20 VC 017 BETAWORKS WEEK Kuan Huang, Founder @ Poncho

In the latest installment of "20 minutes vc," host interviews Kwan Huang, founder of Poncho—a quirky, personality-driven weather service. Previously a hacker at Betaworks and engineer at Hatch Labs, Kwan shares his entrepreneurial journey, from an app that failed to monetize despite popularity to the creation of Poncho, which was incubated at Betaworks. He highlights the importance of focusing on a niche market and user engagement. Kwan credits Betaworks for playing a co-founder role by assisting with product development and operational challenges. He envisions Poncho's monetization through personalized commerce and advertising, leveraging data on users' routines. Kwan emphasizes the hacker mindset for success at Betaworks and advises non-technical founders to build a prototype to attract investment or technical co-founders.

• Betaworks is a successful startup studio with investments in BuzzFeed, Medium, and Tumblr.
• Poncho is an internally built startup at Betaworks, founded by Kwan Huang.
• Kwan Huang was a hacker in residence at Betaworks and an engineer at Hatch Labs before creating Poncho.
• Poncho is described as a simpler weather service with a personality.

"You're listening to the 20 minutes vc and the third and final installment of our feature of one of the world's most successful startup studios, Betaworks, who have invested in the likes of BuzzFeed, Medium and Tumblr."

This quote introduces the podcast episode's focus on Betaworks and highlights its successful investments.

"And for today's very special episode of Founders Friday, we can meet one of Betaworks current internally built startups in the form of Kwan Huang, the founder of Poncho, a simpler weather service with a personality delivered to you every day."

This quote introduces Kwan Huang and his startup Poncho, emphasizing its unique approach to delivering weather services.

• Kwan Huang entered the startup world around 2008-2009.
• His first project was an iOS app for bird identification funded by the MacArthur Foundation.
• Despite the app's success, Huang and his partner struggled with monetization.
• He later joined Hatch Labs, an incubator founded by IAC, as the first hired engineer.
• At Hatch Labs, Huang built a mobile app simulating casino experiences with cash rewards.

"My friend and I, the first project we worked on was an iOS app that helped people to identify birds in the field. We received the money from MacArthur foundation."

This quote details Kwan Huang's early entrepreneurial efforts and support from the MacArthur Foundation.

"I joined Hatch Labs. Hatch Lab was an incubator founded by IAC."

Kwan Huang describes his transition to Hatch Labs, providing context for the incubator's relationship with IAC.

• Kwan Huang was involved in recruiting, building businesses, and conducting due diligence for startups at Hatch Labs.
• He co-founded a company that developed a mobile app for a casino experience with a video ad-based monetization model.
• The company was eventually sold back to IAC.

"I was the first hired engineer, so I helped them recruit and build business. And also doing some due diligence for certain startups."

This quote explains Huang's multifaceted role at Hatch Labs, which included recruitment, business development, and due diligence.

"And we built a mobile app that simulates casino experience."

Kwan Huang talks about one of the ventures he developed at Hatch Labs, focusing on the gaming industry.

• Kwan Huang joined Betaworks as a hacker in residence in 2013.
• He and other hackers in residence were given 3-5 months to build a company at Betaworks.
• Huang worked on Poncho for about two and a half months before launching it.
• Poncho has been in operation for approximately two years at the time of the interview.

"I joined the Betaworks as one of hackers in residence."

Kwan Huang discusses his move to Betaworks, where he had the opportunity to build a new company.

"So I worked on Poncho, and then it took me like two and a half months working with somebody at Betaworks, built it and launched it."

This quote describes the process of creating Poncho within the Betaworks startup studio.

• Kwan Huang was initially uninterested in the weather space.
• He was inspired to explore the weather market after meeting a Betaworks partner interested in the field.
• Huang recognized a gap in the market for a weather service with a unique approach.

"I was not interested in weather at all. Although there were, like, hundreds of weather apps out there, I was still using the default iOS weather app, because for me, I just thought weather is super boring."

Kwan Huang shares his initial disinterest in the weather market, setting the stage for what led him to create Poncho.

"So Sam is a really interesting weather space. And we look at the market cap, like, how big the market is, how many people are using weather channel..."

This incomplete quote indicates that a conversation with a partner at Betaworks sparked Kwan Huang's interest in the weather market, leading to the creation of Poncho.

