Latest / NC Tweener Talks / Chris Heivly: MapQuest Co-Founder ($1.2B Exit), Triangle Startup Factory, Build the Fort, and More

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Chris Heivly: MapQuest Co-Founder ($1.2B Exit), Triangle Startup Factory, Build the Fort, and More · NC Tweener Talks

• 00:00:03 - Chris Heivly Yeah. The funny thing is if you think about we build a digital product and that should save lots of paper, but we probably killed more trees of the people printing those directions than anything else. But I will timestamp this. This is nine years before Google Maps comes out. Nine years. So that's how early we were. And you know, we were a big early Internet welcome to Triangle Tweenertalks, a weekly podcast by Builders for Builders where. 00:00:36 - Scot Wingo We explore the startup journey from the idea to the exit and all the lessons in between, with an exclusive focus on founders from the Triangle region of North Carolina. Now here's your host, serial Founder and General Partner of the Triangle Tweener Fund, Scott Wingo. 00:00:52 - Scot Wingo Welcome to this episode of Triangle Tweener Talks featuring Chris Hively. This episode is brought to you by our amazing and awesome sauce sponsors, including Robinson Bradshaw, a full service business law firm with a passion for supporting the Triangle's entrepreneurial ecosystem. Learn more about Robinson Bradshaw startup and venture capital practice@robinsonbradshaw.com Eisner Amper formerly HPG, one of the world's largest business consulting firms with a dedicated technology practice offering outsourcing, accounting, tax and advisory services. Eisner Amper's experienced professionals serve more than 2,000 technology companies from early stage startups to public enterprises. 00:01:31 - Scot Wingo Discover how Eisner Ampere's stage specific solutions and industry expertise can help you achieve your milestones whether startup, international expansion, M and A or IPO. Visit eisneramper.com tech for more details. ATG Aligned Technology Group Are you navigating high cloud cost as a startup? 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Whitley Recruiting Partners Whitley Recruiting Partners specializes in recruiting top tech talent for growth stage startups in the Triangle. 00:02:51 - Scot Wingo They help target industry specific entrepreneurial employees who drive immediate results through a fast, accurate and scalable recruiting process. There is a special offer for tweenertalks subscribers. You can get a free survey of the local talent available for any one of your job openings. And last but not least, Extensus HR As a Professional Employer Organization or peo, Extensus empowers tech founders and growing businesses to scale smarter. They take HR administration off your plate. Yay. Managing payroll, recruiting, employee benefits and retirement plans, compliance risk and more so you can focus on innovation. 00:03:29 - Scot Wingo For over 25 years, Extensus has leveraged a people first approach, customer centric mindset and deep industry expertise to ensure employers have the tools they need to stay competitive in today's market. And finally, thanks to our friends at walkwest Earfluence for partnering with us to produce this podcast. Do you need a podcast? Call Earfluence today. Longtime followers of the show will remember I started this whole tweenertalks journey with what I call the foundational episode, and in there I revealed the framework of generations of founders. 00:04:04 - Scot Wingo The most rare cohort in there is founders from the 70s and 80s. There's maybe a handful, if not less than two handfuls. One of those founders is Chris Hively, and this story starts with a fellow Gamecock who has a love of maps. Chris tells the story better than I do, so I'm going to pause there and leave you with that cliffhanger about maps and being a Gamecock and all that good stuff. 00:04:30 - Scot Wingo But I do want to then circle back and say Chris's achievements and contributions in the Triangle startup ecosystem have been huge. He brought one of the first incubators to the area with Launchbox Digital, which then kind of morphed into the Startup Factory, which was a very active accelerator out of the American Underground from 2012 to 2016. As Chris discusses, there's still a lot of companies from that cohort that are chugging along today. After that, he worked with techstars on their global ambitions and has done a lot more that he'll cover through his career. 00:05:05 - Scot Wingo Chris has made a huge impact on the Triangle ecosystem, and for me, he is a great example of a successful founder that doesn't just disappear, he stays in the Triangle and embodies the Triangle's paying it forward spirit. In this episode you get to hear not only those details, but the why, what makes Chris tick, and what is his favorite map. Stay tuned for answers to that question and many more. And enjoy this interview with Chris Highfly. 00:05:34 - Chris Heivly From suburb of Philadelphia. So go Eagles. Go Flyers. You know, big sports family. But I went to Local college there became a geographer. I do remember the day I told my father I was going to be a geography major. And he said, son, what are you going to do with that? As we'll find out to those who don't know me, you'll find out that it worked out pretty well. 00:06:01 - Scot Wingo Yeah, let's dig into that. So you're a kid. What was interesting to you about geography? 00:06:07 - Chris Heivly I think I love maps. The maps, there's just so much there. Right. And I don't know if you remember the days of sitting with a road atlas in the back seat. Right. I mean there's so much world to explore and understand and be curious about. So turns out I think I have a very spatial, not special spatial, kind of bent in my head. Maps are about spatial stuff. At one point I said, maybe I'll be an architect, which is also spatial. So somehow there's some spatial thing happening in my head. 00:06:40 - Scot Wingo What's your favorite type of map? Like are you a topo guy or a globe? 00:06:45 - Chris Heivly You know, I love maw. I've collected over the years, like old atlases. I have, you know, 200 year old maps, you know, framed and sitting in my house. Love street maps at a time. Love topo maps. So I guess all the above is what I'm saying. 00:06:59 - Scot Wingo If there's a fire, what's the one map you save? Like, what's your favorite map? 00:07:02 - Chris Heivly Oh, shit. That's a good, that's a good question. I have one that's from like 1820s or 1840s of Europe. And it actually has, you know, kind of elevation depicted. You know, remember this is all going to be hand drawn at the time and there's, and there's color in it and there's so much detail. I could just stare at that for, for, you know, a long, long time. And I think, good to know. I gotta, you know, with my go bag, grab that map. 00:07:32 - Scot Wingo Yeah. Kind of makes you wonder like how many people, how many hours went into that back in the day? 00:07:38 - Chris Heivly Exactly. 00:07:38 - Scot Wingo Like a, you know, printed off again kind of thing. So you and I both went to South Carolina. So you're up in Philly going to school, going to naps, learning about, you know, cartography and, and whatnot. And how do you end up at South Carolina of all places? 00:07:55 - Chris Heivly So interesting, interesting time at the time we called this computer mapping. Now you know, this is kind of very early 80s. So I had took a computer mapping class which is on a mainframe and a printer. 00:08:12 - Scot Wingo Right. 00:08:12 - Chris Heivly Like a line printer. You remember those at all? And you know, this is after cards, but before PCs and. But just totally got into this computer mapping thing. And so I don't know why it, it just lit that fire. Hopefully we all have one of those moments that was mine in a computer mapping class. The professor and I just started geeking out on that and he was learning as much as I was at the time. And I'd spend hours in his office and we'd be, you know, reading and talking. 00:08:40 - Scot Wingo Is this on like a. Must have been a mainframe of some kind, was just like a Burroughs machine or a. Like digital electronics or like. 00:08:46 - Chris Heivly I wish I remembered, but I would if I'm going to guess, it's like on a Burroughs machine. And we had this, you know, this terminal right out. I think by the time I finished that line printer, which is what your interface was turned into a monitor. Right? A black and white monitor. But I end up taking about nine hours of computer science courses. So I learned how to code. So today maybe not a big deal. 1980, 81. That's a big fucking deal, right? I'm a geographer, a geography major, and yet I probably have enough course credits at the end of my term there to probably have a minor. I was always the only non computer science major. They're teaching COBOL and all that kind of crap. And I was learning, you know, I think FORTRAN was the. 00:09:30 - Scot Wingo Yeah. 00:09:30 - Chris Heivly So near the end of that, my semester there, I, I had dropped out for a while. So by the time I finished, it was December. But in the fall there, my professor's like, I, I think you need to go to grad school. And it's not like an MBA where they want you to go work for a couple years before you go to get your mba. I mean, so I. There was three places in the, in the US that had a graduate degree in computer mapping now called gis. And believe it or not, South Carolina was one of them. 00:10:02 - Scot Wingo Boom. 00:10:02 - Chris Heivly So Mic drop. 00:10:04 - Scot Wingo Innovative Gamecocks right there. 00:10:05 - Chris Heivly Yeah. 00:10:06 - Scot Wingo I mean, cakes and chicken. 00:10:07 - Chris Heivly It's really, it's. It's. Yeah. 00:10:10 - Scot Wingo Cool. So you went down there and then. So you're at, you know, now you're with your people, right? Like, tell us about the. 00:10:16 - Chris Heivly Oh my God. 00:10:17 - Scot Wingo Before you were like the misfit toy, the one dude. And yeah, probably the whole state that cared about this. And now you're with your, you know, there was a lot of them, but like, like that's a lot more. Yeah. What was that like? 00:10:26 - Chris Heivly So my professor at the time, Dr. Dave Cowan, longtime mentor and a. Just a terrific Guy ran a lab. So part of my graduate degree, I had a research assistantship. And this is pretty amazing, Scott. So he hands me this brand new thing called an Apple, sorry, an Apple Lisa and an IBM PC with two disk drives, no hard drive. And he said, so you told me you knew how to code when I did the interview. And I'm like, yeah. And he goes, well, make them draw maps. So that was my gig for a year. And they were just start, you know, they had like some mini computer, right? Which is, you know, disks about the size of a pizza, you know, that were five megabytes. God, we're sounding so old. 00:11:10 - Scot Wingo That's super expensive. 00:11:11 - Chris Heivly Super expensive. But that movement to the desktop was just happening. And so I just remember writing a lot of code and like, hey, what do you think of this? And it was one of those environments that you're just like, this is so freaking cool. You know, anything's possible. 00:11:27 - Scot Wingo At least it was way ahead of its time. It had. Was it small talk? I gotta tell you, it had an object oriented programming language. 00:11:34 - Chris Heivly It did. I wasn't smart enough to figure that out. What I will tell you, and you know, for, as you can remember for the longest time, I mean, the IBM PC was the dog, right? It had a lot more. Just the basic programming language, a compiler, you know, it had a lot more stuff ready than the Lisa. Lisa. You had to be super geeky. I wasn't that geeky. I was just. I'm an applied geek, not like a super geek. That makes sense. 00:12:01 - Scot Wingo You had to split your geek on maps and computers. I just pushed my pieces. 00:12:05 - Chris Heivly I geeked them. 00:12:08 - Scot Wingo Cool. 00:12:09 - Chris Heivly Did you. 00:12:10 - Scot Wingo Was that the type of. So that was a master's. Was that the type of program where you had to do a thesis or. I did, yeah. What was your thesis on? 00:12:16 - Chris Heivly My thesis was on mental maps. And so, God, I could barely describe this today, but you know the time. So I had another professor super, super smart. And what we're able to do is look at three different neighborhoods in Columbia, South Carolina, and ask them to draw the relative distance between using two points as a reference. How much farther are these two points? And then in kind of what direction? And when you take all of that, probably 15 to 20 of those answers multiplied by 20 to 25 people per neighborhood. The thesis was that where you live determines your mental map. Okay. Kind of makes sense, but we need to prove it. 00:13:00 - Scot Wingo Yeah. 00:13:01 - Chris Heivly We then used multiple regression analysis, had this little thing that if you could take all that data, we could map out in dots where they thought Places were as compared to reality. So to wrap this up, people downtown had a much smaller world of all the points. They all reference those things as closer than you think. 00:13:22 - Scot Wingo Yeah. 00:13:22 - Chris Heivly People out in the west remember the river that ran through it. They thought that kind of. Our thesis was that ran north, south. It actually runs more northwest to southeast. So everything was turned about 15 degrees. 00:13:36 - Scot Wingo Interesting. 00:13:36 - Chris Heivly Yeah, that was my thesis. 00:13:37 - Scot Wingo Yeah. People in Manhattan just knew Manhattan. 00:13:40 - Chris Heivly Right. And then. And their view from that is that everything is relative to. 00:13:43 - Scot Wingo To that. Yeah. Yeah. 00:13:44 - Chris Heivly So it was fun. I mean. 00:13:47 - Scot Wingo Yeah. 00:13:47 - Chris Heivly I need to do a thesis application. 