Mentorship program helps new company find its niche
- December 29, 2010
Two young entrepreneurs signed up for a Blacksburg mentorship program in June. By November, they had developed a social planning application that now is being used in mobile devices.
The application, called Heyo, was created by Frederick Cook and Rishi Ishairzay. Heyo lets users plan social events by sharing with friends where they intend to be in coming days. Information about the location of friends is shown on a constantly updated list. “There’s no way we would be where we are today with our company without the [mentorship] program,” Cook says.
Cook and Ishairzay were the first to be accepted to DayOne Ventures, a highly selective, three-month summer mentorship program for technology-based startups. The program provided the entrepreneurs with $12,000 of seed funding and furnished office space in Blacksburg with high-speed Internet. It also supplied them infrastructure, brand development, financial planning and legal assistance, all free. Rackspace Hosting, VT KnowledgeWorks, LeClairRyan and GenTek Ventures supplied the services. In exchange for the package of cash, office services and mentoring, DayOne receives a 4 to 6 percent equity stake in the emerging business.
“The DayOne program is designed to help companies go through the beginning process much faster than if they were on their own,” says Bill Boebel, vice president of strategy at Rackspace and mentor at DayOne Ventures. “We were looking for passionate, smart entrepreneurs who had a reasonably good idea.”
Boebel, who was lead mentor for Cook and Ishairzay, started a private e-mail hosting firm called Webmail.us in 1999. He was forced to change his business model two times before finding success and selling his company to Rackspace in 2007. “I wish something like [DayOne] existed when I was starting my business,” Boebel says. “It would have saved us a lot of time.”
Cook and Ishairzay initially pitched a health and fitness social network, an idea that Boebel thought had potential. “Even though the fitness base is a niche market, [consumers] spend a lot of money on product gear,” he says. “But nothing seemed like the big idea to bet it all on.”
Boebel encouraged Cook and Ishairzay to strive for a concept that could be used by a larger group of people. He wanted them to think the idea through, looking at what already existed in the social network space and seeing what had been successful and what had failed.
In July, Boebel helped Cook and Ishairzay switch to developing Heyo, which is now available free for the iPhone and Android mobile devices.“For location-based app platforms, the eco system is very young,” Cook said. “Right now we’re building something that people want to use, and keeping an eye on location-based advertisement space. We hope to roll into those services as they mature.”
Cook said creating the application was the most fun and the most engaging experience he’d ever had. He and Ishairzay worked 14-hour days seven days a week, time spent mostly writing code for their product. The seed funding ensured that they did not have to work other jobs and could focus solely on their startup.
Cook, who received a master’s degree in engineering mechanics from Virginia Tech in 2009, says the workload was not much different than being a graduate student. “You have expectations, but no one is telling you what to do,” Cook says. “Having a company, working for ourselves and doing something that no one else is doing is much better than anything I’ve ever done in academia.”
The program formally ended for Cook and Ishairzay on Aug. 15, but the mentoring has not stopped. They will have access to their DayOne office until next summer, when the mentorship program will fill the space with a new company. Cook and Ishairzay have decided to base their company in Blacksburg as they pitch the business to potential investors. They are currently looking for engineers to help grow their product.
Boebel, who will stay with the company as an adviser, says that Cook and Ishairzay likely would have reached this point even without DayOne. “It just would have taken them much longer,” he says.