We had an interesting chat with Mr. “Rick Duree”, Chief Firestarter of the Missouri- United States based startup “XLR8″
Below is the interview we conducted with him:
1. What is it exactly that you do and what your start-up is all about?
XLR8 is the social matching and communication platform for entrepreneurs. We connect people based on what they are doing and what they need using our proprietary matching engine. Our platform connects entrepreneurs with collaborators, funders, mentors and resources in their community and beyond, allowing entrepreneurs to spend less time searching for the what and who they need and more time building their dream into reality.
2. When has your startup been founded? And what stage is your startup currently at?
XLR8 was founded in June 2014 and we launched our beta platform to a semi-public group of users on February 5, 2015. We began selling our concept late in the third quarter of 2014 and started selling the completed site in the second quarter of 2015. We are near the end of the validation phase with a growing base of paying communities.
3. What is your startup’s business model and how does it work?
XLR8 follows the Lean Startup model of acquiring customers as the product is being built, lining up development with customer demands and launching with revenue coming in. Customers pay a monthly base price for their users to register and use our platform with options for additional fees for access to analytics specific to their community.
4. How did your team meet? And who in your team does what?
Founder Rick Duree, is the Chief Firestarter who brought the XLR8 team together. Kyle Scanlon, XLR8’s Head Ninja, is in charge of all sales activities. Lead Algorithm Guru Joe Shehata joined the XLR8 team after doing some contract work early on and now handles full stack development. Andrew Tessmer, XLR8’s Swiss Army Knife was recruited to handle everything from marketing to content development and procurement after working with Rick on other ventures.
5. What, exactly, makes you different from existing options, what will make your product and/or service stand out in the marketplace? In other words what’s unique about you and what’s new about what you make?
Our intelligent matching algorithm connects entrepreneurs to mentors, investors collaborators and resources based not on who they already know, but on what they are doing and what they need. Instead of relying on “serendipitous collisions,” our platform intelligently connects entrepreneurs and collaborators, reducing the time spent searching for the right people and increasing time available to creating the good or service and building the business.
6. What is your growth like? And what milestones has your startup achieved so far?
We launched our beta in February 2015 with the benchmark of publicly launching our platform with 60 active communities. We beat that goal and currently host more than 90 communities including the National Business Incubation Association, Arete High Performance Advisors and Emerging Leaders Association. Our projections show us recouping all investments by the end of 2015 and meeting our benchmark for company wide raises as well as potential for adding an additional team member.
7. Who are your competitors? And what is your start-up’s competitive advantage over them?
There are a number of online initiatives that seek regional collaboration: 805 Connect, regional chambers, Evis Thrive, and unquantifiable regional event calendars. 805 Connect is a similar website in California serving only the 805 area code. Unlike 805 Connect, XLR8 isn’t limited geographically and we intelligently connect entrepreneurs to specific individuals based on what they are doing and what they need, not simply because they are in the
same community.
8. What obstacles did you face and how did you overcome them?
Our biggest issue faced was our price point being too high for customers to pay when it came time to sign the contracts. The solution to this obstacle came via informal market research, and we were able to create a tiered structure that allows champions to select the elements they need and stay under the limit that required board authorization.
9. What are the key things about your field that outsiders don’t understand?
First, we are not like LinkedIn in that we connect entrepreneurs based on what they need and what they can offer, not on who you already know. Second, our algorithm can be customized to integrate into any vertical. Third, we are classified as a tech company but at our core we are all about bringing people together and building communities.
10. Why are you going to succeed?
Even in our most trying times, our team has always had the confidence that XLR8 will be a success thanks to our optimistic outlook and ability to embrace the inevitable pivot(s) that come along with launching a startup. Also, the fact that we now have communities from across the country seeking us out and requesting demos and people willing to pay for what we’ve built is always a nice reminder that we are on the right path.
11. If your startup succeeds, what additional areas might you be able to expand into?
When XLR8 succeeds we have plans of expanding into the Angel Investment and Venture Capital arenas. We also seek to explore the IP acquisition landscape. Furthermore, we seek to explore integrating our platform into various verticals including the franchise and elder care industries.
12. Why did you choose this idea and concept to build your start-up based on?
The concept for XLR8 came about through a meeting between me and St. Louis based serial entrepreneur Paul Heirendt. Separated by less than 20 miles and the Missouri River, we had never met and were introduced via our shared banker. This random introduction sparked the idea and gave proof that entrepreneurial connectivity was lacking and needed to be fixed.
13. What have you learned so far from launching your idea?
We’ve learned that pivot is not just a buzzword but rather something you must do in order to achieve success as a startup. We’ve also learned to thrive in a the startup world that runs on interruptions and a fair amount of chaos. Among the countless lessons we continue to learn is the importance of having a space where we can work as a unit without the reliance on video chats, phone calls and emails. Lastly, we’ve learned to have fun and love what we do!