00:13:48 - Scot Wingo Is when you're drawing a map, you know, there may be work scenarios where it makes sense to kind of present it that way. 00:13:54 - Chris Heivly Well, when you get down to pure cartography, I mean, we all know that, you know, river should be blue. Right. And road should not be blue because of that. But there's a lot of little rules in cartography that are based on the human psychology of how you view things. What's your spatial view of things? As an example, one of the things we learned is that later on at Ram McNally, when more prone for women will take a map and turn it to the direction they're driving, they don't do the north, south, reinterpret thing. So all that psychology is kind of part of being a good cartographer, by the way. 00:14:28 - Scot Wingo Interesting. Yeah. All right. So you get your master's, you graduate, and then how do you find a job with this very unique set of skills? 00:14:36 - Chris Heivly Yeah. I didn't know what the heck I was going to do. I was going to go work for the university until I found something with my good friend Dave Cowan. And one day this guy from the National Science foundation comes through, and George Demko, he also happens to have graduated undergraduate from the same undergrad as me, Westchester University up in Philadelphia. And he's going to now run the nsf, the geography port of nsf, which is to give out grants to professors. And we start showing all this computer mapping stuff. And he said, well, in less than a year, I'm going to take a job at the U.S. state Department. Will you come work for me? And I said, sure. Tell me when you're ready. Took six months to get a top secret clearance and all of that. There's an office of the geographer inside the U.S. state Department. And that was my first job, and I moved to D.C. got it. 00:15:31 - Scot Wingo Total noob question, but when did. So the GPS system's been around for quite a while, but I actually don't know when it kind of like, and it had a military only utilization for a long time. Did you have access to that data at this point in the 80s or that. That came later. 00:15:47 - Chris Heivly Access came later. I mean, you know, that stuff was pretty, pretty, pretty high tech. And you know, and the question is, what is the GPS going to be attached to so that you can track? Right. 00:16:00 - Scot Wingo So I was thinking maybe you could just download lazily collected data and do something with it. 00:16:05 - Chris Heivly Do something with it. You know, later on when I left government, it was certainly something we were tracking more heavily. And so maybe we'll put a pin in that when we get to the MapQuest stuff. 00:16:16 - Scot Wingo Yeah, okay. I just asked my friend, our research assistant, Perplexity, and they report that in 93, that's when it kind of went wide for non military use. Just as a, kind of a good marker in time for. Yeah, a guy who loves computer and maps is going to hit GPS at some point. 00:16:33 - Chris Heivly Yeah, exactly. So we call those P and DS personal navigation devices, the Garmins. Think about that. So that's 93. MapQuest comes out in 96. That's how small a window those devices had. I mean they're still around a little bit, but that's how quickly that. 00:16:49 - Scot Wingo Yeah, it's crazy. Okay, so you go to work for the government basically. And did that involve you moving to the D.C. area, do some international travel? You know, when you say State Department, I'm picturing you visiting embassies for some reason. 00:17:02 - Chris Heivly Yeah. So no, I didn't have to go anywhere because they all fed the information back to us. Scott, the coolest thing, I haven't told too many people this story. So the coolest thing was, and it's really a kind of a, a part of my career is finding opportunities to somehow, and it's very mutual, I say attach myself to someone, but to connect with someone so deeply that you kind of become this Batman and Robin kind of thing. And so at the U.S. state Department, in the Office of Intelligence and Research, which is like a little mini CIA analysis group, about 400 people sat the office of the geographer and we made maps for those reports. And some of those were daily reports went to the president, Secretary of State, et cetera. And some were more long term that they might be working on for weeks about some issue happening globally. And a guy named Richard Clark was a deputy Assistant Secretary. Now if you follow politics, especially back kind of in the Clinton Bush W and on, he was at nsa. He became a very public figure. But when he was a young buck, he and I bonded together. And did a lot of interesting things. And one of which was my job was to bring and kind of automate the map production system. It would take us two to three days to make a map by hand. Eight cartographers on staff. So when I came in we, I built a system, wrote most of the code, hired out some code from some friends at South Carolina and we built a system that we can now turn around a map in about four hours. Now what that meant was it used to be that our maps would only be in those long term reports which were not the sexy part of that business. The daily report was the sexy part. 00:18:51 - Scot Wingo So now because that ultimately feeds up to the President's briefing. Right on stuff. Yeah. 00:18:56 - Chris Heivly As you can imagine, anything that gets that kind of visibility gets more attention. 00:19:00 - Scot Wingo Don't mess up the map, don't. 00:19:01 - Chris Heivly And so yeah, or, or what Richard would do to Clark is what he's known at the time. He would say, he would turn to an analyst and say head ups. Talk to Hively. I want a map as part of your story. So that kind of changed the importance of our department. It was fun to be part. I'm all of you know, 27, 28 years old. And then Scott, the really interesting thing. Ask Perplexity when the first desktop publishing came out because I did make a trip to Boston with, to Clark and we went to visit it, visit it might have been like HP or some, whoever had like the first desktop publishing. And so we got that and I then went and automated that daily report. So instead of being typewritten off a Wang computer, you know, in dull text. 00:19:57 - Scot Wingo It looks a lot nice. 00:19:58 - Chris Heivly It looked like a newsletter as we know it today and spent a bunch of time with George Shultz was the Secretary of State. I mean it was pretty heady days for a 20 something year old. 00:20:06 - Scot Wingo Yeah, yeah. So this is saying Mac Publisher was the first on the, on the, on the Mac. And then later on, you know, it got to be all this pagemaker is probably what you used to imagine. Yeah, yeah. I kind of, in my mind I'm now fictionalizing you to be Jack Ryan. You know, so it's kind of like this little analyst in a basement. 00:20:23 - Chris Heivly In my mind's eye, I'm sure was, yeah. 00:20:26 - Scot Wingo See something and then like did you ever see something that like became like super actionable or like. I know you may not be able to tell specifics but like that's kind of, that's kind of like a, you know, could be kind of an exciting thing. 00:20:36 - Chris Heivly Yeah, I mean I, you know, twice I remember getting a call in the middle of the night, and all they would say is, you need to come in. And so the sexier of those was when Chernobyl blew up. And I was sitting in a briefing room at the State Department with all the big shots, and what they asked me to do, they had analysts who were trying to guess the wind direction and the strength of the wind, and they were sketching out maps. And I. I actually went on the computer and made a map myself, which I actually was not a very good cartographer, but they needed something quickly, so I spent all night making maps of the area. And. And, you know, have you ever watched the HBO Chernobyl series? I mean, amazing, right? 00:21:21 - Scot Wingo Yeah. 00:21:22 - Chris Heivly Do you remember there's the guy that's standing on top of the. You know, kind of looking down into the reactor. I mean, we had pictures. You know, now it's not crazy, but the time, the fact that we had a satellite who could be focused on that and see pictures. So I used to see stuff like that. And it's not that those things were, like, crazy, it's just that you saw them way before anybody else would see them. 00:21:43 - Scot Wingo Yeah, yeah. The real time nature of them is very unusual. 00:21:46 - Chris Heivly Yes. Yeah. Like in the moment. And, you know, what they didn't want anybody to know is that they could take a satellite and turn it in the moment and get a picture. 00:21:53 - Scot Wingo Yeah. 00:21:54 - Chris Heivly That could see a guy's face. 00:21:55 - Scot Wingo Yeah. Wow. Cool. So then you obviously didn't stay in the government. What led to you leaving and what'd you do? 00:22:03 - Chris Heivly Well, two things. And, you know, there's a little bit of a career kind of nod here. Even though we were going from the last few years of Reagan's second term towards, you know, George Bush Sr. And even though it was Republican. Republican. The faces all changed to the people I was working with. Right. New secretary of state, even new deputy assistant secretaries like Richard Clark. So they were all moving. And now my access and ability to play at a bigger scale. And I just was sensing that that wasn't going to be a good thing or a fun thing. And at the same time, this group up in Lancaster, Pennsylvania, 50 cartographers had found me and said, hey, we have 50 cartographers making maps by hand. You built some systems. Would you come up and help us automate our map production system? You know, I'm originally from Philadelphia. My wife's from. At the time's from Philadelphia. It's kind of like a move back home and hang out with 50 and 50 more geeks. Yeah. Map geeks. 00:23:06 - Scot Wingo Cartographers. Yeah. Talk about maps. 24 7. 00:23:09 - Chris Heivly 24 7. It's true. 00:23:11 - Scot Wingo By the way, how do you organize 50 cartographers? Like, get a segment of the world or like. 00:23:16 - Chris Heivly Yeah. 00:23:17 - Scot Wingo Or like different types of maps? 00:23:18 - Chris Heivly Well, what you do is you find the two or three people who are really curious who, you know, want to figure this out with you. Yeah, and that's kind of been my mode all the time. I'm a crawl, walk, run kind of entrepreneur, if you will. So, yeah, just find a couple people. We went all Mac. I've always used a lot of kind of commercial software to then turn that into map stuff. So like Illustrator, if you remember that. So we would, you know, figure out the systems that would push into Illustrator and then use Illustrator to finish the map. Yeah, so we were doing a bunch of stuff like that. 00:23:51 - Scot Wingo So, so what. What's the name of the company? And then what were they, like, printing these or like, what were they up to? 00:23:57 - Chris Heivly So they were a map services company, so we made maps for other publishers. So National Geographic, the Park Service, every textbook, you know, that has a little history map in there. A lot of telephone books. Do you remember telephone books? 00:24:11 - Scot Wingo Yeah. 00:24:12 - Chris Heivly So that's what Donnelly Cartographic Services was what was called Lancaster. 00:24:18 - Scot Wingo So were you, I guess they were manually doing it. You were going to help them kind of like automate it. So you're like the computer guy. Yeah, I got it. 00:24:23 - Chris Heivly We're just trying to create more efficiency, speed, that kind of thing. 00:24:27 - Scot Wingo Yeah. What are. What are some of the things you built in that, you know, so you. You used some commercial stuff so that you weren't reinventing the wheel. 00:24:35 - Chris Heivly Right. 00:24:35 - Scot Wingo Was there, like, at that point we were thinking about workflows. Like, here's how the requests are going to come in. We're going to give it a ticket. Or were you more just like really focused on the map? 00:24:42 - Chris Heivly Yeah, I'm definitely a technologist, not a operator per se. And, you know, there was a whole staff of people that kind of had the workflows down, and I was just trying to make it. But I would say, like, within that first year, a couple opportunities started to kind of knock on the door. And this is when I started kind of shifting from an applied technology guy to more of a business or business development person. Because one of the things someone came up with is like, hey, I can. I built a little routing engine to go from city to city in the United States. You want to go from Philadelphia, Orlando. I'll give you the directions there. And we thought that Was pretty cool. 00:25:25 - Scot Wingo There's one external that kind of reached out to you. 00:25:27 - Chris Heivly An external. 00:25:28 - Scot Wingo Because if you build a routing engine, the one thing you're going to need is maps. 00:25:32 - Chris Heivly Maps, right. And they had. And in fact they really. It's not really a map, it's a database of roads which is not necessarily a map. Right. And so they're like, yeah, we got this technology, we're not sure what to do with it. And so we developed a system that used our canned maps, put the routes over top of it, put the highlighted route and we went and sold that to every auto club at the time. This is circa 8990. 00:25:59 - Scot Wingo Yep. Okay. 00:26:00 - Chris Heivly And at the time there was 14 auto clubs generating about 15 million routes a year. 00:26:06 - Scot Wingo Yes. This was like AAA. You would say, I'm going on a trip from here to there. And they would send you trip ticks. 00:26:11 - Chris Heivly Triptychs. Exactly. 00:26:11 - Scot Wingo These really interesting flippy map things. 00:26:13 - Chris Heivly 4 inch by 9 inch spiral bound. 00:26:15 - Scot Wingo Yeah. 00:26:16 - Chris Heivly Flip them over. 00:26:17 - Scot Wingo Yeah. 00:26:17 - Chris Heivly And you call those sausage links, by the way. 00:26:19 - Scot Wingo And they would come to you. Sometimes you would do it. I remember my grandfather would do it himself. Like he liked. He would get them but he didn't want them to draw on the map. 00:26:26 - Chris Heivly Yeah. Because usually it's some 17 year old kid in the AAA office who would then take a yellow highlighter. 