Startup Profile: Special
While the recent buzz around the investment is exciting (and warranted, given how Special aims to revolutionize revenue generation for video content creators), according to Cofounder, Sam Lucas, the really interesting story began five years ago – that’s when he first met Les Craig, Partner at Special-investor Next Frontier Capital, and at the time, the MSU LaunchPad, Campus Director.
MSU had only been part of the LaunchPad network for a few months in 2015 when Sam met Les. Sam pitched his side-hustle business at the time, URSA Outdoor, a rock and ice-climbing blog that also sold merchandise, and Les was so impressed with the young entrepreneurial student (he saw “inklings of greatness” he would later say) he immediately got Sam involved in the LaunchPad.
“It was incredible! In no time I was getting exposure to and connecting with students from all over campus I never would have met – designers, film-makers, software engineers – people who really knew how to build things. As a marketing student, that was huge,” said Sam. “The LaunchPad also introduced me to other students ‘like me’ who were passionate about wanting to create impact and control their own destiny through entrepreneurship.”
Identifying an Unmet Need
During his years of involvement with the MSU LaunchPad, Sam got the opportunity to coach other students and alumni interested in becoming entrepreneurs. “It seemed like everyone that came into the LaunchPad wanted to build an app – but none of them knew how to do it and none of them were willing to go to the Computer Science school to find a team member.”
So Sam did what any entrepreneurially-minded college student should do when confronted with an unmet need: he started a business. Triple Tree Software, is a software development firm that specializes in design, engineering, and product management. He founded the business with Paul Burton, an entrepreneurially-passionate, fellow LaunchPad student and engineering student in MSU’s Computer Science program, and eventually hired a number of talented peers, including Waylon Roberts and Sam Kern, that he also met through the LaunchPad.
“Paul and I are very proud of bootstrapping that business from the ground up,” said Sam. “We started in the basement of our college houses, with a bunch of roommates, and $1,000 in a checking account, and after four years ultimately built that into a seven-figure revenue business.”
Building His Network
Meeting his future (two-time) cofounder as well as the lead investor in Special, wasn’t the only critical experience LaunchPad provided Sam and team. Another was the opportunity to start LaunchCats, and what that co-curricular student organization eventually meant to his network.
“LaunchPad is a platform at the university that has authority and recognition. It gave legitimacy to Paul and I and our ideas, and got us into people’s doors with things like LaunchCats. That support instilled confidence and inspired us to work even harder on our startup. I remember there was always a sense of competition among us and our entrepreneurial peers about who was actually building a product, and who was actually making money.”
The LaunchCats club was actually a lead-gen effort to attract entrepreneurial students to the MSU LaunchPad that might otherwise be turned off by more traditional curriculum and speaker lectures a university might offer. The group met twice a month and its meetings were simple: a local executive business owner had 5 minutes to present a challenge their business was facing and the rest of the time involved interdisciplinary student teams creatively developing and proposing solutions.
In addition to filling the LaunchPad student pipeline, it also filled Triple Tree’s customer funnel. Sam found the business people would more often than not come back to him a week or two later and ask about hiring some of the students to implement the solutions they proposed. Sam also recognizes the informal mentoring and insights this group facilitated. “The minute you graduate,” said Sam, “these people get totally guarded about their business, but ‘as students’ they were completely forthcoming. It was amazing.”
Journey to $2.26 Million Fundraise
One of the lessons Sam learned by experiencing entrepreneurship through the LaunchPad was that an inventory-based business (like URSA was) brings unique challenges. “I didn’t want to spend my hard-earned money on buying more inventory that I had to sell just to get my original money back.” That’s part of what made the service-based Triple Tree attractive to him. And while to begin with he didn’t necessarily know exactly how to build an app, work with clients, or launch a product, four years later, they’ve done it all – and it led them to the idea for their first product-based business, Special.
“I think a lot of students come up with an idea – and immediately think they have to get funding to make it a reality. That is not necessarily true or the best first step. We are forever students of entrepreneurship. It is important to first learn what it’s like to sell, manage staff and accounting, and make difficult decisions around strategy first. Remember, Special is our third company!”
With the pride Sam has about bootstrapping his Triple Tree success, some may wonder, ‘Why seek external capital? And why now?’ As he sees it, the answer is simple. This fundraise will enable Special to support the founding team, scale quickly enough to capture market share, hire some content ‘rock-stars’, and execute critically important advertising. It also provides the startup enough runway to achieve a level of monthly recurring revenue that will help achieve a series A fundraising round down the road.
“When it came time to fundraise, it was actually less difficult than I had imagined because of the stepping stones we had taken as a team over the past 4 years,” said Sam. “We’d been building these relationships with people like Les, and Julie Penner, another Partner at Next Frontier Capital (and former Techstars Director) for years. We’d proven the need for the Special product because we’d already been paid to create something similar to it for two clients. And we already had a team in place that knows how to do it.”
From Sam’s perspective, the story of LaunchPad is all about the network and its impact. In his case, that meant, meeting future team members, customers, and even investors. So while it may not make the news like a million-dollar fundraise, it sure is important.
Sam’s Advice for Other Student Entrepreneurs
- Your first business won’t be your last. Sam believes students will mature and learn as they grow with their startups. “Your first idea won’t be your only idea, and there’s no shame with you not being Steve Jobs today.” Just start. And make learning your number one goal.
- Start a service business. His second piece of advice is to go work for the entrepreneur that students wish they were. Once you’ve learned everything you can from them, go start your own business providing a service in the industry that you’re passionate about. “You get to acquire new skills and get paid for it!”
- Always be looking for a great product idea. As much as Sam promotes the service-based entrepreneurial experience, a product business was always on future radar. Find something based on what your service customers are asking you to do that you can create and sell. “By the time you’re ready to do that, you’ve become well networked with customers and investors in your industry.”
You can read more LaunchPad Student Startup Profiles here.