14. Six months from now, what’s going to be your biggest problem?
The leanness of our team will be our biggest problem. Staying streamline is advantageous now, but due to the increased growth we’ve seen and anticipate, we will not be able to provide the same level of personalized customer service without the addition of team members.
15. What’s the benefit for the customer/user?
The benefit for the XLR8 user is the ability to quickly and efficiently find the exact right people and resources need to build their product or service. XLR8 allows users from rural, suburban and urban areas to connect and collaborate without the need for long distance travel, thus increasing time available to building the business with like minded individuals.
16. How did customers / users find out about you?
We took a grassroots approach to marketing XLR8 during our extensive trips throughout the United States in the early days and we then followed up with these communities to solidify relationships. Users are notified of XLR8 via their community champions who have a vested interest in users onboarding onto their community portals. We also partnered with NBIA to provide extended interviews with attendees which were also published on XLR8 via the NBIA portal.
17. Who are your current customers / users? Who are your target customers / users?
Our current customer-base is fairly focused within the entrepreneurship vertical and we primarily attract leaders of coworking spaces, incubators, economic development centers and chambers of commerce. Our current customer-base mirrors our target customer-base closely, though we are missing the business school deans as customers. Universities have often expressed the need to connect their students to enhance campus collaboration.
18. Where do new customers / users come from and what makes new customers/users try you?
New XLR8 customers come about in a number of different ways. We’ve established a partnership with the National Business Incubator Association (NBIA) which has given us a list of over 2,000 warm leads for demos. We’ve also established a number of new relationships at various trade shows and networking events. We’ve recently added a “request a demo button” to our site, which has driven quite a few new customers to contact us and try our platform for their community.
19. What do your customers / users say about your product and/or service?
Community Champions express that XLR8 could improve the ability of their small staff to communicate effectively with their entire community and their analytics dashboard increases their ability to better measure the effectiveness of their events and quantify how many worthwhile connections were made at the event. Furthermore, customers say they love the fact that they can embed our matching service directly into their own websites.
20. How are you going to scale?
We have visited more than 120 different groups across 12 states, including community leaders running accelerators, EDCs, Chambers, angel/mentor networks and universities. Once several member communities are formed in an area, our sales team connects to the next hub region. We’ve identified well over 2,000 potential communities in the U.S. alone, with thousands more internationally. We see potential for growth in other verticals including the franchising and elder care industries.
21. What’s the biggest missing feature? The one thing customers/users keep asking for?
One thing the various customer groups we work with request is a place where they can sell customized entrepreneurial resources such as training services, white papers, best practices, ebooks, etc to our very targeted user-base. Because of this request, we are building out an XLR8 Marketplace that will allow communities and content providers to sell their content at a discounted price to XLR8 users with a revenue sharing model that would be a welcome revenue stream for our partners.
22. Are you going to internationalize? And if yes how are you planning to expand your start-up’s operations accordingly?
We seek to internationalize using the same sales approach we have in the U.S. We will hire to sales directors in various international markets including Southeast Asia, and will then allow them to recruit representatives for various regions within their markets. XLR8’s commision model allows us to scale without much upfront cost and our interface is easy to translate into various native languages.
23. How big do you think you can get? Why? And how you are planning to achieve your goals?
XLR8 has the ability to become an international company with a relatively small workforce in the early stages of internationalization due to the structure we’ve created and the core team we’ve built. We have a dedicated team committed to growing XLR8 and we will achieve our goal of internationalization by implementing our scalable revenue model and organizational structure.
24. Are you looking to hire a new workforce? And if yes, what job vacancies do you currently offer and where can potential applicants contact you at?
We are currently not looking to hire a new workforce as we are attempting to keep our overhead low as we recuperate or initial investments from building out the platform, API, app and marketplace.
25. Are you looking for partnership opportunities or funding from Venture Capitals (VC) or other funding sources? Or your business is self-sustainable? And if the first option applies where can potential partners / investors contact you at?
XLR8 is not actively seeking VC or angel funding at this time, though we are open to discussing a deal with those interested in investing. Angels or VCs interested in discussing early stage funding can email Rick@xlr8.org.
26. What advice do you have for fresh entrepreneurs?
Whatever pricing you choose for your products you have to bake into it employee errors, inventory cost hikes, and sales slow downs. Everybody gets pricing wrong. Do your research and hope for the best. It took us three tries to get our pricing structure right and we may even have to change it again sometime down the road.
27. Finally, do you have any other comments that you would like to add?
If you are an entrepreneur seeking collaborators, investors or mentors we welcome you to create your profile on XLR8.org and start connecting with the people you need to take idea from a dream to a reality.