00:26:31 - Scot Wingo Yeah. You know, and he would like order them. But he would say I don't. And then you like really get really mad if they did the route. Because he wanted to do the route because like that's how he's going to like. It's really a thing back then. Yeah, yeah. I had a very, very. Then you would save him. It became an, you know, an artifact of the trip. 00:26:43 - Chris Heivly Which is kind of nice. 00:26:44 - Scot Wingo Yeah. People would write on them and say. 00:26:45 - Chris Heivly Right, you could write. 00:26:46 - Scot Wingo Saw a big. The big ball of string over here and the, you know, babe, the blue ox was over here and things. 00:26:51 - Chris Heivly Yeah, yeah. The largest ear of corn. 00:26:53 - Scot Wingo Yeah. 00:26:54 - Chris Heivly So that's the impetus for MapQuest, by the way. 00:26:56 - Scot Wingo Yeah. 00:26:57 - Chris Heivly So we, you know, we did city to city routing. We layered that on a PC. We roll that into the operations center for any of these auto clubs printed on this. Very expensive. I think it was about $40,000. No, sorry, it's about $10,000 to do 40 pages per minute, black on white paper printing and so on a laser printer. Right. So that was. And then these little customized trip plans and they were a little more customized than the one than the triptychs because we also hacked together a bunch of Points of interest. And then we could say, hey, within five miles of your route is the ball of twine. 00:27:38 - Scot Wingo Yeah. Since you may have gone by the ball of twine a couple times. So then how did that turn into MapQuest? And we'll explain to people what MapQuest is. But this is one of the biggest online brands of the era. 00:27:54 - Chris Heivly And one of the first. Yeah, one of the first, frankly. So we're sitting in Lancaster, Pennsylvania. I do this deal and kind of product, you know, become. I'm more like a product guy at the time I put this product together. I'm working with a buddy who's kind of the sales guy. We sell this to every place. I think we're generating about 4 million a year in licensing fees. 00:28:14 - Scot Wingo We probably so kind of within the Donnelly world you've got this new product and you're kind of like the little, you're an entrepreneur so you've created this little startup within Donnelly. 00:28:21 - Chris Heivly Exactly. And you know, we still have this big map services group doing their thing. But you know, I'm curious and I'm never done and there's always something right, you know, the, the bug. So. But what's interesting. So Donnelly's all, you know, we were part of a $6 billion printing company, the largest printer in the world, and we have access to lots of people and things. And so, you know, my boss's boss, if you will. It's like, you guys should head out to California and you should just go see what's going on. So I just, you know, for months and months I go meet with Apple and I go meet with, you know, Broderbund, if you remember the big CD ROM publisher, Sony, who was a very active technology player at the time. And we just start meeting with these people and you know, so, you know, now it's 90, 91, ish, 92 and 93. Our desktop PC now comes with a CD ROM and now I can put that whole routing thing that was sitting on a pre formed PC in an auto club. Now I can put it on a CD ROM and you can do it at home. 00:29:33 - Scot Wingo Yep. 00:29:33 - Chris Heivly And that was a huge deal. And we sold that and made a ton of money on that. And we actually. Still at Donnelly, still at Donnelly, still. It, we had, we had that, that entrepreneurial little nub we now had named Geosystems Sexy. 00:29:51 - Scot Wingo Sexy. 00:29:52 - Chris Heivly You know, thank you. Good branding, good branding. And, and we're also building map software for, you know, brand new car phones. So you know, if you remember, you could, you know, your car phone was locked, you know, screwed into your, you know, your dash or something and you pick up the phone and an operator, like you had like a brick. Yes, exactly. And that operator, you could say, where's the nearest Italian restaurant? Well, that would use our system. So we were doing that and I was kind of starting to focus really on the consumer stuff. So we came up with the trip planner, the CD ROM and then, you know, that was 93ish. And we did that for a while. And we also did. I was going to bring in my Apple Newton. 00:30:36 - Scot Wingo Ooh. 00:30:37 - Chris Heivly So we actually had. 00:30:38 - Scot Wingo I had, I was one of the few people that had the Newton. 00:30:40 - Chris Heivly Yeah. 00:30:40 - Scot Wingo I love the animation. When you throw something away, the paper would like ball up and then kind of go into the little garbage. 00:30:45 - Chris Heivly As you know, it had a lot more trick than, than actual value. 00:30:49 - Scot Wingo Lots of sizzle, not a lot of stick. 00:30:51 - Chris Heivly We had the top selling products on the Apple, which made us the Newton, which made us a very big fish on a small pond. 00:30:59 - Scot Wingo Maybe I had one. Who knows? 00:31:00 - Chris Heivly Yeah, yeah. That involves some international stuff and a lot of business development and product development. So we did that for a while. And then the next thing came, this thing we started. By the way, the first time I saw the Internet was at South Carolina. Went down to visit my friends and they were doing some research. But yeah. 96, February 96, we launched MapQuest. So along the way we had been able to acquire the databases that allowed us to go address to address, which we all take for granted today. Remember, the previous products were city to city. 00:31:34 - Scot Wingo Yeah. So the idea of MapQuest was now you're going to have an Internet, CD Rom's gone, it's on a server. And now people at home without a CD ROM can load up maps, look at them and do routes. And you can say, I want to go from point A to point B. It will figure that out for you. And then you can print it out and take it along, which is very handy. 00:31:54 - Chris Heivly Yeah. The funny thing is if you think about, we build a digital product and that should save lots of paper, but we probably killed more trees of the people printing those directions than anything else. But I will, I will, I will timestamp this. This is nine years before Google Maps comes out. Nine years. So that's how early we were. And you know, we were a big, we were a big, big early Internet player. 00:32:18 - Scot Wingo Yeah, yeah. And then, you know, Garmin and those types of things aren't really in consumer use at this point. Maybe there's like some 10,000 version dollar version of a Garmin or like you Know, something like that. But there was. This was the only way to really figure out where you were going. 00:32:36 - Chris Heivly Yeah. So. 00:32:36 - Scot Wingo And avoid the old physical map flipping through the thing and folding it. 00:32:40 - Chris Heivly Right. And also kind of real time, I need to know where I am. Yeah, you can have a map, but if you don't know where to place yourself, then you don't know where you're going. Relative to that. That sounds silly. But you know, the interesting thing that you may or may not know is that, you know, we didn't have to build the databases for all the streets and all of that stuff. Those databases, which two providers both spent upwards of about a billion each were getting ready for the. In car navigation which was always a rolling five to six years away for you know, first starting hearing about it in the 80s. You know, here we are in the 90s. So when we showed up one day and said. Knocked on their door and said hey, you know this database you're building, what if we just license it? We'll give you a little bit of money and they're like free money. We don't have to do anything. No, just once a quarter send us the database. So we were able to get in that business actually relatively cheaply. We had to figure out the Internet software. Right. And this is before any of the platforms that we're aware of today about how you write code. Everything was C and figuring things out and building interfaces for the first time. But yeah, but we didn't have to worry about the database which was the biggest nut and we paid nothing for it until they finally caught on. 00:33:55 - Scot Wingo Yeah, yeah. You Trojan horse their database and back to the money. And then I remember the. The clever thing about MapQuest is you would print it out and there would be ads on there and there'd be like, you know, places to stop and you could tell they were sponsoring. It was. How did you guys. Were you involved in the creation of the. The, you know, how did you decide to start a company? What did it look like? Who were the co founders and then how'd you get to the monetization? Tell us like your. The OG founding story. 00:34:19 - Chris Heivly Yeah. So we're sitting there kind of 95ish, right. We're pretty hot. Things are going pretty interesting. And that boss's boss and the big printing company says, you know, we're starting to hamper these guys, we need to let them fly and we need to spin this out of Donnelly. So we went and raised some money from venture capital. A group in Boston and a group in the Valley and We spun it out, still called Geosystems. And then later we raise another round of funding. By then, by the second round of funding, I'm sitting on the board and don't have an operating role anymore. 00:34:54 - Scot Wingo Okay. 00:34:55 - Chris Heivly Yeah. And now we're just starting to fly, and then the MapQuest stuff comes out and, you know, it's just going faster and faster. 00:35:01 - Scot Wingo Did you get operational for MapQuest or were you at the board level at that point? 00:35:05 - Chris Heivly Level for really the rollout. I mean, I was involved, obviously, in the product development piece of that because that's, you know, the extension of PCs, CD ROMs, Newtons. 00:35:17 - Scot Wingo Right. 00:35:17 - Chris Heivly You think about it, our technology is getting smaller, smaller, tighter. Tighter. Right. For every one of these platforms. Yeah. And then in 99, took MapQuest public. I left the board. They needed adults. I was, you know, 35 years old, something like that. 00:35:36 - Scot Wingo Did you get to go to the. Where'd you guys go public? 00:35:39 - Chris Heivly Nasdaq? I did not. By then, I was. They. I. I was asked to leave the board and an adult come on pre public. So I didn't get to enjoy that piece of it. 00:35:51 - Scot Wingo Did you still have founder shares? 00:35:53 - Chris Heivly Yeah. I mean, remember, founder shares are relative. That this was a spin out of a. Yeah. Of a large company. So it's not your typical. It's more of an entrepreneurial journey than an entrepreneurial journey. 00:36:03 - Scot Wingo Yeah. Did Donnelly, like, continue to invest in it and do well from it, or were they just kind of like, it's not ours, we want to shed it. 00:36:09 - Chris Heivly Or like, it's a whole nother podcast, which is really interesting. I had left MapQuest Geosystems, MapQuest and joined Donnelly. They said, you did such a good job. What if we gave you $25 million and have you invest? 00:36:25 - Scot Wingo Nice. 00:36:25 - Chris Heivly So I became a VC in kind of 9789. 00:36:29 - Scot Wingo Yeah. 00:36:29 - Chris Heivly Sat on the board of. Because I still held a sizable portion of the company, represented them, and then learned how to become a venture capitalist and spend my whole Life out on 101. 00:36:41 - Scot Wingo Cut your teeth on the corporate VC, which is nice. You don't have to go fundraise. 00:36:45 - Chris Heivly Yeah, I have to fundraise. 00:36:46 - Scot Wingo You got a big balance sheet to invest off of. It's a lot easier than having to do both sides. 00:36:50 - Chris Heivly Exactly. And by the way, had this. You know, if you can remember back to that time period, Remember the phrase content is king? Well, if you think about it, Donnelly at the time is touching every single piece of content. They're a book publisher, magazine publisher, catalog publisher, financial publisher. So I could make investments in companies that were disrupting how content gets distributed. Right. Internet and such. So, you know, I was able to bring my portfolio companies into deals that they would never have been able to get into. So it's a really fun, fun job for a couple years. 00:37:23 - Scot Wingo Yeah. That was called 77 capital. 00:37:25 - Chris Heivly Yeah, exactly. 00:37:26 - Scot Wingo What was the, what's. Is 77 a reference to a highway or to some dog? 00:37:30 - Chris Heivly It's our address in Chicago. 00:37:32 - Scot Wingo Okay, got it. Yeah, I figured there was like some connective tissue into the corporate mothership. What, what, what was VC like back then? And what, what do you remember as like, did you have. There's always like the got away list and then what was your biggest success investor wise as a corporate VC during that little Donnelly window there? 00:37:49 - Chris Heivly You know, we had a. Probably about a 40% return. So we did really, really well. Be honest, I think anybody with half a brain could have done well in that time period. 00:37:59 - Scot Wingo Yeah. Because it's an Internet bubble. 00:38:00 - Chris Heivly So it was Internet bubble. And we got it. We could get into just about any deal we wanted to. What? I remember seeing the stat that, you know, from like, I don't know what the starting point, but let's just say from like 95 to 99, the number of VCs tripled. 