• The weather market is large, but innovation has been lacking.
• Traditional weather services like weather.com were not user-friendly or intuitive.
• Users often couldn't easily find the weather information they were seeking.

"People go to, like, back then, people go to weather.com, and they're looking for weather. The first thing they said was, where the heck is weather?"

The quote highlights the problem with existing weather services, which were not providing weather information in an accessible or user-friendly manner.

• Kwan Huang identified a personal problem: forgetting to check the weather.
• Recalled how his mother provided weather updates based on his schedule and needs during college in China.
• This personal experience inspired the idea of a proactive and personalized weather service.

"So that's sort of the inspiration. So I was thinking, maybe the future of weather service is a weather service you never need to check. The weather comes to you when you need it."

The quote explains the foundational idea behind Kwan Huang's approach to a new weather service concept, emphasizing convenience and personalization.

• Poncho iterated over two years to refine its service.
• It understands users' daily routines and provides weather forecasts accordingly.
• The service aims to make weather information engaging by adding personality, akin to a weatherman on TV.
• Poncho also includes transit updates, recognizing the chaotic nature of systems like New York City's subway.

"First, it understands your daily routine, so it understands when you wake up, when you leave work. So we send the weather forecast to you instead of you. Try to remember when to check weather."

This quote describes how Poncho's service is tailored to individual routines, sending forecasts at relevant times rather than requiring users to seek out information.

• Kwan Huang's core objective is for Poncho to become part of users' daily routines.
• Weather and transit updates are not checked frequently, so timing the information delivery is crucial.
• Understanding and integrating into users' daily routines is key to retention.

"That's the two moments you actually check these information. For most people, it's not like Facebook Tinder. You check in a way have like five minutes."

The quote emphasizes the unique nature of weather and transit services in comparison to social media, highlighting the importance of delivering information at the start and end of the day.

• Poncho started by targeting a small, tech-savvy niche market within the Betaworks community.
• They then expanded to New York City, accommodating its unpredictable weather patterns.
• The service was gradually rolled out to more regions, now covering around 60% of the U.S. population in 15 states.
• Weather feels very local, so forecasts are customized for different regions.

"So we definitely start with a very small niche market and expand. Then we learn, and weather is a very special thing. It feels very local."

This quote explains the strategic approach to market testing and expansion, starting with a small niche and scaling up while recognizing the local nature of weather.

• Betaworks is seen as a co-founder, not just an investor, in Poncho.
• They are deeply involved in product development and operational support.
• Betaworks handles HR, payroll, finance, and legal matters for Poncho.
• They provide guidance on market strategy and building the product.
• Their network is experienced in nurturing early-stage companies through common problems.

So I consider Betaworks as not only just an investor, but also a co founder. So they're really involved in product development.

This quote emphasizes Betaworks' integral role in Poncho's development, highlighting their involvement beyond financial investment to include product development and operational support.

• Key problems include rapid market entry and focus on critical areas.
• Importance of concentrating on a few simple key metrics for growth.
• Challenges in scaling both the product and the organization as the team grows.

How do you get the product to market as fast as you can? How do you only focus on one or two things that really matters?

The quote addresses the importance of speed to market and prioritizing the most impactful aspects of the product for early-stage companies.

• Betaworks has expertise in scaling products and organizations.
• They provide experience-based knowledge to navigate the growth from a small to a larger team.

How do you scale not only just scale product, but also how do you scale an organization, you will face lots of common challenges and the beta works have lots of expertise in that.

Kwan Huang identifies Betaworks' proficiency in scaling both the product and the company structure, which is crucial for early-stage startups facing growth challenges.

• Embracing a hacker's mindset is essential.
• It's important to accept that not everything will be perfect initially.
• Focus should be on identifying and catering to a key audience.

You need to have this hacker's mind. You know you will not be able to get everything right.

Kwan Huang stresses the need for adaptability and a problem-solving attitude, which are critical in the early stages of a startup.

• Focus on engagement metrics like daily and weekly active users.
• Analyzing retention to assess the product's stickiness.
• Once engagement and retention are understood, the focus shifts to growth.

When you launch something the first month, what you really focus on is the engagement.

This quote highlights the importance of monitoring user engagement to determine the success and potential longevity of a new product.

