Updated Branding & Style.
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Bridge Funding – Our effort to raise a large round ($1.5M) is going to have to wait until the spring. While there’s a lot of interest in what we’re doing, our product development has been slow (see challenges below). With our product in the market and partnerships in place, we’ll have a far better time putting a large round together in a few months.
After consulting with several investors and mentors, we’ve pared down our team and are working on a $250K raise for 6 months of runway to get our app to market, generate revenue, and close some of the exciting deals we’re working on (see successes below). Currently we have $100K committed to this $250K round and are looking at some other funding options as well.
We’re putting the call out to our current investors to participate in this bridge round to help us keep the momentum moving forward on building the world’s first carrier store. Email me for more details.
1. Welcome to the team Vijay Anand
As most of you know, our technical co-founder left the company this summer (see challenges below). Our lead engineer David is a gifted engineer/developer/scientist, but neither David nor I have a gift for technical software project management. After trying several combinations of doing it ourselves, bringing in various potential CTO candidates, and outsourcing project management, we met Vijay.
Vijay spent the first 16 years of his career working for AT&T, so he knows our industry intimately. He then started and ran his own IPTV company as the technical co-founder, and recently sold that successful business. When I met Vijay I instantly knew he could help us, and help us he has.
Vijay has turned our product development, research, and engineering efforts completely around, which has taken a huge weight off of me. Vijay believes in our mission and our idea, and has become an integral part of our team in a short amount of time. He works in his gift of building things while I work in my gift of evangelizing. I’m honored to work with him.
2. Product Development is in overdrive
When you have the RIGHT team in place, things go much more smoothly than when you don’t. With Vijay’s help and a ton of great support from Mighty 8th Media, as well as a doubling down of effort by our team, we’ve made huge strides forward on our product development.
Our Android app is four weeks away from hitting the Google Play store, and the iOS version will follow soon thereafter. Vijay is leading the product development, David is writing the software, Nicole is building the world’s most detailed and accurate database of wireless plans and negotiating partnerships with carriers for affiliate relationships, Kate is writing the content for the app screens and website, and Mighty 8th is designing the screens for the app and refreshing our branding.
For the first time since Techstars, we’re hitting on all cylinders and making a huge push forward towards launch.
3. Partnerships moving forward too
Last update I mentioned that we had successful meetings with Tracfone, Republic Wireless, and GoGo. Since then we’ve taken the next stop with those potential partners and also met with USAA, Target and IAC.
USAA has 11M mobile users. Putting our technology into the USAA app would help millions of military families and veterans find the right wireless plans for their needs, and give us a ton of exposure and learning (and revenue).
We met with Tracfone in Miami and discussed building a version of our carrier store that’s specifically Tracfone branded. As they represent 10 brands, each one catering to a slightly different user base, this makes a lot of sense for them and us.
IAC is a really interesting opportunity. They represent some of the largest online properties in the world such as Angie’s List, HomeAdvisor, Match.com and Tinder. We’re meeting with them in NYC next month to continue the conversation.
Our conversation with Target took an interesting turn. They liked what we are building a lot, but were really interested in us helping them clean up their in-store retail of pre-paid SIM cards and plans in the form of a kiosk. Ironically David and I actually have a lot of experience with kiosks, and we are working with their head of Consumer IoT Mario Ingram in SF on what that might look like.
That led to a thought about physical SIM distribution in airports as well, which we intend to share with GoGo later this month.
1. Building the RIGHT team
We had a really tough summer at Candl.
About a month after we returned to Atlanta from Techstars, our technical co-founder left the company. It was not a pleasant experience. In fact it was the single hardest thing I’ve endured in my 20+ year career. Watching the thing I poured every personal financial resource and waking thought in to for more than a year being ripped apart by someone I trusted and loved…it nearly broke me.
It took two months and too much money to end that drama. I leaned on several mentors, advisors, shareholders and investors during this period of time, and I sincerely thank all of you who helped Candl through that awful ordeal.
Our Managing Director from Techstars, Natty Zola, warned me that the next few months would be some of the loneliest of my career. He was right. I’ve never felt loneliness like that. The weight of building a world-changing technology without a technical co-founder was brutal.
Flirting with exhaustion and burnout, trying to run both the product and business aspects of the company, resetting the culture, dealing with the legal stuff, searching for the right engineers & designers, and finding our place in a trillion dollar industry that doesn’t like disruption, it took us a lot longer to get to where we are now than it should have.
In October, we pared the company down to four people (Kate, David, Nicole and me) to focus on product development. We added Vijay to the team a few weeks ago, which has galvanized our development efforts.
It was not a pretty process, but the team we have today is far better and more dedicated to the right things than the team we had at any point in our history.
