Conversations #85: Monthly Mentor Panel – Starting Your Startup

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Stacy Devino, Evangelist at Women Who Code and Senior Staff Engineer at Fanatics Inc., sits down with Esther Bobbin, Founder and Executive Director at United by Chocolate and Director of Operations at Rho Impact, Haley Demos, Full Stack Developer, Megan Groves, CEO at Population, and Rose Johnson, Cofounder and CTO at Exposure, for the discussion, “Starting Your Startup.” They share their path to their current roles, experiences founding startups, and thoughts on funding.

SD: Did any of you know you wanted to be a company founder early in life or your career? 

RJ: I knew early on that I wanted to be an entrepreneur. I’ve never gotten a W2. I’ve never been an employee. I started from the beginning, knowing I wanted to start my own company. At that time, 30 years ago, there was not as much brand science as we have now regarding marketing. I was my brand. At that time, I decided, “Hey, I’m going to trust me more than anyone else. Let’s see how this all works out. I will live on faith, go out there, and start my own company.” 

HD: I did not think I would be a founder. I wanted to do biomedical engineering and had a particular track. I realized in the middle of it that it wasn’t speaking to me. I ended up on a whim taking a startup class at Startup Aggieland. I fell in love with not only the idea of starting a company but the idea of being very passionate about what you’re doing in a way that’s also helping other people. 

MG: There were early signs of being an entrepreneur. In my early childhood days, I picked daffodils from the field behind the cul-de-sac and then resold those to my neighbors for a nickel a bunch. That was a pretty early indicator of that spirit. I came from quite a long lineage of entrepreneurs in various businesses. I think this notion of working for oneself was already kind of ingrained. When I was doing my MBA, I knew there were two paths for me. One was to help facilitate the growth of other people’s companies. The next obvious choice was to start my own company. 

EB: It’s also in my DNA, but I kept ignoring it. I had heard great stories about my grandma being entrepreneurial. My dad always supported the idea of entrepreneurialism. Grad school opened my eyes. Then, getting into the world of chocolate, trying to make a change, and butting my head against the wall, I had that aha moment like, “Okay, just do it yourself, get it done.” That was the pivot for me into actually being an actionable entrepreneur.

SD: What was the first company that you founded? Why did you found that first company? Was it out of circumstance or passion? 

MG: My first company was something that I started when I was 23. It was sort of born out of a need. Typically, the founder has a real connection with the problem they’re trying to solve. For me, it was very personal. I spent seven years of my life quite ill. As part of my recovery journey, I’d gone down the rabbit hole and was interested in natural medicine, nutrition, herbs, and various alternative medicine paths. I thought, at first, the next step was to become a doctor. Instead, I decided to set up a wellness center with various treatment rooms, an educational platform, and the ability for other people to access resources that would help them on their healing journey. Five years later, I sold it to a retired NFL player.

RJ: For me, it stemmed from me being a technology junkie. After college, I moved back to Dallas and started working for a company called PageNet. I’d gone there as a consultant to help them with their backend office systems, journaling, accounting, etc. At that time, the only pager they had was the one-way pager. I wasn’t interested in the one-way pager, but then, all of a sudden, they started with two-way pagers while I was there. I thought that was cool. I ended up going into MCI. Then, I ended up starting my company there. I started to hire a team of management consultants who were good at voiceover IP. My journey has always been because I’m intuitively interested in technology. 

EB: It was not intended to create technology when United by Chocolate was founded, but there was that need. It grew out of the need for language translation and really empowerment for cacao farmers. I grew up in a family where my dad spoke nine languages. I’m the first generation here in the United States. It was always intuitive to have access and provide people with access to education in the language they can learn. 

HD: I founded a company, and the entire thing was based on passion. I had somebody I was close with at the time who had just gotten into vaping. I was inspired to find a way to improve that technology to try to make them safer. Before the FDA had any kind of regulations on it, many crazy things were happening with it. Unfortunately, that ended up being non-viable from a cost perspective, but it was widely used in the medical industry. Seeing how I learned so much, even from the company’s failure, is cool.

SD: Were you ever part of a startup before you founded your startup?

EB: After graduating from grad school, I made a big switch from the consulting world, knowing I wanted to get into cacao. I was very new to that industry and started working for Hot Cakes, a wonderful chocolate and bakery company in Seattle. They suggested that I help another entrepreneur with their startup in the chocolate world. Both of those experiences working with founders were very eye-opening to me.

