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.
…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!
Full-Service Music and Voice Lessons Provider Leverages Internet to Unite Students and Music Teachers
SAN DIEGO–(BUSINESS WIRE)–TakeLessons, a full-service music and voice lessons provider offering private lessons in over 2,800 cities across the U.S., today announced that it has raised $6 million in funding led by Crosslink Capital, with other investors including SofTech VC and other prominent angel investors. Founded in 2006 by Internet entrepreneur and avid musician Steven Cox, San Diego-based TakeLessons helps music students connect with a Certified TakeLessons™ instructor that most precisely fit their needs regardless of age or skill level. Eric Chin, partner at Crosslink Capital, will join the Board of Directors as part of the transaction.
“TakeLessons was founded out of a personal experience. A friend was searching for a guitar teacher for her 7-year old daughter and didn’t know where to look. An Internet search turned up a list of teachers, but no way to compare them or to see if they were experienced, professional, and safe to come into her home,” noted TakeLessons founder and CEO, Steven Cox. “That’s when I realized there was an opportunity to use the Internet to establish a national brand that would stand behind the customer, offer a safe, exceptional service, and help artists make a living doing what they love.”
Scheduling and payment is handled by the TakeLessons platform, which then pays the teachers, letting both students and teachers concentrate on the lessons, while the company handles the administrative functions.
“The moment we heard about TakeLessons we were intrigued by its concept,” said Eric Chin, partner at Crosslink Capital. “Our research convinced us this was a business idea and model that has almost unlimited potential in the world of music and well beyond. Meeting Steven and his team sealed the deal for us. They’re as passionate about this business and its future as it gets. We’re looking forward to working with them to grow this brand.”
TakeLessons currently offers students access to a roster of teachers in 35 music classes, including voice lessons, piano, drum, guitar, singing, and saxophone. The company also offers courses in less common instruments, such as harp, mandolin, ukulele, harmonica and Flamenco guitar, as well as DJ lessons, music recording workshops, songwriting, speaking voice and music performance.
TakeLessons has a meticulous, multi-step screening process for its teachers. Fewer than eight percent of teaching applicants make it through the selection process and receive the Certified TakeLessons™ Instructor designation. Students are asked for feedback after each lesson, and teachers that continually receive mediocre or poor report cards are dropped from the lineup.
TakeLessons recently partnered with electronics and technology giant, Best Buy, to offer music lessons inside their stores. As of June, TakeLessons teaches in over 50 Best Buy stores nationwide, with more stores to be announced in the fall.
Founded in 2006 to help people discover their creativity and pursue their passions, TakeLessons is America's leading full-service music and voice lessons provider. With lessons taught by Certified TakeLessons™ instructors in thousands of cities across the US, TakeLessons makes it easy for students to start living their dreams through music. TakeLessons also offers turnkey music programs for schools, government agencies, and community centers, as well as at-work lessons programs for corporate clients and their employees. Visit the company at http://takelessons.com.
About Crosslink Capital
Crosslink Capital is a leading stage-independent venture capital and growth equity firm with over $2 billion in assets. Crosslink, which traces its roots back to 1989, was among the first and largest investment firms in the U.S. to integrate public and private growth/technology investing in three families of funds: venture capital funds, long/short hedge funds and a unique hybrid crossover fund. This strategy allows Crosslink to partner with its portfolio companies on a long-term basis. With more than 20 years behind it, Crosslink Capital has invested in over 100 private equity portfolio companies, at the early, mid, and late stages including Pandora (NYSE: P), Ancestry.com (NASDAQ: ACOM), Omniture (acquired by Adobe Systems), Equinix (NASDAQ:EQIX), Virage Logic (NASDAQ: VIRL), Carbonite, BlueArc, Force10, Intematix, SeaMicro, and Yipes (acquired by Reliance Communications). For more information on Crosslink, visit http://www.crosslinkcapital.com
I routinely like fixing a martini and writing about philosophy and what I'm experiencing in life at that moment. It helps me stay clear and focused on the bigger picture. It helps me not get caught in the 'thick of thin things'.
I was looking through a few old notes and I fould this posting I wrote 10 years ago. At that time, I'd had a business win under my belt and thought I was hot shit. Instead of continuing to better myself, I had slacked off and stopped challenging my mind. Even though I had more financial resources, I was emotionally empty.
Sometimes I could not see my path until I was able to look back and catch the vibe of where I was, what I learned, and how I've grown. I'm thankful for the people in my life that continue to push me.
May 6, 2001
I am realizing that if I don’t start acting now, continuing to reinvent myself, I run the risk of being one of those middle-aged guys that was mediocre, but never stood out. A good guy, nice person. But never did anything extraordinary.
I am afraid.
Afraid to even type the fact that I’m scared of letting my life pass without making it count.