00:38:14 - Scot Wingo Yeah. 00:38:15 - Chris Heivly They went from about a thousand to 3,000 BCS or something like that. I don't remember if those numbers are correct, but the relatively. And what I was sitting on all these boards of all these portfolio companies and what I started to see is that VCs were sitting on boards who had never operated or had an operating role in their life. And, you know, I'm young and persnickety and, you know, got my, you know, young attitude on. That started to drive me crazy. Right. You sit in a board meeting and some VC would start giving operating advice and had never hired, fired or, you know, made a hard decision in their life. Right. And they were coming from Bain and you know, all these consulting groups, bcg. And so by the time, you know, after a few years of that, I said, you know, I want to, I want to actually go back to being an operator. 00:39:05 - Scot Wingo Yeah. And knowing you now, you're pretty outspoken and not one to hold back. So I imagine, imagine people, people tend to get more like, easy as they get older. And so I imagine you were like a, you know, you were some. 00:39:18 - Chris Heivly I was a pain in the ass in the boardroom. 00:39:19 - Scot Wingo Yes. 00:39:20 - Chris Heivly Yes. 00:39:20 - Scot Wingo And the VCs like that don't like feedback. No, they're not looking for feedback from some guy that's younger than them. That's like from some quote unquote, dumb map company or something. 00:39:29 - Chris Heivly I remember this one vc, he had this habit. And we've all probably seen one of these people where you'd have this 20 minute discussion on something and discussions end and the guy running the meeting, the CEO, is ready to move on and this person has to come in and then just summarize everything. And I would just crawl out of my skin. 00:39:51 - Scot Wingo Man, that have been fun to be some of those. 00:39:53 - Chris Heivly Yeah. 00:39:54 - Scot Wingo Okay, so you're doing that and then what'd you do next? How did you. Did you go back and found another company? Did you decide you love this VC world? 00:40:03 - Chris Heivly I didn't. Well, I didn't love the VC world. I loved the greater thing that we do. But I made one mistake. I went to actually work for Accenture for nine months. 00:40:18 - Scot Wingo At 40, you're like, I hate these Bane and consulting guys. I'll go work for one. 00:40:22 - Chris Heivly Right? Yeah. 00:40:23 - Scot Wingo What were you thinking? 00:40:24 - Chris Heivly Well, what I was thinking is I was getting ready to. I had an idea to do a roll up of map companies and I'm working on that. And someone I knew was the recruiter for Accenture and they said, we want someone to take over their entire Internet business. And I'm like, yeah, yeah, it sounds sexy. And. And they just kept throwing more money and more money and more money and finally they wore me down. What I realized within two months was it was a corporation and I don't do well. There's. 00:40:56 - Scot Wingo And they, in the interview process, they say, you're going to be this. 00:40:58 - Chris Heivly Yeah. 00:40:59 - Scot Wingo Have all this responsibility. 00:41:00 - Chris Heivly You're basically, you can do whatever you want, all the money you want, you. 00:41:03 - Scot Wingo Get inside of it, and then you get inside of it ever that way. 00:41:06 - Chris Heivly So that was a short stand. And just interesting to understand that, you know, our career is a, an arc. Right. And has lots of interesting places. 00:41:15 - Scot Wingo And, and at this point in time. 00:41:16 - Chris Heivly You'Re in Chicago, I'm in Chicago. Right. And. And you know, just a few months into that, Good old Ray McNally starts knocking at the door. And I had spoken that I'm a few years before about a potential role and it didn't work out. And they came back again. For those who don't know Ray McNally, they're the largest at the time, map publisher, about $185 million business. A thousand employees, you know, own their own printing presses, you know, road atlases, street maps. I think we had 4,000 map products of different kinds. I mean, this 140-year-old business had the. 00:41:48 - Scot Wingo Internet started Disrupting them. 00:41:49 - Chris Heivly I imagine it was because this is now, you know, kind of 99, 2000. MapQuest comes out in 96. Ray McNally still doesn't have a map website. And so I'm like, okay, that's. Here's another entrepreneurial opportunity. But in a map company. And, you know, if you think about, I'm a geographer, cartographer, I've now I'm going to be doing Ram McNally, and I've already done MapQuest, like, what gets bigger than that? Right. And I've also done it in the government. 00:42:18 - Scot Wingo Yeah, yeah. Probably one of your first maps that you ever saw was Iran McNally completely. And it's probably a brand that's just been like embossed in your brain. 00:42:26 - Chris Heivly And, you know, I do as, you know, kind of, I do keynotes and speeches all over the world and usually I look out in the audience and I'm like, how many people have never heard of Ray McNally? And if you're under 30, your hand goes up, maybe even 35 these days. And I said, well, next time you're at home, get in your dad's car, in the back seat, you know, there'll be a, you know, in his driver's seat, there'll be a pouch. Reach your hand in there and I bet you a dollar you're going to find a Rand McNally product or Rhodales or a street map. 00:42:52 - Scot Wingo Yeah, cool. So you're a CEO of that. And it's a bit of a. It's almost feels like it's kind of a turnaround, I would imagine, because maybe they were. Okay, maybe they were like going sideways, but the Internet was starting. Like newspapers were in a nosedive at this point in time and, you know, phone books were just going away, so. So they bought you in to. Feels like it was probably a little bit of a turnaround, kind of. 00:43:13 - Chris Heivly Definitely, definitely turn around, restart, whatever, you know, rescue us. 00:43:16 - Scot Wingo Yeah. 00:43:18 - Chris Heivly And we got pretty far. We, we, we. You know, if you remember at the time, we created a wholly owned subsidiary called ramgnalley.com we funded it with $10 million of outside funding. You know, if you remember, you know, Borders and all of these, you know, Walmarts even, they were creating these wholly owned subs, taking them public and then swallowing the old business back. So you can get different multiples. Right. So we had all these dreams and, and, you know, we were building a new business. You know, I think I hired 60 people in three months. 00:43:49 - Scot Wingo Were they private or public? 00:43:51 - Chris Heivly Private. And a PE group had bought them out A few years before. 00:43:54 - Scot Wingo Okay, so I gave you some. When you're public, you don't have a lot of degrees of. You can't go to the serials and say, yeah, we're going to. Yeah, yeah. 00:44:01 - Chris Heivly The good news, the reason I had turned it down years before, it was still family held even from 120 some years on. 30 years. 00:44:08 - Scot Wingo Like the descendants of imagination. 00:44:09 - Chris Heivly Yeah. The McNally family. 00:44:10 - Scot Wingo Yeah. 00:44:11 - Chris Heivly Yeah. Sandy McNally was a good guy and good friend. 90 heirs all picking out their pennies of dividends, but a PE group came in and bought them and, and unfortunately, Scott, it was, it was too little, too late. Like, you know, four or five years of. And we were building different product, but they still had this. It was almost like Clayton Christensen's. You know, we weren't really. I was limited to how much I could disrupt the old business. 00:44:41 - Scot Wingo Yeah, yeah. It's hard to burn that to the ground. You need the cash flow to do what you want to do. 00:44:46 - Chris Heivly Quick, interesting story that you appreciate. So 2001, we decide they, you know, the P Group decides to sell the company. And so I, by this time, you know, half of the executives have left. I'm the only one who understands the map business. Brought in the fourth CEO since I had been there in four years to just sell the companies. And McGraw Hill former executive, he's going to be the face would know a map if it hit him in the head. And I'm sitting with Deutsche bank and I'm writing the book, right. For months. And they're starting to get the group together. And so we actually rented a place out in the o' Hare airport just to outfit it with all our products. We didn't have to bring the potential acquirers through the office. So we had this little thing set up and if you know the process, you hope to get two or three interested parties, they're going to write a letter of intent. And we had six lined up letters of intent that were due in the deutsche bank on September 12, 2001. 00:45:55 - Scot Wingo Oops. 00:45:55 - Chris Heivly Oops. 00:45:56 - Scot Wingo Yep. Bad timing. 00:45:57 - Chris Heivly Yeah. 00:45:58 - Scot Wingo Yeah. Even it had been September 10, it would have been. 00:46:00 - Chris Heivly Still would have. 00:46:01 - Scot Wingo You're too, too, too close to the zone of impact, all that thing. Yeah, yeah. So, you know, our generation, we've gone through kind of the Internet bubble burst and then 911 was, you know, in hi. These things in hindsight aren't as disruptive, but when it happens, you know, you don't, you know it's happening, but you don't know how bad it, you know, in your mind, you're like, well, this tone of uncertainty is, like, very far down. 00:46:25 - Chris Heivly Yeah. 00:46:25 - Scot Wingo You know, like, maybe people won't travel for years or. 00:46:29 - Chris Heivly You don't know. 00:46:29 - Scot Wingo Does all this. I mean. Yeah. 00:46:30 - Chris Heivly Right. 00:46:30 - Scot Wingo I mean, going to war, like, what's. Yeah. 00:46:32 - Chris Heivly Yeah. What's happening next? And obviously any kind of M and A. And, you know, the company was losing money. And so what's going to happen? And so. 00:46:40 - Scot Wingo So a deal didn't get done. 00:46:42 - Chris Heivly I'm going to imagine deal didn't get done. The face is sitting there. And so I remember going to see him, and he said, well, you know, can I turn you into our cto? We're gonna. We're gonna have to close down all these new. All these businesses. 00:46:54 - Scot Wingo Yeah. 00:46:54 - Chris Heivly I'm like, you know, that's not my. Not my thing. And so good luck. 00:46:59 - Scot Wingo Yep. 00:47:00 - Chris Heivly I'm just gonna go figure something else out, which I'm not afraid to do, so. 00:47:04 - Scot Wingo But. Yeah. Okay. 00:47:05 - Chris Heivly Yeah. 00:47:06 - Scot Wingo So you gave that the. The old college try. Didn't work out. Had a couple headwinds there that were insurmountable, but a lot of fun. 00:47:13 - Chris Heivly No regrets. 00:47:14 - Scot Wingo Yeah, no regrets. 00:47:16 - Chris Heivly No regrets. 00:47:18 - Scot Wingo So then what you did a couple other little things in there, and then you're going to get to the Triangle, which is the really exciting part, but, like, give us the breadcrumbs that led you here. 00:47:26 - Chris Heivly Yeah. So, you know, love Chicago. It's probably my favorite city and big city in the US I'll take it over in New York, Boston, LA. Any day. Even San Francisco. I take it over. Philadelphia, a lot friendlier. 00:47:39 - Scot Wingo Yeah. 00:47:40 - Chris Heivly Midwest people. 00:47:41 - Scot Wingo It's the city of brotherly love. 00:47:42 - Chris Heivly The real city of brotherly love. 00:47:44 - Scot Wingo Someone from the south that's been there. I'm like, their branding is. 00:47:47 - Chris Heivly Yeah. 00:47:48 - Scot Wingo Misleading. 00:47:48 - Chris Heivly It's a little. I can't argue with you there, my dear old Philly. So my wife Patty, you know, for a bunch of months, like, you know, I'm really tired of the cold. I'm really tired of the cold. And so I'm running a little company, a little software company and, you know, work virtual. And so we just decided to pick up and as we've done a couple times, and just where are we going to go? I made the spreadsheet, you know, looked a lot of places we've been and haven't been and came down to either Chapel Hill or Boulder. 00:48:23 - Scot Wingo Okay. 00:48:23 - Chris Heivly And we selected Chapel Hill. 00:48:25 - Scot Wingo I thought a map would have been involved in this decision. 00:48:28 - Chris Heivly Like, for sure, the map's always in the head. 00:48:30 - Scot Wingo Right. 00:48:31 - Chris Heivly Cool. 00:48:32 - Scot Wingo So how did we win? 00:48:34 - Chris Heivly My parents and Aging parents are in Philadelphia. Her aging parents are in Rochester, New York. And we just said, you know, all things considered, if we have to jump in a car and do something, that's a lot easier from North Carolina than it is from Colorado. Cool. 00:48:49 - Scot Wingo Awesome. So you were just kind of, you know, had your own, like, consulting thing and moved down or. 00:48:54 - Chris Heivly Yeah, I mean, it was a little. Little six, seven person software company. Okay. We were writing software for school districts to handle their IEPs, Individual Education Plans. These are for kids that have special needs. They have, you know, the teachers will have to build a plan. So it was a little automated for me, workflow kind of thing. 00:49:12 - Scot Wingo Cool, awesome. And then you moved down here and you chose Chapel Hill. 00:49:16 - Chris Heivly Yeah. 00:49:17 - Scot Wingo And you've been here ever since. 00:49:18 - Chris Heivly I've been here, yeah. We're coming up. It'll be 20 years in July of 2025. 00:49:22 - Scot Wingo Yeah. Okay, so then that's going to be 2015. 22,005. Yep, sorry, 2005 and then. 00:49:30 - Chris Heivly Yeah. So that. Let me feed you. 00:49:32 - Scot Wingo What was the. Well, so you land here kind of guy out of Chicago. What was the ecosystem like as an outsider? So who do you remember meeting? 