Richard McKinnon of Less Networks Talks about His Company

Richard McKinnon of Less Networks Talks about His Company



Where are you from originally?



I was born in the Philippines and grew up in the Bay Area after brief stints in New Jersey and Phoenix.



What university did you go to?



I took a tour of colleges beginning by flunking out of the University of New Mexico because I was having just too much fun. Then, I tried my hand at aviation at Alameda Community College. When I realized that flying an airliner was more boring than glamorous, I dropped out of that too. I was 18 and in search of a life. Next, I remediated my bruised transcripts at Chabot Community College studying Criminal Justice. It seems I had a knack for law enforcement as I finished at the top of my class. I transferred to San Jose State University in Public Administration where I was exposed to Political Science, which I loved. It was there that I was introduced to the high-tech eco-system in Silicon Valley and became involved with an actual garage start-up that would eventually IPO.





What brought you to Austin?



After receiving my MA in Political Science, I came to UT for a PhD in Political Theory. Although I still love political theory, I didn't enjoy the PhD experience in UT's Government Department. After several years of trying to make it work, I eventually dropped out. It seems my academic career went full circle! The best thing about the horrible experience at UT is that it introduced me to a really great town filled with kind and interesting people. So, like so many others, I stayed. It was difficult at first to transition from academia back to the working world, but I eventually found my place in Austin's high-tech scene. It was around this time that that Silicon Valley company IPO'd and I gained the freedom to quit my job and start my own company.





What is the idea behind your startup?



We originally started as a free wi-fi company to help small, independent businesses compete with Tmobile's for-pay wi-fi in Starbucks. Nowadays, we help these businesses make sure that their customers are aware of and engaged with the business' Facebook, Twitter, and email marketing newsletter. It's pretty obvious when you think about it. Why put up a sign in your restaurant that says "Follow us on Facebook and Twitter" when you can automatically take your customers to those pages when they get on the WiFi system. We've evolved to the point that we don't even require WiFi for the solution. If a consumer wants to use their iPhone's 4G connection, then we can fall back to in-store signage that directs them to a web page and a chance to win free food for them and their Facebook friends in exchange for an email address. Just last week, Starbucks announced that their wifi is going to become free, so now our raison d ^ etre is gone. Good thing we've continued to evolve from "free wifi solutions" to "wifi-free solutions"!





What need does it fulfill?



We're focusing primarily on the food industry--cafe's, restaurants, and bars. These folks totally understand the value of word-of-marketing and many have begun playing with Facebook and Twitter. Some have gone so far as to develop a custom iPhone app. The problem is that all of these tools take time and money, yet they have no clear path to making sure that their customers even know that these investments exist!



Recently, I attended a social media summit in Hollywood and they had high-ranking marketing guys from Mazda and Kodak as keynote speakers talking about how they were able to persuade their organizations to invest in social media. They discussed the cultural change that was necessary as well as the resources needed. But you know, at the end of the day, these huge companies are still suffering from the same problem that my much smaller customers have--obscurity. I turned to my table mates at the summit and asked how many of them had ever been to either Kodak's or Mazda's Facebook page? No one. I also asked if they even knew they existed or ever thought to look. Again, no one.. So if a company with a Fortune 500 marketing budget is having trouble making people aware of and engaged with their social media investments, what's a small restaurant or coffee shop supposed to do? That's how Less Networks can help. Put simply, we put your Facebook page in front of your customers' face.





What exactly does your product do?



When we're integrated into a business's WiFi system, we automatically take people using the Internet right to the the business' marketing assets. We can do this because we control the router. Sometimes we take them to their Facebook page where they can click the button to become a Fan. Other times we take them to the business' Twitter profile where they can become a Follower. This is much more effective than putting up a sign that says "Follow us on Facebook" and hoping that the people will see it, remember it later, and then actually do it--assuming that they even know how to find the business on Facebook. In addition to increasing the visibility of social media assets, we also build-in automatic engagement by prompting the consumers to share their location and experience with their Facebook friends. If they do this, then their picture, the business' logo, promotional link, and text is posted on the consumer's wall for 130 Facebook friends to see. That something a simple sign can't do! Since we also have the email addresses of everyone using the WiFi system, we can help integrate the consumers into the business' opt-in email marketing program such as Fishbowl and Constant Contact. Finally, we make sure that the WiFi works so that the business doesn't need to worry about it.