It is time to re-invent myself. To become the mover and shaker that I know I am. It is simply an unfulfilling life to be a nobody – someone that doesn’t make a difference – someone who doesn’t risk. Half of me runs afraid of losing what I have (my house, etc) and the other half run afraid of being mediocre and not becoming all I can be.
I lost some of the FIRE I was famous for.
Somewhere along the way, I lost the frightened and scared kid that pushed me away from failure.
Somewhere, I lost the necessity for action. I lost the drive that pushed me never ever to settle.
I lost the bull-headed, focused, belief that anything was possible and nothing was good enough.
I lost that feeling that drove me to go to school – that drove me to try my hand at buying houses – that drove me to give up my job and head to Vegas – that drove me to quit a well-paying job for the shot of doing something great.
In essence, I decided to let my life just pass me by for the past few months. I decided – by not deciding – that I had pushed hard enough and now was a time for coasting.
Coasting is being mediocre. It's for the 95% who do not care to push forward.
Coasting is compacency. And complacency is death.
And there I sat, in the midst of the very success I created, and let that same success drain me from the core of what pushed me to start with.
It’s wrong. It’s so wrong.
It’s not the matter of how much cash I have, or what car I drive. It’s that I always keep pushing myself. I always drive forward.
Steven, your goals – your drive – is more important. You are slacking when you fail to commit! I must stay committed. I must stay focused.It's not about setting goals, it's about having the discipline to achieve them.
Take my weight for instance. This is not just about weighing 185. This is about being able to sacrifice for my goals. This is about being able to finish the workout and cardio – even though I feel like quitting.
Do you understand?
This is about CHARACTER.
This is about being able to keep a long-term commitment and surpass all expectations.
This is about pushing myself – getting the FIRE back – getting the drive back.
This is about having the discipline to control my destiny!
This is one way you are going to get your life back!!! What’s “good enough”? Good enough is for losers. Good enough is for people looking for an excuse. I've decided that good enough is not good enough for me.
What motivates me is the pursuit of the challenge, creating, winning, helping someone else achieve, love and loyalty, deep friendships, and fuck-you money. I refuse to hang out with people who are not striving to become better.
It's time to make a change. It's time to require more of yourself than others do. It's time to become passionate again.
In order to make change, I can’t just change my behavior. I must change my belief of who I am. I must change my IDENTITY to myself. I must BE my WHY. Step into your new role TODAY. Change your identity to become what you want. How would I act and feel and think if I was exactly like I want to become?? Go out and DO and KNOW.
Today I will dedicate myself to make a change. And I will be a better man for it.
I'm a big fan of Richard Branson. Half because he's a brilliant mind. Half because he's always held up a big fat middle finger to the status quo.
He does things his own way, takes calculated risks, sometimes loses, sometimes wins, but always learns.
That's a recipe for long-term growth… and i dig it.
I just finished a couple books he has written and here are my takeaways I've called "Richard's Rules of Business". These aren't officially his rules, just ideas and concepts that I've internalized.
- Break the Rules. Start from the attitude of "Yes I can – OF COURSE I CAN" – Unstoppable self-confidence.
- Have fun. Fun should be a prime business criteria. Fun is at the core of how he likes to do business.
- It is only by being bold that you get anywhere.
- If you are a risk taker, then the art of a good risk is to protect your downside while not limiting your upside.
- The bgest way to cope with a cash crisis is not to contract, but to expand your way out of it.
- Make up your mind on whether you can trust someone in the first 60 seconds. Then, go with your gut.
- As Oscar Wilde said, "The only thinkg worse than being talked about is NOT being talked about."
- Separate your companies. This way ione fails, it will not threaten the rest of them. You will most certainly have disasters, so your job is to contain them.
- Numbers can be manipulated to prove anything. Don't just go by the numbers – go with gut instinct when looking at business.
- "My interest in life is giving myself huge, apparently unachievable challenges and trying to rise above them."
- When starting a business, survival is the key. Expenses are the wolves. Protect your young with cash.
- Always be reinventing yourself. The world moves and you have to stay ahead.
Here is the Q&A:
Audio MP3 download of Steven Cox interview is located here:
Nick Hampshire: What is your philosophy on life and business?
Steven Cox: PERSONAL MISSION STATEMENT
I live my life in a way that makes a positive lasting difference on people and my environment. I support my friends and family with my time and finances. I live with the full expectation of succeeding and excelling in all I do. I understand that the value of life is not in what I own, but who I love, and what I experience. I make my life count by being a man of integrity that accomplishes greatness by reaching out to help others, being passionate about what I do, and fully developing my mind. I don't have the right to be ordinary. Therefore, I lead, I lift the human spirit, and I will create a legacy and an empire: an empire of both inner and outer wealth, and a legacy of love.