2. The hundreds of things that go wrong.
If you’ve been reading my updates for a while, you get a sense that I’m usually a positive-minded person that focuses on what’s going right and doesn’t dwell on what goes wrong too often. I do this for two reasons:
First, I’m an evangelist focused on a big idea, and my job is to keep everyone looking at the big idea.
Second, shit happens. It always happens. Dwelling on the things that don’t go well changes your focus from the goal to the obstacle. Even after these awful challenges we’re still focused on driving this bus straight down the throat of the entire wireless industry.
But even I reach a point where the obstacles take a serious toll. For nearly two years we’ve managed to find a way through one hell of a roller coaster. We’ve had hundreds of setbacks big and small. And they have taken a toll on the entire team. Now, just as we’ve finally nailed the business model down, begun to develop huge relationships, and get serious traction in product development, we’re running low on funding.
3. Funding a moon shot.
With our app weeks away from launching, and with several really big partnerships just a few months away, we’ve nearly reached the end of our seed funding. The problems we encountered this summer with our technical co-founder leaving and a few attempts at a replacement not working out (until Vijay arrived) took several months off of our runway.
This winter will have one of two story arcs. One is we never recovered from the departure of our co-founder and the damage he did on the way out. The other is we survived a tough crisis and became that much stronger of a team because of it. All of us at Candl definitely prefer the latter, and we’re doing everything we can to keep working on our moon shot.
(8) at NDA stage (up from 3), working towards LOAs
GoGo, Tracfone, Republic Wireless, USAA, Target, IAC, Vodafone, Bon Voyage Connections
II. PRODUCT DEVELOPMENT
– Android App
We are in sprint 2 of a 4-sprint cycle to launch the Android version of our Carrier Store.
– iOS App
When the Android version is complete, we will build the iOS version. iOS restricts device information more than Android, which is why we’ve focused on Android first.
Five areas of protection identified (up from 4)
The people we identified to help us with this didn’t work out. I’m writing the abstracts myself at the moment.
1 month runway (December)
Candl runs out of money in early December. We have $100K committed to a $250K raise that will sustain us until April when we can raise a larger round with more traction in revenue, product development and business partnerships.
Closing Thought: The ride of your life.
I’m 42 years old. This is the second startup I’ve founded. I have an MBA and served in the Army. I’ve closed hundreds of millions of dollars in business in my career, managed a $1.2B product line, built my first startup to 35 employees, and took this one through Techstars. I have access to some of the greatest investors, advisors and mentors in the startup world.
And even with all of that experience, I am human. Like all of you, I make mistakes.
When my co-founder left Candl, it killed all of the momentum we had coming out of Techstars. I spent the next five months throwing all of my energy and spirit at not letting the company grind to a halt. And wound up grinding myself down in the process.
During that time I did what I do best – evangelizing our dream and building the business side of Candl. I built a team of amazing entrepreneurs – marketing, business development, operations. And the progress we made was phenomenal.
We tried out a few ways to keep the engineering side of the company moving forward. And this is where I fell down.
David and I tried to run the product development side ourselves. We tried a distributed approach to project management. We brought in a few contractors to trial them out at head of product / head of technology. None of that worked.
I know myself well enough to know that I’m half of a whole. I never intended to be a solopreneur. And while my relationship with my former co-founder ended tragically, I knew I needed to fill that gap quickly.
It took five months and most of our funding to fill that gap.
It wasn’t until Vijay joined us that we found the right person to lead the technology side of Candl. I wish we could have gone through Techstars with Vijay on our team. But that’s not our story.
Our story isn’t fully written. Like the refugees we hope to help someday, we face tremendous obstacles on a daily basis trying to do something difficult. And, like those courageous souls who fight the odds to do something good with their lives, we’re still here, staring at the next wall, trying to find a way around it.
Every startup goes through these loops of insanity, this roller coaster of a ride from idea to profitability. Some get to go through it more than once.
Two very interesting stats come to mind:
– 60% of startups that fail do so because of founder issues. We intend to be part of the 40% that survive the kind of awful drama we endured this summer.
– For 45% of the startups that are successful, the top factor in their success is timing. I’m convinced that our timing is perfect. We are watching the beginning of a major format change (physical SIM to eSIM) and an overall change in how people purchase virtual goods like video content and connectivity in general.
With your help, we will continue the ride. Because damn this thing is worth fighting for and worth building. I know you all believe in our vision as much as we do, and I hope you can help us build a bridge to the next loop.
We’re looking for an additional $150K in seed funding to get us to the spring. If you’ve made it this far in this investor newsletter, hopefully you understand how much passion and drive go into Candl by not just me, but the entire team. Help us make this big push, knowing that this team has been battle-tested and still 100% strapped in to the roller coaster, ready for more.