00:49:41 - Chris Heivly I will tell you. I will tell. I shouldn't laugh like this. I laugh because he's such a good. He's a mutual friend. I did go to a little, kind of little private VC meeting and it was really silly. And I think, with all respect, I think it was like run by ced, but I don't know. And it was outsiders and I had an affiliation with a VC group. And I was kind of an EIR at the time, kind of always on EIR for this VC group out in the Valley. But sitting next to me was Jason Kaplan. And so he's like. Like, you want to get out of here? I'm like, yeah. So, you know, it doesn't sound like Jason. Right. So we went out and talked. There's an important lesson here, is that Jason and I didn't do anything after that time I did spend. I did get parachuted in as a CEO of a company called Ultimus. I don't know if that they were. I remember that Rashid Khan. Yeah, I think that wasn't like. 00:50:36 - Scot Wingo I remember vaguely. What did they. Was that like. Was it something an insurance. 00:50:40 - Chris Heivly It was a business process management. So they tool to automate workflows. They were doing about 22 million in sales, losing about 7 million a year. And the interesting thing, Scott, is they ended up bringing in a guy. We're recruiting him to be CEO who was one of the three, was the third CEO at Ram McNally with me. And so he was coming into town, he said, hey, let's have dinner. The little company I was doing, the IEP was a workflow. And so we got talking and he said, what are you doing? I'm like, well, I just sold out of that. I'm kind of a free agent. I don't know what I'm going to do next. I'm sitting in Chapel Hill. And he's like, well, I'm being recruited to do this company. It does this stuff. I said, well, make sure you find out. Here's his five questions you need to ask him. He says, well, if I take the job, what are you doing? I'm like, I don't know. Sounds like we're going to do this together. So we ended up doing. Trying to rebuild that thing. And that lasted just a couple of years. 00:51:35 - Scot Wingo Does that have local funding? Were you bought in by a vc? 00:51:38 - Chris Heivly No, they were. They were out of Boston. A big. I can't remember the name of that, but pretty big VC group. Okay. We got the. Within a year, we had reduced sales to 19 million, but we had only lost a million and we were well on our way. And then 2007 and 8 hit and we're $150,000 license software and then services on top of it. 00:52:00 - Scot Wingo So, yep, that's gets tossed out pretty. So churn up sales gone. 00:52:05 - Chris Heivly Yeah, yeah, so. So that was fine. So the cool thing is, so it's 2009ish. I exit out of that and you might be seeing a trend about every three to five years. Either I get bored or they get bored with me. But I start reading about Y Combinator and techstars. And I said, and I mean, my wife can attest to this. I'd had a dream for 10 years that at some point I'm just going to go buy a building. I'm going to wire it, right. I'm going to load some servers in there. This is how dated the dream was. And killer maps on the wall. I'm going to put some killer maps in the wall. I'm going to bring these kids in and, you know, we're just going to help them build their companies. And, you know, I'll bring in my buddy who's a developer. My buddy's a marketer, you know, a salesperson, and we're just going to kind of help. And this idea has been done. It's now almost the studio they kind of play, they call it these days. But I started reading About y commoner and tech stars. I'm like, this is it. This is the new version of that. And so I called up Kaplan and I said, do you know anything about this stuff? Remember we met about three years ago and we went, had lunch or breakfast or coffee with Joan Seifert, Rose of CED and Jason. And I said, here's what I'm thinking about doing. I want to put an accelerator here and play. And that was circa September 29th was my first meeting in 2009. 00:53:33 - Scot Wingo And that was called. 00:53:35 - Chris Heivly I called it the Triangle Startup Factory. It had a couple different names along the way, but that's when I would have met you. Because what I had learned in a previous. Some previous friends is what networking, the importance of it and how to do it. So From October of 2009 through 2010, five months, I probably sat down with 275 people. And I'm sure you were one of them. 00:54:04 - Scot Wingo Yeah. 00:54:05 - Chris Heivly Everyone who moved who could pretend to spell the word entrepreneur. 00:54:09 - Scot Wingo Yeah. My memory is it kind of quickly got abbreviated to startup Factory. 00:54:13 - Chris Heivly Yeah. 00:54:13 - Scot Wingo And then you guys were like the OG in American Underground. So, you know, the. 00:54:17 - Chris Heivly We were the first tenant in American Underground. 00:54:19 - Scot Wingo Yeah. So they. It was a good pitch. Everyone's like, you know, the Goodman family's like, we're going to renovate this thing. It's going to be awesome. And we have this whole area for entrepreneurship. And they left out this little piece. It's in the dank, dark basement. So you go over there, you're like, oh, this is amazing. Where's the startup thing? Like, oh, it's down there. You go down there and you're like, wow, suddenly start sneezing. You're like, maybe some mold going down here. Then you follow a trail of mushrooms. And it led to Chris and Chris's office. 00:54:44 - Chris Heivly Yeah. Pay no attention to the mold or the smell. Yeah. It's probably the biggest sales job I ever did is convincing people to come join me down there. But as you know, in kind of community and what we do, like, when you get surrounded by the people who think like you, you don't need windows. You know, the windows become secondary. I spent five years down there. 00:55:02 - Scot Wingo Yeah. 00:55:03 - Chris Heivly So, you know, when I think about it, Scott, like, doing that was really the kind of the next thing for me. Like, instead of doing one startup by myself, now I'm beginning involved with ten Right. In my cohort. But I'm also getting involved with everything else in the community that moves. And it felt like I had really landed in my sweet spot. 00:55:27 - Scot Wingo Yeah. So Then. So you want to do this. And I imagine you had to go, you know, the. You had to go raise some money. So you had to go kind of almost like an LP structure kind of a thing. It's almost like you got a little fund you have to raise to completely run the cohort. Do. Did you do it, like, every year was a different one, or you had enough money to do multi years. 00:55:45 - Chris Heivly So there's two different kind of time periods in that. So the first one, I started calling it Triangle Startup Factory, but then there was an accelerator in D.C. called LaunchBox Digital. I don't know if you remember that. And they had kind of. All their members had gone to work for Obama, and so they were kind of sitting there, and so they had some investors down here in Chapel Hill, so they kind of drug that down. We'll just do the short version. But they raised the money and then asked if I would run it for them. 00:56:14 - Scot Wingo Yep. 00:56:15 - Chris Heivly And so I did that for one cohort. It was. It landed well. That was 2000 follow 2010. Everyone said, great. And they're like, what's next? And I'm like, well, I really don't need you guys, so we're gonna. I'm gonna go out on my own, and I'm gonna do this the way I want to do it. I don't want to be an employee. I'm not a really good employee. Right. And so it took me a year, but then I hooked up with Dave Neal, and he And I went and raised $7 million to run the startup factory for four years. Eight cohorts. 00:56:49 - Scot Wingo Okay. That was nice. So then you got. Got the fundraising out. You didn't have to every year go. 00:56:52 - Chris Heivly Exactly. And that was one of the things that. Why it took me a little longer. What I didn't want the approach that the previous group was on is I don't want to. This. I don't want to be raising money all the time. It's like a Nonprofit, right? 00:57:04 - Scot Wingo Yeah. 00:57:04 - Chris Heivly 50% of your time is spent raising money. I wanted to actually do stuff. 00:57:07 - Scot Wingo Yeah. 00:57:08 - Chris Heivly And run it like a business. 00:57:09 - Scot Wingo Yeah. So there's one cohort that was kind of like the Lunchbox. Launchbox. 00:57:13 - Chris Heivly Yeah. 00:57:14 - Scot Wingo Yeah. And then your. Your other cohorts. So. So if you're at this five years, you've got. And you're doing 10. So there's 40 companies and another 10. So, like, 50 companies went through. 00:57:23 - Chris Heivly We did 42 combined. 00:57:25 - Scot Wingo Yeah. 00:57:25 - Chris Heivly We didn't always reach our 10. 00:57:27 - Scot Wingo Yeah. 00:57:27 - Chris Heivly So let's. 00:57:28 - Scot Wingo Let's kind of talk about that. In aggregate, what. What are some of your standout companies? You worked with any of them? What was the biggest success? Any near misses in there that you're kind of. 00:57:40 - Chris Heivly I think. Well, Anil Chawla was in our first cohort. 00:57:43 - Scot Wingo Oh, yeah. 00:57:43 - Chris Heivly So archive Social. 00:57:44 - Scot Wingo That's a good one. 00:57:45 - Chris Heivly So that was a good one. That's pretty much paid off our, you know, from a fund point of view, we're break even now on the fund. 00:57:53 - Scot Wingo Yeah. So as a parallel company. Right. Because it returned the fund. Yeah, yeah. 00:57:56 - Chris Heivly That we call it. 00:57:57 - Scot Wingo Yeah. 00:57:58 - Chris Heivly You know, you learn a lot. You learn. You learn what? Different. How different entrepreneurs think. You learn that. We both know there's not one way to do this. Right. Some people crawl, walk, run. Some people are swing for the fences. Some are, you know, think differently. Some people love more input. Some people don't want any input. And so as you go forward, you start, you know, we talk about pattern recognition in funds. Right. You start to figure out patterns that work for you. You know, one of the things I would say at a meta level, you know, our first few cohorts are probably a lot were a lot better than the last few cohorts. Not because we didn't choose well, just because in the beginning we were able to scrape the best of the best because there was nothing that went before us. Yeah, right. So one of the things we did that was not common in other cities is that I felt pretty strongly about when Dave and I put our model together is to run twice a year. So from a community building point of view, we were kind of always on. 00:58:58 - Scot Wingo Right. 00:58:58 - Chris Heivly You're three months on, three months off, three months on again. And so we were able to kind of create, I think, a lot of energy and a lot of awareness around the program and help a lot of people out. 00:59:09 - Scot Wingo Yeah. The kids today would call it vibes. What was fun is. And you had a big co working facility too. So, like, you know, it was all very physical. So you'd walk by, you'd go in the basement, walk by, you know, swim through a river or whatever to get there. And, you know, you guys always had something cool going on in there. And it was kind of like, hey, I want to see what's going on in the entrepreneurial world. I'll stand by, see Hively and Dave and like, just kind of poke around or you would invite people over all the time to just kind of sit and have lunch and meet the cohort. And it was like, super, super accessible and very transparent, which was kind of neat. 00:59:39 - Chris Heivly Yeah, thanks. I mean, that was very intentional. Right. I call it sometimes the entrepreneurial zoo where people would walk by, look in the windows. 00:59:46 - Scot Wingo Well, fishbowl kind of thing. 00:59:47 - Chris Heivly Yeah, fishbowl entrepreneurs. Aren't they? Yeah, aren't they? Yeah. Yeah. So, you know, we, I think we still have. They would know this answer. You know, I'm not good with details, but probably six or eight companies still alive today, ten years later. David Shaner offline. One of my favorite. 01:00:05 - Scot Wingo Yeah, my first coffee meeting with him, I'm like, I'm like going to the Starbucks and I forgot to look him up. And like there's a guy with a whiteboard that's kind of weird. And I'm like looking around, I'm like, oh, that's my guy. He's like sitting there with a six foot whiteboard and he's like, I don't normally do coffee meetings because I like whiteboards. So I thought I'd bring it with me. And he's like, literally he's a tall guy, he's like sitting there like. 01:00:22 - Chris Heivly Yeah, he's 65 by the way, like. 01:00:24 - Scot Wingo Holding with one arm and he's like, you know, crazily. He's like sketching away, showing me his thing is hilarious. 01:00:28 - Chris Heivly But one of my favorite entrepreneurs of the cohort just, he's just so smart and he's curious and he asks questions and you know, he's done. I think he's done, you know, two pivots, you know, and I think he's got the model down. He's now in 10 survive Covid. 01:00:43 - Scot Wingo He's, you know. Yeah, it's tough. 01:00:45 - Chris Heivly So, you know, a lot of relationships, a lot of understanding, you know, I, you know, see previous comment about. I sometimes call it career adhd. But you know, not only do we do kind of between Launchbox and Startup Factory, you know, I do 42 companies, I do eight cohorts. But you know, do you remember the Big Top? Right. So you just start seeing ways that you could play a role in your community. I know this rings true with you, right? You, you, you've especially last few years, you know, between the fund and first, the list and the fund and you know, the, this podcast and other things, you start finding ways that you can add more value. That was a really, I mean that was a fun time to be. 01:01:28 - Scot Wingo Yeah, Big Top was a recruiting event. So you kind of got like a lot of candidates, you got a lot of people hiring and you just kind of had like a fun kind of party vibe of like, you know. 01:01:36 - Chris Heivly Yeah. Take all the bullshit out of the. 01:01:37 - Scot Wingo There's a little bit of presentation to. 01:01:39 - Chris Heivly It, but yeah, just enough. 01:01:41 - Scot Wingo Yeah, yeah, yeah. 01:01:42 - Chris Heivly I think I ran 15 of those over five years. 