20 VC 027 Greg Rogers on Techstars, Mentors and The Potential for Fintech



In episode 27 of the 20 minutes VC, host Harry Stebbings interviews Greg Rogers, Managing Director at Techstars, discussing his journey from entrepreneur to senior VP at AOL, and his role in the Barclays accelerator. Rogers shares insights from his experiences with startups like Dakota and Piktella, emphasizing the importance of mentorship, strategic problem-solving, and intellectual honesty in early-stage growth. He highlights the fintech sector's evolution, particularly in financial inclusion, and the potential for collaboration between startups and traditional banks. Rogers also touches on his involvement with Smartup, a platform preparing future entrepreneurs, and his passion for angel investing. Notably, Rogers spotlights three promising London-based fintech companies: Aire, Squirrel, and Dupay, each addressing unique challenges in financial services.

Summary Notes

Introduction to Greg Rogers and Techstars

  • Greg Rogers is the managing director at Techstars, a leading accelerator for early-stage tech startups.
  • He oversees the Barclays accelerator.
  • Greg's entrepreneurial background includes 11 years in New York City.
  • He was the founder and CEO of Pickteller, acquired by AOL in 2010.
  • Post-acquisition, Greg served as AOL's senior vice president of premium advertising until 2013.
  • Greg is now involved with a new venture called Smartup.

"Greg is currently managing director at Techstars, the world's leading accelerator program for early-stage technology startups, and is responsible for the Barclays accelerator."

This quote introduces Greg Rogers and his current role at Techstars, highlighting his responsibility for the Barclays accelerator and setting the stage for his expertise in the startup ecosystem.

Greg's Entrepreneurial Journey and Entry into Techstars

  • Greg caught the entrepreneurial bug early on, starting in advertising technology.
  • He was an early employee at Dakota, a company specializing in behavioral targeting.
  • Dakota experienced rapid growth and was sold to AOL Time Warner for $275 million.
  • The sale of Dakota was bittersweet for Greg, as he believed they sold too early.

"I started off as an entrepreneur, so I spent eleven years in New York City, and I really caught the entrepreneurial bug very early on."

This quote summarizes Greg's initial foray into entrepreneurship and sets the context for his extensive experience in the industry.

The Rapid Growth and Sale of Dakota

  • Dakota's growth was described as "logarithmic."
  • Greg experienced the rare alignment of product, market fit, culture, and technology at Dakota.
  • The CEO sold Dakota to AOL Time Warner just before the 2007 financial crash.
  • Greg felt the company sold too soon but acknowledges the sale propelled his entrepreneurial career.

"That company grew like gangbusters. It was just a phenomenal experience to be part of something that went logarithmic in its growth."

The quote captures the significant and rapid success of Dakota, emphasizing the exceptional growth Greg was part of.

Creation and Sale of Piktella

  • After Dakota, Greg co-founded Piktella, a rich media ad server company.
  • Piktella focused on serving high-definition video ads that did not require clicks.
  • Greg and his team raised venture capital and initially outsourced development before bringing it in-house.
  • Piktella was sold to AOL under new leadership seeking premium ad technology.

"And Piktella was a next-generation rich media ad server. And so this was the idea here, you know, now that we know how to target people effectively using services like Dakota, can we now build a platform that can serve really incredible ads."

This quote explains the concept behind Piktella, linking it to Greg's previous experience at Dakota and highlighting the company's innovative approach to advertising technology.

Greg's Perspective on Selling Companies

  • Selling Dakota was a difficult moment for Greg due to its strong performance.
  • The decision to sell was strategic, especially in light of the impending financial crisis.
  • Greg did not have the same regret when selling Piktella, as the offer from AOL was timely and compelling.

"And it was actually quite prescient on his part, because, of course, it was just before the crash of 2007 when the real estate market plummeted, of course."

This quote reflects on the timely decision to sell Dakota and the foresight involved, considering the economic downturn that followed.

Early Stages of Company Development and Acquisition Decision

  • Greg Rogers discusses the early development phase of his company and the acquisition decision-making process.
  • The company was still in its infancy, without significant revenue and company size, when approached for acquisition.
  • They performed a "back of the envelope" calculation to compare potential dilution from fundraising with the acquisition offer.

"By the time we sold, we were still very early. Right. It took us a year to build the platform, and then we were just starting to get into the market and begin selling it when they all came and approached us."

The quote explains that Greg's company was approached for acquisition early in its market entry phase, shortly after completing the development of their platform.

