Founder Institute: Gabe Weinberg went from startup failure to $10M exit with mentorship

Get a mentor and launch small updates to your product frequently.

Those were two of the bigger takeaways from a moderated discussion between angel investor and DuckDuckGo founder Gabe Weinberg and Wizehive cofounder Mike Levinson, who was also a founding partner of the DreamIt Ventures accelerator.

The event, moderated by Executive Leaders Radio host Herb Cohen, took place last week at Center City accelerator Seed Philly as part of the rollout of a local chapter for the Founder Institute, a months-long entrepreneurship class billed as a startup accelerator that is setting its sights for Philly to be one of its 40-plus markets. This was the second of eight meet-ups for interested applicants leading up to the kick-off of Philly’s first session of the Founder Institute after Philly Tech Week, from April 30 to Aug. 13

Cohen had Levinson and Weinberg talk about what they’ve learned in their entrepreneurial careers.

Levinson, a self-described “consensus builder,” stressed the importance of gathering feedback from independent-minded customers, adding “you can test many of your key assumptions very affordably now.”

“I wish I’d hooked up with a mentor the first time around,” said Weinberg, when asked about his biggest regret as a first-time founder of an educational software company out of college.

Though his first venture failed, Weinberg went on to found a social startup, while initially splitting time between the company and four-hour days as a software consultant making $50/hour to pay the bills. He was able to make a $10 million exit to Classmates.com.

When asked about the right time to seek venture capital, Weinberg, who raised a $3 million round for DuckDuckGo in 2011, said he aims to first prove his concept with a basic product, and then seeks venture capital to fund iterations.

“Once [DuckDuckGo] gained traction, I had all these ideas about features to add, and I needed to get money,” he said, adding that he talked to 40 different VCs before finding a fit.

Levinson, whose first company PTS Learning Systems grew from two to 200 employees and made $30 million in revenue, said the drive to continuously iterate is a part of the entrepreneurial mentality.

“When I was a kid I’d build Lego towers, tear them down, and build them up again,” he said.

That spirit is what Weinberg and Levinson, both planned mentors for the Philly Founder Institute, say they want to bring to the class.

RealFoodWorks COO Mike Krupit is leading the charge to launch the local chapter, along with Cohen, the event’s moderator, and consultant Bob Solomon.

According to Krupit, Institute directors are looking for 30 people to apply to the program between the first two events, in a search for social proof of concept before deciding whether or not to launch the program March 17.

Last Week Solomon and Krupit began the first meet-up on Feb. 28 by addressing questions from about 30-40 applicants in attendance. In case you missed it, here are a couple of the major topics they covered:

1. Directors are expecting between 70 and 80 applicants, and a 50 percent acceptance rate. They anticipate three-quarters of participants will work on tech start-ups, but start-ups from any discipline are more than welcome to apply.
2. In Founder Institute’s track record across 40 cities internationally, 90 percent of participants complete the course, 75 percent come out of the process with a company they’ll continue after the course, and 42 percent of companies are able to earn outside funding.
3. Solomon and Krupit have honed in on a course cost of about $795, previously reported by Technically Philly as between $600-$700.
4. The application consists of two questions requiring two-to-four paragraph responses:
   • Why do you want to be an entrepreneur?
   • Discuss a field you are passionate about.
5. Students are required to incorporate their companies upon completion of the course.

RSVP for the program here.

The program will set milestones for participants to test company assumptions throughout the class. According to Solomon, an example assignment may entail driving 5,000 visitors to a landing page. The task may seem daunting to a first-time entrepreneur, but Solomon says not to worry, “we don’t assume
applicants know anything about starting a business.”

A total of 3.5 percent of each company’s equity is entered into a graduate liquidity pool, with 40 percent of each pool’s returns going to the Founder Institute and its directors, 30 percent going to program mentors and the remaining 30 percent going to fellow graduates.