All of this marketing activity depends on a working WiFi system, so reliable WiFi is a bedrock benefit that we provide. I mentioned earlier that we now have a "wifi-free solution" for smart phones. Unfortunately, this does depend on in-store signage, but you can't force someone to use wifi on their iPhone if they don't want to. As a result, we've had to come up with a user experience for 3G/4G consumers. Basically, they see a sign that says something like "Win a free burger for you and your friends at some easy URL.com" Then they go there on their smart phone and it prompts them for their email address and to click to see if they win. They're told instantly whether they're a winner and that the coupon was sent to their email address. The email they receive later also contains a link to share the contest with their Facebook friends. Of course, the hope is that the promotion will spread to the consumer's friends all the while collecting email addresses, raising the business visibility, providing entertainment, and awarding free hamburgers.





Who is it for?



We believe our solution is a good fit for any retail business trying to make their customers aware of their social media, but we're focusing on the Texas food industry until we have the resources to branch out systematically.





What was the most challenging aspect of starting up a business?



Starting up was easy, keeping it going is hard. I've learned that raw intelligence is not enough to succeed and an instinct for making money is crucial. I've noticed that some of my smartest friends have created the most convoluted companies and methods for earning a living. I suspect that's because more straight-forward approaches are boring or below them. It's almost like they're too smart to make money because the businesses are based on technologies they've created to amuse themselves. I've been guilty of that. Working with my restaurant industry customers, I've acquired a great deal of respect for the straight-forward "simple" business models that don't involve much high-tech or brainy convolution---you make a product or provide a service that people want and you sell it to them, then repeat.



I remember the first time I learned that Dairy Queen stores compete on how quickly they can make their first million in annual revenues and then go up the ladder from there. It was humbling. A million bucks is a million bucks and my fancy WiFi company was a long ways from there. Maybe I should be selling Blizzards instead. At the very least, I've finally learned to focus on the money and not the gee-whiz technology and coolness factor. The question I always ask myself now is, "Would a customer want to buy this?" as opposed to "Wouldn't it be cool if we made this?" I hope that this dose of pragmatism doesn't prevent me from inventing the next Twitter some day, because an idea like Twitter definitely wouldn't pass my new litmus test for a business. That's sad, I guess. Maybe after I get out of the trenches, I'll get all starry-eyed again.





What is the next step for you and your startup?



We're in the process beefing up our advisory board with telco and food industry execs to more effectively court multi-unit franchise and national retail customers as well as prepare ourselves for partnering, licensing, and acquisition opportunities with broadband infrastructure providers such as such as phone and cable companies. Already, we've had several exciting conversations along these lines, but who knows, maybe our exit will be to another kind of buyer like a Chinese social networking company or a newspaper company looking for a new way to distribute their content.



What advice do you have for entrepreneurs?



Specifically to Austin high-tech entrepreneurs, get on a plane and fly to SF/Silicon Valley every month. Sure, we live in a great city with a great quality of life, but we're working at a tremendous disadvantage. It's like being a "mid-major" college football team. Even if you've got a great product, you're playing in a weak conference. I hate to say it, but I've learned that it's true. In SF/Silicon Valley, Austin just doesn't even register in the high-tech scene. We're in the backwater out here. The only Austin company they can think of is Dell. Telling them you have a company in Austin does not impress them, it makes them question your credibility. That's pretty infuriating because so many bad business ideas get attention and funding out there simply because they're out there. So, take some of the money you're saving on rent and mortgage, and spend it on a $300 plane trip to the Bay Area every month and start networking over there. Don't even tell them you're from Austin. Say your development team is in Austin, if you have to. Create a virtual office over there and have a California business card. Think of it as a standard business expense for all Austin high-tech companies of any size. Our biggest biz dev lead for 2009 came out of this strategy and it would have never happened otherwise. Then, come home, put on your shorts and sandals, pop open a Shiner, have some chips and salsa and be grateful that you don't have to live in the Bay everyday. This is a great place to live in, but not build a high-tech company. That's not something that many people here want to hear and I'm a bigger booster than most.



There are a lot of things that would have to change like the whole attitude of the entire local investment community from angels to VCs. But even then, we're simply lacking the critical mass of nearly everybody you need to meet and partner with to succeed is over there. It's crucial to be a part of the conversation, so that someone who can make a difference becomes aware of you. It's very similar to LA and actors. Anyway, once you get over the sting of this reality, let me know and I'll help you meet and network with the Austin diaspora that regularly travels to CA. We trade Bay Area tips and advice, talk about Austin, and even share living and working spaces while we're out there. It makes traveling so much easier and more fun when you keep a foot in your home community.





What Austin-based resource have you found to be the most helpful and why?



I benefit greatly from the advice and mentoring from the Austin Technology Incubator as well as the email list from Bootstrap-Austin. But perhaps the most helpful resource is the collective experience and talent of my Austin-based team members. It's tempting to "ask the experts," and it's awfully easy to overlook the in-house expertise you already have. We've built an award-winning venture together and I'm looking forward to finally solving the puzzle for making money with free WiFi.



Best regards,

Hall T.