01:01:45 - Scot Wingo Yeah. 01:01:45 - Chris Heivly You know, before Gret beat, before exit event, I had Triangle tech talk. Do you remember that? 01:01:50 - Scot Wingo Yeah. 01:01:51 - Chris Heivly So that was crowdsourced news. You know, I was still meeting. You know, I, I used to be able to tell you this number, but I probably had. I've had 5,000 plus one on ones in the community. And you, you. You probably have pretty similar, you know. 01:02:08 - Scot Wingo Open office hours, because then I'm always like, I probably need to stop doing that. 01:02:12 - Chris Heivly Yes. Yeah. 01:02:13 - Scot Wingo That's like. You keep counting, like, what am I doing? 01:02:14 - Chris Heivly Stop count. 01:02:15 - Scot Wingo A lot of. 01:02:15 - Chris Heivly Yeah. 01:02:16 - Scot Wingo But then, you know, you know, it's just so much fun to meet and hang out with smart people and how. 01:02:20 - Chris Heivly Much do you learn? 01:02:21 - Scot Wingo I learned so much. 01:02:22 - Chris Heivly Yeah. They don't realize, you know, the number of times people go like, I can't believe you do this and you give your time. I'm like, well, here's the secret. I get as much out of it as you do. 01:02:30 - Scot Wingo Yeah. 01:02:31 - Chris Heivly And I get to know what's current. Yeah. So, you know, that's how those things, like a big top is. People going, I'm really trying to find something. I'd love to be able to get into teamworks or offline Media or something. I'm like, well, there's got to be an a way I can do this rather than just doing one introduction. 01:02:47 - Scot Wingo Yeah. So I spend most of my time kind of like post product market fit. And then in what you do, what you did is like before, you know, like that idea, that napkin diagram to first customers and revenue and stuff. When you set this up, did you, first of all, do you think of it as an incubator or an accelerator and help people? You know, what is the difference? I get, I get that question a lot and I want to hear your answer. 01:03:11 - Chris Heivly Yeah. Incubators aren't around anymore. It's what your father used to do or your grandfather. So that's me being silly. And. And so now let me turn it to completely snobby. I have a very rigid definition of an accelerator, and that's based on the original techstars Y combinator model, which is an accelerator is a fixed amount of time. It's a mentorship heavy program that also invests in your company. 01:03:34 - Scot Wingo Yep. 01:03:35 - Chris Heivly So love American Underground. It's not an accelerator. As an example. Right. 01:03:39 - Scot Wingo I think co working is not an accelerator. 01:03:41 - Chris Heivly Co working is not an accelerator. 01:03:42 - Scot Wingo It might be a place to go Work. 01:03:43 - Chris Heivly It's just a place. And by the way, they may have programming and speeches and which is, I mean, in seminars and webinars and that's fantastic. But it's not an accelerator in my snobby point of view. 01:03:55 - Scot Wingo Yeah. And then when you started the startup factory, did you kind of go and explore what YC and techstars had done and kind of take your personal favorite and kind of give it that hively flavor or complete start, clean slate and say, here's how I'm going to create the hively way? 01:04:10 - Chris Heivly No, that's. The hively way is actually to learn from others and then twist it into my comfort nature. At the time, Paul Graham was running Combinator Y Combinator. He wouldn't talk to anybody. I've tried a couple times. He's like, no, thanks. 01:04:23 - Scot Wingo So they kind of now have this open source mentality, but back then it was very much very closed. 01:04:28 - Chris Heivly I talked to the guy that ran launchbox, There's a guy in Austin, Texas that runs a capital factory. There's only three or four of these really at the time. And then I got in with David Cohen and Brad fell to techstars and they, Scott, they just went, here's the whole playbook. Yeah, here, here's the whole thing. You know, let us know how we can help and you know, ask them a ton of questions, then put the highly spin on it. 01:04:51 - Scot Wingo Yeah, okay. And then again, as a someone that has never gone through one, but I kind of peer in there and look, a lot of it is kind of giving people the discipline to, you know, and when I have a coffee meeting, I try not to do too many of these because I don't feel like I add any value with a, you know, someone that's like at napkin diagram, a lot of times they want me to tell them their idea is good or bad. Yeah, I kind of like refuse to play that role. I do too, because I've. I've tried it before and I'm bad at it. 01:05:17 - Chris Heivly And by the way, who, who's anybody to say an idea is good or bad? 01:05:20 - Scot Wingo Yeah, yeah, right. Except there are a lot of people that want to compete with Uber and I'm kind of like, I try to nudge them pretty hard away from that. But like, you know, if it's like, obviously like this is going to be, you know, this, you have set yourself up to do the hardest thing possible, then. Yeah, but so, you know, so then they're like, well, what do I do? And I don't know the answer. Right. Like so I'll say, go build something, find a customer, rinse and repeat, like, and a lot of it for tech founders especially, they need that structure to kind of, like, learn how to go do that. Yeah, yeah. So. So is that, like, what a lot of the content is, is like teaching them how to, you know, do that cycle of. Of getting the customer feedback and that kind of thing? 01:05:58 - Chris Heivly Yeah. So today, most of the advice I give and. And I'm definitely, you know, zero to product market fit. Like, that's my. You know, What I realized 10, 15 years ago is that's really my strength. That's my interest. That's why I can provide the most value, you know, as we get older. 01:06:12 - Scot Wingo A little bit country, I'm a little bit rock and roll or vice versa. Whichever one you want to be. 01:06:16 - Chris Heivly Yeah, I'll be whichever one you don't want to be. But, you know, what I typically do is I'll start depending on how much they understand our language and any. If they know nothing, I'll say go get the Lean Startup by Eric Reese and read that. And when you're done reading it, reading again, and then give me a call. I may turn them in to search the Business model Canvas or the Lean Canvas, another book Ash Mora wrote, Running Lean, which is more of a tactical application of Eric Ries's Lean Startup. Those are my two favorite kind of things. And by the way, I built a whole workshop that I've done 30 times for this, and I call it Idea to Launch. Right. So you can see where we're heading here. But for the most part, it comes down to some really simple things. And this is, I think, what my strength is to simplify things. I said, all right, you guys are you or you guys or you people, whatever. You folks are really heavy on product development, and I need you to do some customer development. And here's a couple things to think about, and these books will kind of tell you what that is, and if you're already familiar with that, then let me ask you some questions to find out that they're still not doing enough and, you know, get out and talk to people. Right. Steve Blank, you know, know the guy. Like, go talk to 50. Don't talk to me until you talk to 50 people. So a lot of that is just. I call it mindset. Like, re trying to reframe their mindset and get them pointed at a slightly different North Star than the trajectory they're doing, because almost everyone, including myself, are heavy on the product build part and not as heavy on the Customer part. And I don't think you can bring that in early enough to the mindset. 01:07:56 - Scot Wingo Yep. Okay. How, how do you know when someone is through? Like, an entrepreneur comes to you and says through product market fit? Like, how do you, how do you, Chris Hively, help the entrepreneur? Or like, what's your view of, like, when you're through that? 01:08:11 - Chris Heivly So tell me. Sure. 01:08:12 - Scot Wingo You have a very crisp definition. 01:08:13 - Chris Heivly Yeah, well, so I, you know me, always a little bit of humor. I, I say, I say this at the end, not at the beginning. Product market fit. My definition is when, if you had taken your product or service away from your customers, they would literally start crying. Right. And so implied in that is engagement. And so like, all right, how many customers or users do you have? And so, and obviously this is relative to enterprise versus consumer whatever, but it's usually probably a number that's way, way, way too low. Okay. Okay, great of that. How long have they been using the product? How often do they use the product? If you called them up, would they know who you were? Would they be happy that you called them up? These are all ways to show how deep that engagement is between your customer, user, whatever, and your product or service. And I'd say 95% of the time, you know, they're not even close to product market fit. And so they come in, and I'm sure you see this too. They come in wondering, how do I scale? And I'm like, you're not ready to scale yet. Like, you don't have enough engagement, you don't have enough users. And then it's into, like, retention and, you know, like, you know, David Shaner's favorite word, right? Like, you know, understanding that whole model of, of acquisition and retention and churn. And so don't scale until you got that. So I want to make sure they, I, I try to hit them. I'll hit them nicely, but pretty hard to go, you know, not sure you're ready for that yet. 01:09:42 - Scot Wingo Yeah. 01:09:42 - Chris Heivly And by the way. And every dollar spent on hiring a sales team will only be wasted two years later. 01:09:47 - Scot Wingo I was going to say what, you know what, what will happen is they think they're through product market fit. They'll scale, go to marketing, and they'll, it'll look good at first because you're closing deals, but then like, the tail catches up and then you've burned through a lot of capital. Yeah, you got to really nail that before you scale. Yeah, yeah. So let's say someone looks at that and says, you know, that's going to Take forever. What are the Chris Hively top tips? Now? You've seen so many companies. What are the top tricks to get through product market fit as fast as possible? 01:10:16 - Chris Heivly You know, I'm going to answer that question in a second, but I want to laugh a little bit and tell you so. By the way, one of the things I always do when I sit and talk to someone, I said, listen, here's my thoughts. Use it, don't use it. I'm going to sleep the same tonight anyway. Yeah, so I think one of the things about being a mentor and advisor is that, you know, I can't tell them what to do. It's not my job to tell them what to do. You know, if you're a current or future mentor, like, this isn't your business to assign, you know, tasks and do anything. So my approach is definitely more Socratic and more. By asking questions. 01:10:52 - Scot Wingo Yep. 01:10:53 - Chris Heivly So back to your. So repeat your question again. Sorry about product market. 01:10:57 - Scot Wingo Over time, you've seen enough of this. You've probably seen some best practices for ways you can kind of like, there's no silver bullet, right. You can't just like go from 0 to 100, you know, from napkin diagram to product market fit. But there's some things you can do, you know, that you have seen done that, have kind of like sped it up. Like what. What can. If you were meeting with a founder and they said, how do I speed up this path, this path to product market fit, what would you say? 01:11:22 - Chris Heivly Well, it depends on what the product is a little bit. And even just enterprise versus consumer, I think the answer is different. But let's just. 01:11:28 - Scot Wingo Most companies in the triangle are B2B, right? 01:11:30 - Chris Heivly So let's. I was gonna say let's do kind of more B2B or enterprise. You know, I'm gonna ask them, I'm going to say, all right, so, you know, I don't think you're going to be a product. You know, I think. What do you think? How many customers do you think you'll need to your product market fit? And I have a number in my head. And so, you know, they may ask or they may waffle around, and at some point I might say, well, I think you need to get to 50 customers, right. Some B2B number, consumer, that might be more like a thousand. Right? So I might say 50 now, by the way, I. I might add, you know, so how. How can you and I prove to an investor who wants to see product market fit, you know, how long do those customers have to be engaged? So that's one of my favorite work, like the engagement part. And so, you know, at some point, I'm going to try to get them to come up with, like, at least three months of engagement. And then how often. Is it weekly? Is it daily? I mean, the old adage for consumer products is, if you're not touching my product daily, they're not worth. Right. That was the bar. So what is it for? You know, and you know, we're not even talking about how you acquired those customers. I don't care if that was manual to get to 50. Right. I don't care, because you're not scaling it yet. But I want to know that you know. And then I usually say, so tell me about your. The last five customers that you've. Tell me, what's their names? Who are they? What do they do? How do they use your product? If you don't know answers to those things or I know I'm maybe not answering your question the right way. You know, what are the tips and tricks? Know all those things? 01:13:03 - Scot Wingo Yes. Yeah. You know, don't customer. 01:13:06 - Chris Heivly Yeah. And don't scale. Right now, your job isn't to scale. Your job is to really understand your customer's problem, how your solution fits into that, how important you are to them. Because if you can find that magic, then you can find a thousand others. But don't try to figure out how to find a thousand others until, you know, the first 50. To me, that's very like a Seth Godin kind of approach. Like your first rabid thousand customers. That's who you care about. 