• Betaworks has various investment models for different companies.
• Poncho emerged from Betaworks' "hackers in residence" opportunity.
• Betaworks takes a significant equity share and is heavily involved in operations.

They basically invest, take equity of the company, bigger share of the company and the team and me, we all get equity of the company.

Kwan Huang explains the investment arrangement with Betaworks, emphasizing their substantial equity stake and active involvement.

• Scaling from one city to multiple regions with limited resources was a challenge.
• Poncho uses human editors for forecasts, which complicates scaling.
• Technology developed with Betaworks' data scientists helped group locations with similar weather patterns for efficient editorial work.

How can I do that without hiring a thousand editors?

Kwan Huang discusses the logistical challenges Poncho faced in scaling up and how technology facilitated a more efficient expansion process.

• The transcript ends abruptly without providing details on Poncho's monetization strategy.

So for us, I thi

This incomplete quote indicates that the conversation was about to shift to Poncho's monetization strategies, but no further information is provided in the transcript.

• Monetization is not the current focus; understanding user routines is key.
• Tailoring offers to users based on their daily routines and needs.
• Potential monetization through a blend of commerce and advertising.
• Utilizing data to provide specific recommendations and services.

"But I think potentially first we understand. That's why. One of the reasons I really want to understand people's daily routine is that we can offer you something that's truly tailored to a user."

The quote emphasizes the importance of understanding user behavior to offer personalized services and products.

• Importance of having a hacker's mindset for founders.
• Being able to act quickly and efficiently is crucial for success.

"The number one thing I would highly recommend is you need to be a hacker, like hacker's mind how to get things done fast and get things out fast."

This quote advises founders to adopt a proactive and resourceful approach to their work, which is valued at Betaworks.

• Non-technical founders do not necessarily need to become coding experts.
• Learning enough to build a prototype is sufficient to demonstrate a concept.
• A prototype can be used to attract investors or technical co-founders.

"All you really need is, can I learn enough technical stuff to help me to build a prototype? A prototype that's good enough to prove my concept?"

The quote suggests that a basic technical understanding is enough to create a prototype, which is a vital step in the development process for non-technical founders.

• Prefers reading articles on Medium and using Instapaper.
• Values the weekly digest from Instapaper for personalized article recommendations.

"My favorite thing is their weekly digest. They basically recommend articles I should read based on what I used to read or what I saved in the Insta paper."

This quote highlights Kwan Huang's preference for curated content that aligns with his interests, particularly in technology and investment.

• Elon Musk and Steve Jobs are mentioned as examples of successful founders.
• Media attention and innovation are associated with their success.

"But I think lately, Elon Musk, that's what this person been talking about in the media a lot. Steve Jobs, I guess."

The quote reflects Kwan Huang's view on who stands out in the conversation about successful entrepreneurship.

• Coffee and whiskey are mentioned as impactful purchases.
• These items contribute to daily life satisfaction and personal enjoyment.

"Well, I think it's coffee and whiskey."

The quote shares a personal preference, indicating that even small, everyday purchases can have a significant impact on one's life.

• A typical day involves managing various tasks and addressing issues.
• The work is dynamic and can include dealing with press releases and technical problems.

"Most day they are like roller coasters. You jump in between things and things."

This quote describes the fast-paced and varied nature of working at Betaworks, where no two days are the same.

• Creating Poncho is considered a career highlight for Kwan Huang.
• Poncho appears to be a significant project or product.

"Guess. Poncho."

The quote indicates that Poncho is a noteworthy achievement in Kwan Huang's career.

• Launching an iOS app and expanding coverage are immediate goals.
• Long-term plans beyond the next year are uncertain.

"For next year, I can tell you, is that we will launch our iOS app in a month and we want to cover the entire country in a couple of months and then hopefully we expand beyond the United States."

The quote outlines the short-term objectives for Poncho, with a focus on product launch and market expansion.

• Startups often neglect legal matters due to cost concerns.
• Vidar Law offers fixed fees to make quality legal services accessible.
• Encouragement to contact Vidar Law for tailored legal solutions.

"Well, Vidar law believed that concerns around fees should never keep you from hiring a top quality attorney for your business."

This quote stresses the importance of not letting financial worries prevent startups from obtaining necessary legal assistance and highlights Vidar Law's approach to fee structure.