How to Succeed in the Startup Business Without Leaving Philly

Why is that coffee-shop idea so important?
Moul: You get to know people, and there’s a more sort of natural rhythm and cadence to the relationship. And I think it helps foster more of the sense of, hey, we’re all working together here to try to create businesses, as opposed to maybe more of a—well, I’m the entrepreneur and he’s the money guy, and now I’ve got to go approach the money guy.

Gupta: Talent’s really mobile—especially young kids who can go wherever they want. I think you have to ask yourself at some point: What is it that Philadelphia needs to do to make people want to be here?

Vague: Such as what? What kinds of things?

Gupta: So look, I’ve said this, and actually I’m not going to say it again, because I’ll get quoted and have people hate me after it. But …

Come on, go ahead.
Gupta: This always gets taken out of context—I say that Philly is a lazy man’s New York. But I’m a lazy man, so for me it works, okay? There’s so much you can do in such a small area living in Center City, it’s ridiculous. I have more food and drink here than I could possibly digest in any reasonable amount of time. You’ve got performing arts as well as the galleries. I grew up in Silicon Valley, and one of the things I hated about Silicon Valley—the art scene sucks. It’s like they have all this money there that doesn’t get reinvested into lifestyles. On the peninsula in the Valley, it’s ugly building after ugly building, with such a dramatic lack of lifestyle. And that’s what I want people to recognize about Philadelphia—that there is a lot going on here.

What’s the impact of Comcast being here?
Moul: They’ve had a reputation of not being so ingrained and being a bit insular. I think that is changing with guys like Sam Schwartz, who absolutely wants to get Comcast ingrained in the community. They recognize, and Sam will tell you this, that the rising tide helps their boat as well—and so I think that is changing. The other thing is, as a community, we need to engage them on a more meaningful level than just asking them for money. Because that’s basically what they get constantly bombarded with—won’t you just fund this and won’t you fund that?

Vague: But whether Comcast engages or doesn’t engage, Comcast is one of the very best things, if not the best thing, that are going on in Philadelphia. If for no other reason than the fact that there are thousands and thousands of smart, aggressive people in this city because of Comcast, and that makes the environment better.

Let me ask you a more practical question. I was going to use the example of a 25-year-old with a cool start-up idea, but that’s clearly way too old. …
Moul: Right. It’s a 12-year-old.

Whoever has the idea, what’s the first thing they should do? Richard, what’s the first thing you would tell them to do?
Vague: I would encourage them to try to build whatever it is they want to build and to try to build it with their own resources. One of the single most important things that have happened in this whole start-up world is the collapsing cost of starting something new.

What would you guys say?
Moul: There’s so much work you could do cheaply before you actually have to start spending money.

Bookspan: My advice would be, try selling it before you have it— it’s a market-validation concept. I have way too many meetings where the basic conversation goes something like, “I’ve got this great idea, all I need is $500,000 to build it, and it’s going to be awesome.” And I say, “Pretend it’s already built and go talk to somebody. Are they going to buy it or not?”

Vague: Bill Gates sold an operating system to IBM that he didn’t have yet. [laughter]

Bookspan: My advice at this stage would be to test it now—and test it as cheaply as you possibly can. Test it on Kickstarter, test it through buying ad words—see how far down the chain people are willing to go.

Go back to my young entrepreneur. Say she’s built her app, it works, she’s tested it with some people. What’s the next step?
Moul: I don’t know that there’s a one-size-fits-all answer to that. I would certainly advocate getting involved with PSL, because you’ve got a whole community of people now you can draw upon to help you. So I’d get myself surrounded with some good people to help me get through it.

Gupta: When we first started Storably [a precursor to Curalate], we didn’t know what we were doing. We actually spent a lot of time at PTM [Philly Tech Meetup], and we demo’ed, so that’s a great resource: Get in front of 200 people and demo your product. Let 200 people yell at you and tell you this is a terrible idea, or this is a great idea. It’s free, and a great thing for you to do because at the end of the day, as an entrepreneur, the number one thing you’re going to be doing for a good while is pitching the heck out of your company—

Moul: And being insulted.

Gupta: And being insulted, absolutely. In the beginning it’s all insults; everybody thinks you’re a nut. But the biggest learning for us came from actually having gone through this once and having failed, so I think there’s a little bit of acceptance that that first thing you put out there might not make it, and that’s okay. Josh Kopelman [founder of First Round Capital] likes to say most entrepreneurs will see a body on the table and say it’s in a coma, and you have to be smart enough to know when to say it’s dead.