01:13:30 - Scot Wingo Yeah, yeah. So it's not a revenue number, it's not a number of employees, it's not money raised. It's all customer metrics. So just kind of summarize them. How many do you have? You know, how engaged are there and the duration of that engagement, and kind of like the depth of the. The frequency of that engagement. And you would expect a founder and the founding team to really be locked in on these customers, answer questions, the. 01:13:55 - Chris Heivly Depth of their understanding of their business. 01:13:57 - Scot Wingo Who's your biggest customer? Who churned? Why? What are you doing about it? So what you're doing is, though, you are setting them up to have a successful raise, and it's easier for you to be the bad guy than they're out fundraising and be the bad guy. Yeah. 01:14:13 - Chris Heivly And I, I think that's a nice insight into my approach is I'd rather, you know, I stole a line from Brad Feld and what their rules were, working with Inside Foundry with The other partners, which was. And I've applied it in a lot of different ways, which is honest feedback delivered kindly. 01:14:33 - Scot Wingo Yeah. And so you don't have to be the Simon Cowell. 01:14:37 - Chris Heivly No, I'm not going to be an ass or a dick about it, but I'm also, and I, by the way, I've gotten better at this in the last 10 years than I was in the first five years. I don't have to be just a cheerleader. I will cheerlead, I will encourage you, and I'll maybe chart up, help together, chart a path. But I'm also gonna tell you, here's where the reality is. So when that entrepreneur says, I want to replace Uber, he's like, okay, that's a massive undertaking. Let's start to, you know, what do you got so far? Why are you going to be different? How are you going to differentiate yourself? You know, again, I will not tell them that's a stupid idea, but I'll ask a bunch of questions that hopefully will reveal that. 01:15:13 - Scot Wingo Okay, so then you got to the end of that four years and then why'd you guys decide not to go forward? You seem to have about like a three or four year clock. Did that go ding and you wanted to go do something else or what was kind of like the tale of that? 01:15:28 - Chris Heivly Yeah, it's probably yes. And Dave and I went out to raise. Remember, we raised about 7 million the first time we went out to raise 25 million. I now understand the same trajectory tech Sarge was on. Just like three to five years difference. Right. And we got to about 13 and 2016, and then it just stopped and zero for five months. I think many would have done a rolling close and just closed on that and went forward. Our goal at the time was to expand and run programs in Wilmington winces of Salem and start to kind of make a statewide platform. I thought, you know, we're still a very developing community here, and those were very nascent, but maybe we could create a kind of a bigger, you know, the sum of the parts kind of approach. I had set a minimum of 15, so we're very close to it. I probably drove that a little bit more than Dave, but I said, I only want to do it if we can. You know, with 25, we're going to run multiple programs, we're going to have to hire some people, and we're also going to have powder to invest in the best that came out. That's the part we didn't get the first time. Scott. I also learned that the Second fund is actually the hardest fund. I didn't know that at the time. 01:16:49 - Scot Wingo It's like the mythical man month applied to fundraising. Yeah. 01:16:52 - Chris Heivly And, and you know, like, I guess, you know, of course, totally in hindsight, but, you know, by the second fund, they want to know some of your results. Well, we're seed fund. We're four years in. Some of them were three months ago. We're not going to see results for four or five years, so we're kind of caught in this netherland. Your first fund is all promise. 01:17:13 - Scot Wingo Yep. 01:17:13 - Chris Heivly Your third fund is definitely results. 01:17:15 - Scot Wingo Yeah. 01:17:15 - Chris Heivly Your second fund, depending on the timing, is this ugly stepchild. 01:17:19 - Scot Wingo Well, it's even worse because the, there's this thing called the J curve where. And this is what like, punches you in the face as a early investor, is you're, you're, you make, you deploy all this money and you're like, man, we invest in good. And then it's like loss, loss, loss. All your losses come first. 01:17:33 - Chris Heivly Yeah. 01:17:33 - Scot Wingo Like you're just getting punched in the face. And then you have an exit. But it's like kind of a bad one. 01:17:38 - Chris Heivly It's okay. Yeah. 01:17:39 - Scot Wingo And then another one. And then like you're, you know, you mentioned you still have what, eight companies going? 01:17:43 - Chris Heivly Yeah. 01:17:44 - Scot Wingo Like, so then your best ones happen. You know, Last tail end, 10 years is the average. So that makes it really hard to ask questions like, well, how many exits have you have? How many zeros? 01:17:54 - Chris Heivly Right. 01:17:54 - Scot Wingo Well, we got some zeros and no exits yet. Yeah. So it's. This is the hard thing about, about. And then this 10 year cycle makes it hard to Course, correct. 01:18:03 - Chris Heivly Yep. Yeah. You really, you got these like, like opposing kind of head. 01:18:09 - Scot Wingo I kind of feel your pain on that one. 01:18:11 - Chris Heivly Yeah. And I also have to be honest. I mean, I've raised, you know, between the corporate VCs, and, you know, I probably raised, you know, 60, $70 million in different ways over the years. I probably deployed just as much. I'm not a very good fundraiser. And there's something in my mind psychologically, and I only know this in hindsight, having gone through that year that when we tried to raise 25, I just, there's something about, like raising money for an idea, which is I can point to the plant versus raising money for me. And again, it's my problem in hindsight, I think I'm not sure I'm a great fundraiser. I'm not sure I told the story the right way. 01:18:53 - Scot Wingo So you're probably a little too honest. Yeah, Sometimes I'll have LPs come up and they're like, well, how does this private company investing thing work? And I'm kind of like, I really think you're ready for the risk profile. To me, that's the same if you. 01:19:05 - Chris Heivly Were asking that question. 01:19:06 - Scot Wingo Yeah, I'm talking about angel investors, not institutions. 01:19:08 - Chris Heivly But yeah, yeah, so, so which is fine. I mean, you know, but if I. 01:19:13 - Scot Wingo Was a good salesperson, I just like want the money no matter what. So like there's, there's like a little bit of a boundary that you probably don't cross that some people do, but. 01:19:19 - Chris Heivly Yeah, exactly. Yeah, I, I definitely know, you know, that I can't cross a boundary. 01:19:24 - Scot Wingo Yeah. 01:19:25 - Chris Heivly Even, even if I wanted to, it's going to come out just really shittily. 01:19:30 - Scot Wingo Yeah. 01:19:31 - Chris Heivly But you know, my three to five years was also up, so this was a seven year run almost. So. 01:19:36 - Scot Wingo Yeah. So then you got latched onto techstars. How did that happen? 01:19:40 - Chris Heivly Yeah, I mean, another great story. I mean, I mentioned that in 2009 I reached out and David Cohen and Brad Feld had given me a lot of information about how to run a program in accelerator and I kept in touch with them just as a good kind of connecting piece. But after Dave and I decided to shut down the startup factory, I reached out to David Cohen and I said, you need to replace us here. Like our community is mature enough. You guys need to come in. And so we had a couple chats over the phone over a couple months. 01:20:16 - Scot Wingo And the pitch was techstars. Triangle. Triangle techstars. 01:20:20 - Chris Heivly Yeah. Which I still think is something that we should think about. And by the way, they're thinking about it. So. And it's, it's a, it's a, the story is a, is a nod to, you know, keep connections and don't be afraid to reach out and this networking thing, whatever it is. And so Dave and I had a couple chats over a couple months and at one point he said, hey, you know, why don't you come out and spend the day with us out in Boulder? And for those who don't know at the time, the Texar's office and Brad's foundry office are across the hallway from each other in Boulder. And he said, go out, you know, see Brad and talk to him about stuff. And I wanted to talk to him about writing a book together. That was my pitch. And just talk to Cohen and hopefully convince them that we have all the elements to, to run a texars accelerator in Raleigh Durham. Again, complete community approach. And the story goes, I sit with Brad first And he says, what are you doing? I said, one of the things I'm thinking about doing is that there's 14 decently sized cities within four hours of Durham. And many of them have come to Durham, you know, wanting to see how the hell we do this entrepreneurial stuff. And maybe I'll raise a little 5,8 million dollar fund, and I'll go out and run some workshops in these places and help them out, and I'll cherry pick a couple interesting. You know, I'll do some. Something like that. Maybe that. And Brad goes, huh? I know you're meeting with David and we're done here. Tell him that. Make sure you tell him that. I said. And then he gets up and he goes to the bathroom. I haven't. I haven't confirmed this yet. I think he goes out and he plants a seed, right? So an hour or two later, I'm sitting with Cohen. So what are you thinking of doing? I tell him the same thing. And he said, well, how would you like to do it for the world? And I said, what are you talking about? And he said, well, Brad put a little bug in my ear. We've been wanting to do this. How do we help other communities kind of rise and share our insights? 01:22:15 - Scot Wingo At this point in time, techstars is only in Denver. Or had they started to do something? 01:22:18 - Chris Heivly Oh, no, they were probably 25 to 30 around the world. 01:22:21 - Scot Wingo Okay, gotcha. 01:22:22 - Chris Heivly Yeah. So this is 2017. Okay, yeah. Dave and I shut down late in 2016. This is late in 2016, December. And I'm like, all right, I'm game. And we're like, well, how do you want to do this? Do you want to do it inside Tech sars, outside Tech sars? I'm like, let's. I'm not. My ego's in check. I don't need it to be called Hively Co. You know, let's use tech stars. 01:22:45 - Scot Wingo Hively Stars. 01:22:45 - Chris Heivly Hively Stars, yeah. Star Hively. And so, yeah, went and spent four and a half years building a consulting business. Flew all over the world and talked to guys like you and I and in 100 cities and did some. We. We had 15 contracts that I sold totaling about eight to $9 million. Some of them three months, some of them three years. And yeah, from Fort Wayne, Indiana, to Lima, Peru, to Taipei, Taiwan, to on and on. 01:23:14 - Scot Wingo So their model seems to be they'll find they need a sponsor, so someone has to put up some bucks. And then sometimes it's a big corporation like the Cox one or whatnot. 01:23:23 - Chris Heivly Comcast and Alabama Power and. Or. 01:23:26 - Scot Wingo And then. Or like a nonprofit, like the CED kind of like somehow coalesces a bunch of money. And that's probably the minority of it, though. It seems to be more corporate dollars or. 01:23:35 - Chris Heivly Yeah. 01:23:36 - Scot Wingo And then they have techstars something. And so it's like a syndication type model. 01:23:41 - Chris Heivly Yeah. And that was kind of. I mean, when I was there, they got up to, you know, 48 or so accelerators running around the world. The quick story is, as I left, you know, I was just. I. I did my three to five years again. Covid. I can't fly anywhere. I don't want to fly anywhere. Time for me to chill out a little bit. I miss spending more time back in the Triangle. 01:24:04 - Scot Wingo Nothing's more exhausting than that. Travel. It's like fun when you get there, but just like the whole. It's very. It increases your stress levels. Things at home are stress. It's just like, it's very hard living. 01:24:13 - Chris Heivly And Scott, you know, I'm not a young guy. I'm probably like, I'm not just the og I'm the O of the og I'm the old of the old guard. I know it was original gangster, but anyway, I'm the old guy. And so I remember one year I did nine international trips, including India and Taiwan twice. It just gets tiring. 01:24:31 - Scot Wingo Yeah. And then, you know, Congrats. You got 2 million miles. You get to travel more. 01:24:34 - Chris Heivly Yeah, exactly. 01:24:37 - Scot Wingo Exactly what I don't want to do. 01:24:38 - Chris Heivly Yeah. But I do miss all the upgrades, by the way. 01:24:41 - Scot Wingo Upgrades. Upgrades are good. 01:24:42 - Chris Heivly Yeah. But, you know, the. The finish, the tech stars thing, it's. It's interesting. I mean, I'm still friends with those guys and we still talk every so often and. And so they hired a CEO to kind of really blow up big. And it didn't work out. Most of the time that I've been gone now three years, David has taken the CEO role back. And, you know, I won't share any inside stuff, but it's kind of like a return to even. Maybe before even the. The. The corporate deal. And the basics are community led, community oriented. The community can raise the money. Tax charge will bring a sprinkle as much magic from their brand and their experience as possible. And so they'll probably get smaller to get better. 01:25:32 - Scot Wingo Yeah. I think Brad did. They just announced they're not going to keep. They're. They're not going to raise the next fund. 01:25:37 - Chris Heivly That's correct. 01:25:38 - Scot Wingo Yeah. 01:25:38 - Chris Heivly It's been about six months. 