"And so not all the stars were in alignment yet. Right. We didn't have tens of million dollars in revenue yet. We didn't have a big company."

This quote emphasizes that the company had not yet reached significant milestones such as high revenue or company growth at the time of the acquisition offer.

"You look at the cap table when somebody comes to you and you say, okay, well, we're going to have to do another raise. And if we do another raise, we're going to dilute by this much, roughly."

Greg Rogers describes the process of evaluating the company's capitalization table and the potential dilution effects of raising more capital versus accepting an acquisition offer.

Career Transition and Move to London

  • Greg Rogers narrates his transition from running premium advertising at AWOL using his technology to moving to London after meeting his wife.
  • The move was influenced by a desire for change and the decision between Boston and London, with London being the more interesting choice.

"I wound up staying with AWOL for a couple of years. I ran premium advertising for them, using our technology as the underpinning to serving really premium ads for the company."

Greg explains his role at AWOL post-acquisition, highlighting his continued involvement with the company through running premium advertising.

"And after spending eleven years in New York, we both decided that it was time to move away. And we were deciding between either Boston, where I'm from, or London, where she's from, and I just thought London would be more interesting."

The quote illustrates the personal decision-making process that led to Greg Rogers' relocation to London, influenced by his and his wife's origins and the appeal of a new environment.

Introduction to Techstars London

  • Greg Rogers recounts his introduction to Techstars London through John Bradford, who recognized Greg's entrepreneurial experience as valuable for a fintech program.
  • Despite Greg's background in ad tech, John Bradford encouraged him to consider the role, highlighting the importance of entrepreneurial experience over industry expertise.

"John looks at me and he says, you know, greg, you look like a man with some time on his hands. And I said, well, yeah, I guess so. I just got here, so I figured I would look around and see what's going on."

John Bradford's observation about Greg's availability upon moving to London set the stage for introducing him to Techstars London.

"But first and foremost, techstars looks for entrepreneurs for their mds. He said, you can find industry experts all you want, but what's actually really hard to find are people who have gone through the VC races, been rejected multiple times, have built up the engineering team, have negotiated the sale of their own company."

This quote clarifies Techstars' preference for MDs with entrepreneurial experience, valuing the skills and credibility gained through the challenges of building and selling a company.

Fintech Industry Transformation

  • Greg Rogers discusses the evolution of the fintech industry, noting the shift from peer-to-peer focus to a broader disruption of financial services.
  • He observes the international influx of entrepreneurs to London and the city's emerging leadership in fintech disruption.

"We're now seeing, at least here in London, we're seeing entrepreneurs from all over the world move here to start their fintech companies. And the transformation that's happened is things are no longer focused on peer to peer."

Greg highlights the changing landscape of fintech in London, with a diverse range of entrepreneurs and a move away from narrow focus areas to a broader industry disruption.

"I would say London is certainly becoming a center of fintech. I don't like to use the word Silicon Valley. That's a very unique ecosystem and geography and community."

The quote expresses Greg's perspective on London's position in the fintech space, avoiding direct comparison with Silicon Valley but acknowledging London's significant role.

Financial Inclusion in Fintech

  • Greg Rogers expresses his excitement for financial inclusion in fintech, which aims to serve populations traditionally ignored by banks.
  • He draws a parallel between the opportunities he saw in ad tech 15 years ago and the current opportunities in fintech.

"The opportunity for fintech today is the same opportunity I saw in ad tech 15 years ago. It's just a blue ocean."

Greg compares the current fintech opportunities to the early days of ad tech, suggesting a vast, untapped market ready for innovation.

"This is the aspect of financial services in which there's a segment of people, whether here in the UK or in fact, most of the world, in which there's a group of people that don't have bank accounts."

The quote identifies financial inclusion as a key area of interest, focusing on providing financial services to those who are currently excluded from the traditional banking system.

Financial Inclusion and Opportunities

  • Financial inclusion is critical as a large percentage of the world's population lacks access to banking and financial services.
  • Providing banking services, loans, and financial services can change lives and is a significant market opportunity.
  • Traditional banks have overlooked this opportunity due to the high costs of serving individuals, especially in countries with lower average incomes.

"Because if you think that something like 80% of the world doesn't have a bank account, doesn't have access to financial services, you're talking about one of the largest opportunities out there that has just been ignored for the longest time."

This quote emphasizes the vast potential market for financial services among those currently underserved or unserved by traditional banking institutions.