MG: I had been around small businesses for much of my life and had started that previous small business before business school. While getting my MBA, I started consulting for several other early-stage tech companies. Something that is venture-backed and high growth is a completely different experience than a small business, just in terms of speed, grit, hustle, and expectations. It’s a whole different level of crazy. I’d recommend cutting your teeth on that before venturing out on your own if you can.

SD: How have you secured funding in this current iteration of the startup you’re in or in prior? Self-funding, investors, seed rounds, alternative investments, friends and family, what does that look like? And what can it look like at various stages? 

HD: The short answer is talking to many people, being okay with being told no, and not giving up on that. 

RJ: So my current startup is Exposure. It is an ed-tech company that specializes in esports and digital careers of the future. Our company is 100% bootstrapped. We have not sought out investor funding. It’s been bootstrapped from day one. A big part of why we haven’t needed to go the VC route is that we spend a lot of time developing our intellectual property. We were able to develop the intellectual property and get our patent done on it. COVID showed us that every single company is a digital company. We had a lot of time for the grassroots community, talking to businesses, helping to explain the connection between gaming and esports, and learning and digital careers. And for us, it worked.

MG: Numbers show us that less than 2% of all venture capital goes to women-founded companies. If you’re thinking about starting your entity, you’d better be prepared to get creative and do what you can to sustain as long as you possibly can, with the potential downside that it could take a little bit longer than anticipated to raise. That might mean looking at things like customer-led growth. That’s something I did for the first couple of companies I built. Find creative ways to sell first and deliver second. Also, there’s a ton of government grants out there. Start talking and activate your network early. Make sure that you’re surrounding yourself with the right kind of support network. That includes people who are willing to build with you and those who are willing to fund you.

EB: You will be very inclusive of your team, but at the beginning, you must consider why you are doing this. The other part of it is listening to those customers and clients because that will open doors and channel you forward. Having your finances in order from the very beginning will save you a lot of headaches down the road if you are going to raise money and be able to explain your financial story to other folks. With Rho Impact, we have been primarily bootstrapped. Now, we’re in the process of fundraising. Those financial statements are very important. 

SD: Is it fair to say that many businesses seek additional investment to get that kind of advisory capacity from various investment firms and expand their mentor circles? Especially further on, though they might already be a profitable business. 

MG: I think companies really ought to, in the early days, look for value-added venture capitalists if that’s the path that they choose to go down. A lot of VCs, in theory, know something about scaling that kind of company or already have connections that will be helpful to that company. 

SD: Let’s assume that you have your co-founders, an idea of your business, and you’ve already made the right steps regarding that initial investment. What does it look like to make the actual leap? 

RJ: Before you leap, there are some things that you have to have your house in order. Because having a startup, you are everything to this business. You’re the air, the water, the sand; you’re breathing everything for this business, and you’re not able to give everything to the business if you have a lot of other things going on in your personal life. 

SD: What do you mean by getting your house in order? Does this mean you have set yourself up to have 12 months of personal runway, or have you taken this investment from the ground stage and put it towards this one idea? What does that do in terms of your obligations? What does that do regarding how you run your business, at least initially in that leap? 

RJ: If you are bootstrapping, it will take you way more money than you ever thought it would take to be successful. You have to be in for the long haul. You need to have a plan in place if this takes a lot longer than you expect. You are going through this process of building your business. There are a lot of days when you are going to have self-doubt. You will feel that you are not being seen. Your product is not being seen. 

SD: Do each of you consider yourself a salesperson? Do you consider yourself a trustworthy salesperson? How did you become a good, trustworthy salesperson? 

HD: I used to hate talking to people. I still struggle with it on occasion. I think what drives me, and I think what drives a lot of entrepreneurs, is the passion for what they are trying to do. Talking around that kind of becomes natural when you lock into what you are trying to achieve. I don’t consider myself somebody who’s naturally good at sales, but I think that as we go through and experience those things, just channeling your passion into that makes everything a little bit more natural and helps build that trust.

MG: You are always a salesperson as a founder. You’re selling to your customers, VCs or funders, and your team, too. You’re always trying to rally them around your vision. How do you become a trustworthy salesperson? The delivery piece is important. Because if you don’t deliver, you won’t have that trust.