01:25:39 - Scot Wingo It was right on the way over here. I was talking to an entrepreneur from out there and he was like, you know, it had a huge impact on him. Like they were just like we don't know what's going to happen in Denver and Boulder anymore. Like, you know, I guess they had two long standing firms that both are winding down right now. Yeah, kind of, kind of. 01:25:53 - Chris Heivly Well, tech stars during this period where this woman came in the run Maille, they decided, you can imagine a program that runs for three months a year, once a year and all this overhead of office and stuff for three months a year. And so she decided that the way was only run in like LA, NY, London and Singapore or something like that. And so all the programs, the one in Alabama, Cox, they're going to shut all those down and move them all to New York. That didn't go over very well. Yeah, including shutting down the original Boulder 1. Austin, Texas, Seattle, the guys in Seattle, they were the third city in I think it went anyway. So they're going to return to that and, and change the model so that it's not as expensive and places like Raleigh Durham can figure out how to engage with techstars in a positive way. 01:26:43 - Scot Wingo Yeah, it's perfect for like a co working place just like rent a room for I don't know. 01:26:48 - Chris Heivly Anyway, they have a lot of magic to help sprinkle and learn. Especially to places like that are, you know, I, I would put us in kind of a high developing. I, I in my book I talk about nascent developing, emerging and leading. We're definitely in the emerging but there's a lot, you know, there's hundreds of places that are in that developing that could use a little bit of techstars magic to hopefully grow up to be something as special as Raleigh Durham. 01:27:14 - Scot Wingo Yeah, that's a good transition. So after techstars you are building forts. Let's talk about that. Like where does that come from? Is that just hanging out with the grandkids building forts or does this go back to Davy Crockett? It kind of when you were a kid like where somewhere in between. 01:27:31 - Chris Heivly You know. So I built a lot of forts as kids and I'm talking about lots and lots of forts. So I love, you know, we had a woods near us and a creek or a creek if you're from Philly. It's a crick that ran through it, built lots of forts. Guy named Marshall Clark who with me wrote a lot of the original, you know, the software for those CD ROMs, Apple Newtons and, and MapQuest. He and I have done three or four deals together. And somehow. And we're at this point, we can speak in code, our own code. Right. About how we riff on ideas, and somehow we stumbled upon the metaphor of building a fort. So if you think about building a fort, right, some of the first questions you ask is, okay, where are we going to steal the wood? Where's it going to be? What's going to look like? And so there's a lot of metaphors and startups there. So I've used this build the fort analogy in both my books and in my consulting practice and in my writings. And the idea here is I'm gonna. I'm trying to simplify things to eliminate the shit you don't need to worry about. So I'm sure I don't see this as much. I used to, but, you know, back in the early startup factory days, you know, these three guys, MBAs from UNC or Duke, would show up and they like, I'm the CEO, I'm the CEO, I'm the cfo. And I'm like, okay, cfo, you can go home. Like, we don't. There's nothing to count. 01:28:56 - Scot Wingo Yeah. 01:28:57 - Chris Heivly For probably years. So unless there's another role you want to take. Right. And to the point, you know, like, let's simplify this. Like, back to customer. Who's going to be your customer? What are they going to look like? Why are they going to care? So that's the whole idea of the build a fort metaphor that I try to bring. Just simplify. 01:29:15 - Scot Wingo Yeah. So if folks are interested, you can get them on Amazon. And then you. You have an awesome newsletter and it's called Build the Fort, but it's@higly.com. 01:29:23 - Chris Heivly Yes. Is that right? Yeah. 01:29:24 - Scot Wingo Yeah. 01:29:25 - Chris Heivly And then it comes out weekly. 01:29:26 - Scot Wingo Yeah. So if people want to find you on LinkedIn and you're. You're just. By nature, you're one of the most approachable people ever. So people, you're leaving for a period of time, you're kind of gone. You. You traveled the globe now. So, you know, but you home. This is still home. 01:29:38 - Chris Heivly So it's still home. I live on a lake about an hour and a half from here. 01:29:42 - Scot Wingo Oh, really? 01:29:42 - Chris Heivly So I don't even live actually in Durham anymore. 01:29:44 - Scot Wingo I didn't know. Thanks for making the trip. Yeah. Why do you spend so much time helping entrepreneurs? That's. Some people would look at that and say, time is your most valuable resource. You're wasting it. Like, you know, you're. And you're like one of these folks. You never say, and this is when I meet people, that's what they love about the triangle. It's not transactional. So, yes, you'll help people and you don't have to be on the cap table. No, it's not like, oh, I'm glad to help you, but I need a quarter point exactly, or something like that. Why do you do that? Some people would say that's kind of crazy. 01:30:15 - Chris Heivly Yeah, I think. Well, if you say it's crazy, then you don't get it right. And, you know, it feels good. It feels like the right thing to do. And by the way, it comes back in me in ways that I can't even imagine that, you know, lift me, you know, sometimes monetarily, sometimes not monetarily. Right. So it's not a transaction, but it's pay it forward or give first is a term. The BRAD coin that we use all the time. But in the moment it feels great. And so I'll tell you a story. I just. About three or four years ago, a woman was coming out of the Navy. I got connected to Bunker Labs, right? Which is a entrepreneurial kind of organization for veterans. And there's Bunker Labs places all over. She happens to be in Denver. So we get on office hours, we spend half an hour together. They're open, you know, open. I still do four or five of these a week. And she's like, I don't think I'm doing this. This. And to be honest with you, I don't remember what I said, but I probably asked her some questions and did my normal thing. And about eight months ago, she jumped back on office hours. And I said, so could we meet once before? I may not remember your name, but I'm going to remember your face. And she said, yeah. And in fact, I don't need anything from you today. I just want to say thank you because the words you sent me, you shared with me three years ago, pointed me in a direction. And I now have, like, she actually is using Legos. She's a LEGO certified trainer, and she uses Legos to teach teenage autistic kids, of which she has three, how to get things done and build things and work with people using Legos. I'm like, that's an amazing story. And. And a couple weeks ago she said, hey, I'm going to be either in Durham and Charlotte. I'd love to meet you face to face. And so I went and we had a beer together Monday. So I tell that story to say, you know, at some point, maybe something will waterfall to me. I don't know, but you plant all these seeds and you're doing good anyway, and it helps my region become economically better. She's going to, she's running these cool things, helping people out. It's just the damn. It's just the right thing to do. 01:32:22 - Scot Wingo Yeah, I'm pretty myopic. I just kind of stay in our little ecosystem and occasionally I'll go around, but like, you know, I'm like 99.9% here and it feels really special to me. But you've, you've seen so many. Are we just like the other ones? But we just feel special? Like what, what about the Triangle is kind of unique or are we really not that unique and this is what ecosystems just look like? 01:32:43 - Chris Heivly No, we're really unique. And that thing you mentioned before is special to us. One of the things, as you know, you can get a meeting with any of us without any hassle, and we'll all take that meeting. It's up to you to get the second one or the third one if there's going to be one. Right. And this is actually a great segue into Raleigh Durham Startup Week. You know, after spending those four or five years with techstars flying over the place and I wanted to get back to my community, Raleigh Durham, I wanted to make sure that specialness stayed and that all the new people here didn't. That didn't get lost or filter down. So I've been, I mean, from little places like, you know, Fort Wayne, Indiana or Richmond, Virginia or Knoxville, Tennessee, to big places, la, Seattle, Amsterdam, Berlin, I can tell you that it's. This is an easy place to connect into. I believe that connectivity is actually the baseline of great being a great entrepreneur. Learning from others, finding customers, investors, whatever, getting advice, not looking at life as a zero sum game. You raising money doesn't mean I can't raise money or is a knock to me. You know, one plus one plus one equals five kind of mentality. We exhibit that, I think on a daily basis here. And I want to make sure that doesn't go away. And that's why I created Raleigh Germ Startup Week with Archie and a group of people. 01:34:06 - Scot Wingo Yeah. So Raleigh Durham Startup Week is in the spring and this, we're recording this at the tail end of January, but it's going to be coming up on second week in April, April 7th to 11th. And you know, it's right there in the name Raleigh Durham Startup Week. So what you do is you take the five days of the week and you do three in Durham and two in Raleigh it's free. Which is really nice because I always hear folks, you know, say about some of the other programming, you know, it's too expensive. I'm going to spend 100. And this. A lot of people think this is crazy, but, you know, when you're, when you're in that zero to one phase, every dollar, every $500 is like some ramen. You're gonna, you know, or maybe a rent check that's harder to make because you're putting all your. You don't have any income coming in and you're just basically, you know, doing that. So that's nice that you guys make it free. We appreciate that. So this will be the third year or fourth year? 01:34:54 - Chris Heivly Fourth. 01:34:55 - Scot Wingo Fourth year. 01:34:55 - Chris Heivly So 1100 people showed up last year. 01:34:57 - Scot Wingo Yeah, let's, let's kind of. So, so now you have over a thousand people. The first one was smaller and about 300. Yeah, so it's grown really nicely. What's your vision for it? Where does it go? 01:35:10 - Chris Heivly Well, let's start at. The thing I'm most proud of is that this is an all volunteer organization. We probably have 25 to 26 people. It's very grassrootsy and ground up. Archie and I, you know, we're co chairs of the event for the first three years. We'll soon be announcing we have two different co chairs for this year. So we kind of are, you know, helping to build, you know, the next. 01:35:36 - Scot Wingo You know, it's designed to live in perpetuity because it's not tied to any two. 01:35:41 - Chris Heivly It's not. 01:35:42 - Scot Wingo It's almost like I think you've designed it so you're like, you want to roll off. 01:35:45 - Chris Heivly Exactly. And in fact, yeah, I think I remember year one. I was, I was trying to say like, so when can I roll off? Turns out it had to be when you were on stage at the, at the Carolina Theater where you were helping us out with the keynote. I'm like, well, turns out not year one, you know, maybe year four. We're official 501c3 we run on a shoestring. One of the things I'm, other than this, all volunteer. Everyone takes a role in a really good way. Probably the other thing I'm proud of is the fact that the most oft heard feedback we get from entrepreneurs is I've learned more in the last two days than I've learned anywhere else for the last year. And, and then they, and it's free, you know, so that's, that's amazing. Right? So that's, that's a great addition to our ecosystem. Now the question is, now we have this 26 person group, what else can we do? We've run two of some far. Two of these so far. They're called knowledge spikes. And these are little half day, very kind of specific. I think we did one on product marketing, we did one on social media for customer acquisition. And you know, and these are part of the group of 26 who say, Hey, I have an idea. I want to run, you know, and everyone helps them run this thing for half a day. So I'd like to see us run things monthly. So not just the annual event, but things every month. So I think we'll start adding to those. 01:37:08 - Scot Wingo Anything else you want to add? 01:37:10 - Chris Heivly No. 01:37:11 - Scot Wingo So appreciate you coming in and doing this. I kind of, I get a little cheesy on this, but I feel like you and this generation, that's a bit ahead of me. You guys have planted some really good seeds here and created an organism that I'm trying to have an impact on. But, but to your point of rolling off with Raleigh Durham Startup Week, you know, one of the reasons for this pod is to like explicitly state this stuff and show folks what's going on and say, we're counting on you guys downstream, this next generations to keep this vibe going. The culture that's been created and this openness allowing anyone into the ecosystem. But also it's not transactional. We don't want to be the next Silicon Valley. We want to be our own thing that's different and better and special. 01:37:55 - Chris Heivly So, yeah, the best of all we got. 01:37:56 - Scot Wingo Thanks for all you've done to help create that. 01:37:58 - Chris Heivly Thank you. 01:38:04 - Scot Wingo For more tweener content, check out the Triangle Tweener Time substack@tweenert.substack.com For more tweener content, check out tweenertimes.com thanks for listening and we'll see you again soon on Triangle tweenertalks.