellent native leadership and management skills, the odds are against them.  But being an entrepreneur is such a tremendous lure that feisty founders expect to beat the odds. Often it is only their manic vision and relentless drive that pushes past the pits of failure.

However, this does not change their risk-averse mentality. As I formulate my mentoring process, which is tied to my investments, I talk to many founders. An acid test question I ask of each man and woman is if they are willing to put up some of their own money for the venture. Thus far all have declined.  Just last week a couple of gentlemen approached me, wanting to start a high-tech company. Their initial assessment was that they needed half a million dollars. After reviewing their business plan and counseling them accordingly, they moved their go-to-market plan out by two years and decided they needed nearly four million dollars. They also assumed than none of the risked capital would be theirs.

Fortunately for them, I have extensive executive experience in the markets in which they want me to invest – something no VC can contribute. Having launched a successful company, having had thirty-six nearly consecutive profitable years, having survived five major industry downturns, I can help guide a portfolio company’s rational growth.

This is where, I believe, not all VC funds are good.  VCs lack the executive expertise to fully understand the risk and capability within a startup. I know that the two gentlemen I interviewed were involved in three other startups over the past fifteen years – and all but one failed miserably. Their most recent startup raised over $300M in venture capital funding and now, eight years later, the company is still seeking venture capital while generating less than $5M in revenue per year. 

With $300 million in financing, one would assume their VCs would provide a rich assortment of advisors with expert insight into their company’s industry, markets, niche segments and operations. But they didn’t. These two gentleman claim that their VCs told them to spend the money as quickly as possible so that they could get a head start or jump on the competition.

A sprint that led to a corporate heart attack.

Three years ago Micrel had the opportunity to purchase Dicera, a MEMs semiconductor company. Dicera was launched in 2003. By the end of 2013 they had raised over $72M in venture capital funds but were turning less than $6M a year in revenue.  Micrel purchased Dicera for a little over $7M. We bought a VC-backed company for a dime on the dollar.

Founders Skew the Actuarial Tables

This is the foul legacy of VC-funded startups – they miss their business plan objectives by an order of magnitude. Without experienced perspective, founders misestimate all. Things take longer, they cost more than budgeted, and markets are tougher to crack than anticipated. With all this working against them, VCs pushing for unsustainable growth merely exacerbate underlying problems. This creates greater portfolio fragility, and oddly causes VCs to place wilder bets on the hopes that they can saddle a unicorn.

But it doesn’t have to be this way. High-flying Silicon Valley software startups are getting most of the VC cash, and not enough payoff. Meanwhile, the same companies – and those in less favored industries – are finding that without mentorship, their ships sail slowly and sink quickly.

Yet we may see a few VCs doing business differently. They will have qualified councilors with industry experience who expertly guide startups. They don’t shoot for rapid yet unsustainable growth, but instead count on forming enduring companies. They insist that founders take risks, with their own assets as part of a grander, longer-term marriage. In short, the new VC may be seen as the anti-VC.

Not all VCs are bad, but not all VCs are good. Choose wisely.

Raymond D. “Ray” Zinn is an inventor, entrepreneur, and the longest serving CEO of a publicly traded company in Silicon Valley. He is best known for creating and selling the first Wafer Stepper (an industry standard piece of semiconductor manufacturing equipment), and for co-founding semiconductor company, Micrel (acquired by Microchip in 2015), which provides essential components for smartphones, consumer electronics and enterprise networks. He served as Chief Executive Officer, Chairman of its Board of Directors and President since Micrel’s inception in 1978 until his retirement in August 2015. Zinn’s philosophy on people, servant leadership, humanistic management and the ethics of corporate culture are credited with Micrel’s nearly unbroken profitability. Zinn also holds over 20 patents for semiconductor design.

His new book, Tough Things First (McGraw Hill), is now available for ordering.

Don't Forget to Attend the Launch Mobile, Wearables & IoT Conference Next Week

Make sure that you attend the LAUNCH Mobile, Wearables & IoT Conference on Thursday, October 15 and Friday, October 16, held at Fort Mason in San Francisco, California. The actual show starts at 9:30 am but the exhibition opens at 8:00 am.

The agenda for the event can be found here:

http://www.launchmw.com/agenda

If you have a mobile, wearable or IoT startup, you may still be able to get a table for free.

If you are a founder or developer of a startup, there are still tickets left. Go to the following link:

https://launchevents.typeform.com/to/teIHVi

However, if you are an investor, you can buy your ticket at the following link:

http://www.launchmw.com/tickets

More info about LAUNCH can be found here:

http://www.launch.co

See you there!

How to Participate in an IPO for only $100

If you haven't heard about the LOYAL3 brokerage firm, you should. The company allows investors to invest as little as $10 in a variety of stocks, without having to pay a commission. Enrollment is very simple with just three steps and takes only a couple minutes.

$10 Minimum Investment

You can buy full shares and partial shares based on the dollar amount, and you have the ability to invest one time or automatically on a monthly basis. There are no account management or account minimum fees. LOYAL3 receives compensation by performing various services for companies on its platform, and charges them for those services. Click on the link below for more information on the commission-free stock investing.

Invest Fee-Free. LOYAL3 is the only online stock platform that charges $0 fees. Enroll!

IPOs Open to Small Investors

More importantly, LOYAL3 participates in various IPOs, which allows the small investor to get in on some stock issues that are usually open to just wealthy investors and institutions. Some of the IPOs and follow-on investments that LOYAL3 has participated in include AMC (AMC), GoDaddy (GDDY), GoPro (GPRO), Virgin America (VA), and Dave & Busters (DAVE).

As a matter of fact, they are currently participating in an IPO for a major tech company, which is expected to price this Monday, October 5. Click the link below to sign up for the list of upcoming IPO opportunities.

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You are not guaranteed that you will get the entire amount that you request. The minimum investment is $100. In addition, there are maximum investment limitations for the IPO. Plus, you need to have the funds available in the account in order to get shares, so I recommend that you open the account now and fund it so that you are ready when the next IPO that you are interested in comes out.

The LOYAL3 brokerage firm is a member of FINRA and SIPC. In the interest of full disclosure, I have an account with LOYAL3. I participated in two of their recent IPOs, and made roughly 60% the day the stock went public for one of the stocks and 30% the first day for the other stock. The sign-up process is easy and the customer service is superb.