How did you get your start in entrepreneurship?
- College: Apartment locator service, bought seven houses on land contract/options, tried to buy a pizza business
- After school: Fisher scientific, but tried to open a gym
- Left my job to work for a startup ecommerce company
Do you remember your first "big" deal as a young entrepreneur and do you mind sharing a little about it (details, thoughts, feelings)?
- College – thought I could do everything. It wasn’t until things went bad that I started realizing that there was science and methodology behind operating a business. It’s harder than it looks.
- First Startup– landed University of Nevada. Wasn’t even in our wheelhouse. Changed the business.
What made you decide to start your own business?
- I grew up poor. Wasn’t happy washing dishes and working for other people. I liked the creativity and struggle. I liked the uncertainty.
As you have started different businesses over the years, have the lessons you learned while starting each business changed? If so, how have they changed?
- Balanced optimism: I now focus not just on the upside, but immediately how to mitigate risk.
- Long term: entrepreneurship is not a quick fix to wealth. Some people get luck, but there is a very big chance that you or me will not be lucky. Thus, we have to understand there is a large price to pay, and we have to be willing to pay the price. Else, just go get a job.
What do you see as the biggest challenges that entrepreneurs face?
- Blind towards risk
- Trying to do too many things for too many people– no focus
- Not clearly identifying a problem
- Understanding your own weaknesses
- Stay up: “Certainty in the face of fear”
If you had to do it all over again, how would you start?
- Find a problem
- See if it’s a big enough problem that, if you can solve it, it will make a difference.
- Focus on solving that problem. Find people that will support it through money and/or time.
- Don’t think about the exit.
To all of the young entrepreneurs getting started in business now, what advice can you give?
- Plan on a long journey. The ‘quick hit’ is the exception.
- The 4-hour workweek? Complete horseshit.
- Want to build something that lasts? Work ½ day. (12 hours!)
- Because it’s a long journey, pick something where you’re passionate about solving a problem for others.
Have confidence in yourself and your ideas, but don’t believe your own hype.
- Don’t let optimism overpower realism.
- Admit when something isn’t working.
- Measure everything.
- Fail fast.
Build a team. Your job is to:
- Share the vision
- Hire smart
- Build a culture where others can strive
Capital: Raise enough to allow you to make mistakes with respect to your plan, but not so much that it makes you cocky which leads to laziness.
- Your forecasts will be off.
- Stuff you though would work, won’t.
- Competitors will not sit idle.
- Perfection is the enemy of good enough.
Know what your shooting for
- Have written goals – Quarterly, monthly, weekly.
- Hold each other accountable
I often get asked questions about "quick cash" techniques while someone is getting started with a venture; if you had to make $1,000 in one week with no list, minimal cash, and no contacts, what would be your strategy?
- Honestly, I would say that you need to go get a job. Entrepreneurship is not a one-week thing.
What systems have you created or borrowed to manage & grow your companies?
- I have a personal goals system that allows me to manage different areas of my life (spiritual, career, relationships, social) and see results year after year. I’ve applied that to business as well.
- SEED – SELECT – AMPLIFY: Don’t ever put out perfection. Just get it out and iterate.
- Culture matters – create a culture of owners where they focus on constant improvement.
How have you used Strategic Partnerships with other companies & individuals to grow your business?
- Life is about people, and business is about providing value for those people.
- When you cut deals, you have to focus on the value you can provide.
- Deals take forever
- Never count on them to go through.
- After they go through, most of them won’t work out
- So, don’t rely on them to make your business. Don’t ever be reliant.
If you could go back and do something differently, what would it be and why (business or life in general)?
I would’ve been less arrogant in my 20’s. Looking back, I now know to stay humble and learn from everyone I can.
What closing thoughts/suggestions/advice do you have for young entrepreneurs?
- Some people are built for companies, some are built for entrepreneurship. Find your flow. There is no one answer, only a right answer for you.
- Don’t worry about someone stealing your idea. It’s already been thought of and tried. Focus on building a team that can help you execute.
- Your first two companies or your first 3-5 years will probably not be a big success. That’s ok. It’s part of the journey. Breathe and be ok with it.
Tonight, I'll be on the panel discussing how small and local businesses can use social media to their advantage. Here are my key points:
- Focus on quality instead of quantity. Be consistent. Be real.
- Make sure someone is assigned to the task with definitive plans.
- Focus on Google Places, Facebook, and YouTube
- Other secondary tools include Google Alerts, blogging, twitter, skweal.com and groupon
- Showcase customers – not just yourself
- Answer back customer praises and complaints
Finally, remember that the quickest way to overnight success is to work years on it.
Here are a few links that I've found that can also be of help to you:
Thanks to Steve Martini at Quality First Commercial (San Diego Commercial Real Estate) for the invite.