OrderUp CEO Chris Jeffery and Millennial Media cofounder Chris Brandenburg doled out advice to startup founders gathered at The CO-OP for a discussion organized by Kinglet as part of Baltimore Innovation Week. Brandenburg, who left Millennial in 2013, was an investor in OrderUp, adding another layer to the conversation.
Brandenburg and Jeffery reflected on challenges at each stage of the company’s life that shaped the recently-acquired companies — OrderUp by Groupon and Millennial Media by AOL.
1. On building a startup
With early-stage founders in the room, talk inevitably turned to building a startup. Here are a few lessons they offered on the early work:
- Be open, be compassionate, be inspirational. Those are three managerial areas Jeffery tries to excel in everyday. Having understanding for people’s personal lives and knowing about them as people is important, he said. Part of being inspirational is celebrating wins, he said. When building a startup, there could be “10 things going wrong every single day,” he said. “Find out that one win that happened and get that win to the surface.”
- Mentors help. After some early traction, Jeffrey said he reached a point where he was confused about OrderUp’s direction. But he said help from Brandenburg and fellow former Millennial executive Steven Root ended up helping him see the company’s place. “It took someone else who’s been there, done that, and built something much bigger to be able to help see the light at the of the tunnel,” Jeffery said. A new engineer also helped, he said.
- “Pay attention to your brand every step of the way.” Jeffery said a company’s brand touches every aspect of the business, and goes beyond what a company does and how much money it makes to communicate what people believe about its offerings. Jeffery acknowledged he didn’t pay attention to OrderUp’s brand until an outside company came in. “I didn’t early on, I pitched a business and the traction we had,” he said. But focusing on brand “will take you a lot further,” he said.
- Take care of yourself. Brandenburg said he always understood the importance of the impact each new hire could make on a small company. As Millennial grew to have hundreds of employees, Brandenburg acknowledged putting too much pressure on himself as a manager as he thought about the employees and their livelihoods. To some degree, he said he sacrificed his own. He didn’t delegate enough, and wasn’t doing the things necessary to be healthy. “I was really focused on all of the people in the company and having to be perfect in order for these things to be successful,” he said.
Brandenburg and Jeffery also shed light on their roles in the process with investors and shareholders that brought both companies to the acquisition table. Here are a few takeaways:
- Don’t give up. Reps from Revolution Ventures said it during their Rise of the Rest stop in Baltimore, and Jeffery said it during the conversation: OrderUp’s first couple of pitches to the D.C.-based firm founded by Steve Case did not go very well. But they kept coming back, and eventually got the firm to lead a $7 million Series A. “We finally got our legs underneath us, we didn’t give up,” Jeffery said.
- Go west. Jeffery acknowledged a couple of moments of diverging strategic views among OrderUp’s board. One was whether he should go to Silicon Valley to meet people like potential investors, and plant OrderUp’s flag in the center of the startup universe. When he eventually took the trips, connections made eventually led to interest from Groupon, which Jeffery said was “unsolicited.” He advised startups to “be out in San Francisco as much as you possibly can.”
- Bought, not sold. Jeffrey cautioned against startups pricing themselves out of an acquisition by raising a Series A or B round at such a high value that larger companies wouldn’t be interested. OrderUp was looking at potentially raising a Series B round, with an eye toward a larger deal down the road. But given the many players in the food delivery space and the value they’re attracting, they decided to take the acquisition now. “As a company you always want to be bought and you don’t want to have to sell,” he said. When considering what investors will want to see, Brandenburg advised to map out business metrics that will be trigger points for raising money.
- Think long. “It’s a lot more fun going public than being public,” Brandenburg said. After Millennial Media’s IPO in 2012, he said the company raised $132.6 million. But, in Brandenburg’s view, the company didn’t use the money as short-term thinking set in. “There were opportunities in hindsight we should have taken with that war chest,” he said.
- Integration after acquisition. At both OrderUp and Millennial Media, it remains to be seen how the companies will merge their existing capabilities with the bigger companies. Jeffery said OrderUp remains optimistic that its team and tech will help Groupon develop its newly-launched online food delivery service. Brandenburg said he didn’t have direct involvement in the Millennial-AOL deal, but said it represents a “good opportunity for both companies” as long as they integrate the two companies’ offerings well.
3. What Baltimore needs
The two founders also reflected on the growth of Baltimore’s tech scene in the time they’ve been a part of it. A couple of thoughts on this front:
- More wins. “Wins” like the two recent acquisitions can help Baltimore grow the startup community, which in turn can help how the community is perceived. Brandenburg pointed out that Millennial Media grew out of Advertising.com, which was acquired by AOL in 2000. He said the potential founders created by those deals create a “ripple effect” of people creating new companies, and investing. Jeffrey said he can “sleep well at night” with the Groupon deal, and didn’t think it would be his final act in the startup community. On the question of the city’s image, Jeffery said he faced questions about why OrderUp was in Baltimore while he was raising money amid the riots that followed Freddie Gray’s funeral in the spring. In turn, he pointed out an effect of the OrderUp acquisition was that Steve Case visited Baltimore on his recent Rise of the Rest tour.
- More VC. Brandenburg brought up access to early-stage capital as the first challenge that Baltimore faces. If there were more money, he said, Jeffery wouldn’t have to travel to the West Coast to raise money. As with wins, more money would also lead to more startups because of the increased dollars that are available. Along with investors, the public sector can also play a role, Brandenburg said. “I don’t think we have any lack of talent here, I just think there are some of the infrastructure pieces we really need here that are sort of lacking,” he said.
- Support each other. To grow the community, both speakers encouraged Baltimore residents to support local startups. Jeffrey said more food delivery companies are moving into the city, but supporting local companies can help them grow. “The more you can support the companies that are here, the more ripples there are going to be,” Brandenburg said.