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NJ TECH 70

Startup Teardown:

Hooch | Explain Everything

 

MARCH 15 2016

Contributed by NJ Tech Meetup member, Gil Olsen.

You know the drill... at each NJ Tech Meetup, companies get 5 minutes and a brief Q+A to pitch whatever is most valuable to their mission... new users, new talent, an introduction to an investor for their next round, or, if they have their priorities straight, the coveted NJ Tech Audience Choice Award.

The "Startup Teardown" is a new format for previewing the pitch companies.  

I some armchair analysis on the company, and then offer a critical first impression and place bets on their performance in the Meetup and in the market.   

I hope the feedback offers the companies useful feedback from a blind user

First up....

There are roughly 50 million kids in K-12 US schools.  About 2.3M (~4.5%) are using tablets.*  

10% of those tablets use an interactive whiteboard app called Explain Everything.     

Explain Everything is an Interactive screen casting and whiteboard mobile platform primarily for K-12 use.  The company of the same name was Co-founded by Bartosz Gonczarek, Piotr Sliwinski, and Reshan Richards they have a team of 35 based in NY and Poland.  In May of 2015, they raised a $2M Series A from 4 Venture firms and a handful of Private investors.  They are launching a collaborative version of their whiteboard in the US tomorrow (March 16).  

The app costs $3.99, and downloads increased 500% from 2012 to 2014.  It also reach the #1 position of daily grossing apps in the Google Play Store in early November2015.  The App is also paired with a SAAS model with licenses ranging from $2.67 to $4.99 /month depending on scale and a ~16% discount for annual billing.  They have announced passing 2.5M paid iOS users.  

I guess this is how you test your way to 2.5M iOS users and #1 grossing app in Google Play.

NUMBER OF INSTAGRAM POSTS:  6                      

NUMBER OF PAID USERS:  2.5 Million

INSTAGRAM FOLLOWERS:  22 (23 now)

Any way you combine these numbers, it looks as thought the Series A round got a bargain for a real company making a real product making real money in a market that is hopefully making a real difference.

GETTING CURIOUS AND CRITICAL:

  • The stats on 10% of 2.3 million tablets and 2.5M paid users don't compute. Where do the other 2.25M paid users come from?  Are they on personal devices used in the classroom?  Professionals outside schools?
  • Who is the economic buyer?  Do they have to deal with the Board of Ed in every district? (Godspeed)  How long does the process take?
  • Who owns the content created on the platform?  What happens to it
  • What's the sales conversion rate?  Who says no, and why?      
  • How fast are schools going to get to 1:1 device deployment, and will that market grow fast enough for them?  
  • What's different about this than Prezi?  Are there any IP Concerns?
  • I want more details on users vs customers and how that plays out for their growth.
  • How will the interactive nature of the content translate to VR platforms?
  •  

*I hope you are as incensed about this number as I am.  I used to be a science teacher, and I was awarded an innovation grant to outfit my classroom with iPads in 2012.  It was a $23k investment for 30 ipads and a charging/lock cart, but I had 135 students.  When you break it down, that's only $.94 per student, per school day for 1 Year. Get 2 years out of them and that number drops to $.47.  The difference in engagement and creativity was immeasurable compared to that investment.  If you are reading this considering investments with definite ROI... check to see if there is a school near you that is not hooked up yet, find an allstar teacher and make it happen.            

Hooch is an app that provides of-age users 30 free drinks a month for $9.99.  Sign up, and you can redeem 1 drink daily at any participating venue.  They are live with over 200 venues in 6 cities and are adding about 40 new venues per week.  

They are looking to add in new features to track customer spending to let the venues know that they are getting high quality new clients instead of deal chasing free-loaders.  Down load the app and give  it a try  30 drinks for ten bucks.  

The blessing of web 2.0 is there is a ridiculous abundance of web tools to help turn and idea into a viable business that can scale digitally. The downfall of the internet age is a ridiculous abundance of web tools to sort through and decide on when you are working to turn and idea into a scalable business.  

Should you be using Trello, Asana, Basecamp or some other project management software.  Who should you use for payroll when you have 3 employees... what about when you scale to 30, or 300?  Stacklist is looking to leverage 1:1 interviews with experienced founders to review and share the tools they use to run their operations.

If you have tools you love or love to hate, share your insights with the team to help others in the community.  

GIL'S BETS:

IN THE MEETUP:  Explain Everything

Explain everything seems to have the most compelling traction and powerful product.  Sometimes great engineers aren't the best communicators though, so we'll see if they can explain how awesome they are compared to anyone from the team at Hooch, who have a super simple model that can be portrayed as the life of the party. 

IN THE MARKET: Explain Everything

I hope Hooch can strike while the iron is hot, and then iterate on some new product before competition joins the party. I don't see a clear path to monetization for Stacklist, my intuition is telling me the data they get may be helpful, but not essential.  The value is provided by the actual products and less so by the curation.  

Hands down my money's on Explain Everything for the long haul.  

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