Steven Cox, CEO of TakeLessons and winner of 2010 San Diego Venture Group Pitchfest gives an update one year later on the progress the company has made since winning last year.
Transcription:
…Here’s a very simple message for our teachers and that is: you go teach and we will curate the absolute best instructors throughout the nation.
In fact, we hire about 5% of the instructors that apply to work for us as a contractor. We end up curating the top 5% based on an algorithm that we’ve written, as well as personal interviews that we assess each and every one of their character traits.
For the customers,we provide safe, certified instructors for them. We’ve build online tools that make the site very unique that you can’t find anywhere else in the nation. We offer 100% money back guarantee, so anyone can go out and try lessons and if you don’t like it, just give us a call back and one of our friendly counselors will refund your money.
In essence, what’s happening is the business is going really, really well.
So, I’d like to give you an update on what’s happened. We were looking for a 3 million dollar raise as of December of last year, so we started in January and we took a total of 29 meetings, most of those were in the Bay area firms, we also talked to a couple San Diego firms, talked to Brian in the LA area. From there, this has kind of been the trait. So, in 2006 we had a seed round of $200,000, we did a round in 2008, followed that up in 2010 with $795,000 and last year we closed on our first institutional round for 6 million dollars.
Our lead investor on that was CrossLink Capital. Eric Chin is now a board member, and it was our very first institutional raise, and I can say that he has been an exceptional board member. We’ve now had two board meetings and they went pretty well. They had a lot of good information that they personally helped with out with, as a CEO, and they really opened some doors. Also in the round, we had Softtech Venture Capital, which has funded a couple of pretty good companies, and we are happy to be a part of that group. Also Maynard Webb, the ex-CEO of eBay, also came on board as an investor, and we are proud to have him, as we are looking to grow our marketplaces. We are very proud to get these folks into ground.
Employee growth: Let’s talk a little bit about how we’ve done since 2010. When we presented we were at 37 employees. As of today, in San Diego, we have 92, so we are growing. We are now located downtown [San Diego] and it feels really good to be able to provide great jobs for people, but also make the positive lasting impact on both our employees, as well as our customers. Next year we are going to be on a hiring spree. We expect by the end of the next year to be at around 155 to 165 people… so if you are looking for a job, please contact this table right here.
Quarterly revenues: when I presented last year, this is where we were on our quarterly revenue chart [show chart] and this year we will continue to grow. So, we have doubled in revenue this size off a pretty good base. Again, the capital really helped the team and everything we have been able to deliver quite well.
We struck a deal last year with Best Buy Musical Instruments. They have opened what is basically like a guitar center, inside over 100 of their stores, and we are now running the music lessons area for them. In fact, you can walk into a Best Buy, buy a guitar, and also take music lessons right there in the facilities. They are using all of our software and all of our instructors, in order to do that.
I think David, is actually a customer of ours –is that right? Down in Chula Vista? Perfect, thank you very much.
The Best Buy store roll out: we started at 32 stores, then we went to 103 stores, now you can walk into any single Best Buy store throughout the nation and buy a lesson pack and we will teach those lessons in your home. So that was just completed and we are announcing that here, this week, that now we are in every Best Buy store across the nation. It was a big roll-out and it took about a year and a half and we are really proud.
For 2012, what we are looking to do is once again double our revenues. Just as important as revenues, we also want to grow our people. We’ve never had the opportunity to really invest back into our people, with training and education and developing the culture the way that we want to. We think that this year we are going to be able to do that, and it feels really, really powerful and really good to be able to do that.
Also, one of our goals is to be in the top 5 companies to work for in San Diego. That is just as important to us as the development of the revenue side. So, this is what we are going to do this year.
I’d like to also give a big shout out to our “internal team”. It’s the folk who have been with us since day one:
-Randy Socel with DLA Piper
-Barney and Barney
-Wells Fargo and CoAmerica Bank have been awesome partners.
-Steve Martini from Quality First Commercial has kept us out of a lot of bad deals and gotten us into a lot of good commercial deals. So, we really appreciate you, Steve.
-All of our accounting firm team. [Round of applause]
So, finally all I would like to say is, I cannot tell you how much I truly appreciate the opportunity just from TakeLessions, to be able to come up here and present in front of the group. I’m sure all three of the contestants tonight feel the same way. I really wanted to encourage each and every one of you – the accounting firms, the law firms, the venture capitalists—we really need your support. Over the past three months I’ve been in probably 4 start-up gatherings. And over those past 4 gatherings, there was one venture guy that showed up, and I think we can do better than that. I think we can do better to support the scene. We are doing really well, but there is always room for improvement.
We just did a slide here, which show that there are 87 start-ups right here on this screen. It’s blossoming. We are seeing this every day. People contacting us asking, “hey, how do we get started,” “hey where do I go from here,” “who should I do my banking with,” “which venture guy should I reach out to…” We think that the scene is awesome.
You know, when we were doing our funding, the number one issue that CrossLink had was, “is there enough talent in San Diego. Can we pull in extra talent from San Diego in order to grow this business?” And really, what I would say is that that’s up to us here in this room. It’s not just up to the start-ups, the venture guys, but if we all work together, what I’d love to see—mainly because I don’t want to move to the bay area, because no one wants to live in the bay area, over San Diego— we’ve got an opportunity to grow this thing, as a group.
So, what I wanted to do was challenge each and every one of you, to look around and say, “how can I get more involved in the San Diego scene?” The San Diego Venture Group has pushed us off to a great start and we really appreciate the opportunity, but it’s time to step up our game.
I want to encourage you to raise the game and make San Diego awesome. Thanks so much!