Challenges of Traditional Banking

  • Traditional banking infrastructure is too expensive for serving low-income individuals.
  • In countries with lower average salaries, the cost of providing banking services on a case-by-case basis is not profitable.
  • Rethinking financial services is necessary to create affordable and accessible solutions for the unbanked.

"Banks that have branches, physical infrastructure, it's just very expensive to bank people."

Greg Rogers points out the high costs associated with traditional banking models, which make it unfeasible to serve people with lower incomes effectively.

Techstars and Barclays Partnership

  • The partnership is focused on fintech, which encompasses all technologies related to financial services, including cybersecurity.
  • Techstars is mentorship-driven, with about 80 mentors from various parts of the financial ecosystem, many of whom are experienced entrepreneurs.
  • The program runs for three months and selects ten companies to mentor.

"This program runs just like any other tech stars program. It's a three month mentorship driven program."

Greg Rogers describes the structure of the Techstars program, highlighting its duration and mentorship focus.

Mentorship in Techstars

  • Mentors in the Techstars program are mostly successful entrepreneurs who donate their time charitably.
  • The best mentors are those who are intellectually curious and honest, providing valuable insights and feedback.
  • Successful mentors often have a desire to give back and help the next generation of entrepreneurs.

"It's a charitable donation of time. I know this sounds... It's one of the things that boggled my mind the most when I first joined techstars."

Greg Rogers expresses his initial surprise at the willingness of successful individuals to mentor without compensation, reflecting the culture of giving back prevalent in the entrepreneurial community.

Characteristics of Effective Mentors

  • Effective mentors love solving puzzles and are excited by strategic challenges.
  • They provide intrinsic value by helping entrepreneurs navigate complex problems.
  • Intellectual honesty is crucial; mentors must be willing to reveal the flaws in a business to improve it.

"The best mentors are the ones that are intellectually curious... and perhaps even more important, or just as important, is people who are intellectually honest."

Greg Rogers highlights the importance of curiosity and honesty in mentors, which are essential for guiding entrepreneurs through their challenges.

Necessity of Mentorship for Startups

  • Mentorship is particularly crucial in the early stages of a startup when time and money are scarce.
  • Good mentors can help entrepreneurs avoid common mistakes and accelerate their strategic development.
  • The value of mentorship lies in preventing young companies from derailing during their formative periods.

"Yeah, I think mentors are most necessary in the early growth of companies."

Greg Rogers affirms the importance of mentorship for startups, especially in their early growth phases, due to the potential for significant impact on their trajectory.

Smartup Initiative

  • Smartup is created in conjunction with Founders Forum, involving influential entrepreneurs like Frank Mehan.
  • The platform aims to support aspiring entrepreneurs through mentoring, advice, and simulation experiences.
  • Smartup is designed to prepare individuals for entrepreneurship by allowing them to simulate various aspects of starting and running a business.

"So smartup is being built in conjunction with Founders Forum... The concept of smartup is really tapping into this nascent and growing, rapidly growing community of would be entrepreneurs."

Greg Rogers introduces Smartup, a platform designed to mentor and prepare future entrepreneurs through a simulated business environment, created in collaboration with the Founders Forum community.

Smartup: A Pre-Entrepreneurial Platform

  • Smartup is designed for individuals preparing to become entrepreneurs.
  • It provides knowledge and education to help future entrepreneurs get ready for launching their ventures.
  • The timing for Smartup's market entry is considered ideal due to the high interest in entrepreneurship.

Smartup is for people who are getting ready to be that entrepreneur. This quote explains Smartup's target audience—those who are on the cusp of starting their entrepreneurial journey and seeking to build their foundational knowledge.

Greg Rogers' Involvement and Future Plans

  • Greg Rogers is a founding investor in Smartup.
  • Frank, presumably associated with Smartup, approached Greg with the initial idea.
  • Greg is also involved with Techstars and has a passion for investing, which he plans to continue.
  • He sees himself still angel investing in five years, finding it gratifying.

I'm a founding investor. Greg Rogers confirms his role as an initial investor in Smartup, indicating his early support for the venture.

Entrepreneurial Guidance and Collaboration

  • Greg advises fintech entrepreneurs to consider collaborating with traditional banks.
  • He believes that banks can serve as valuable partners and distributors for fintech startups.
  • Banks are currently seeking innovation and are open to partnering with disruptive startups.

Don't be afraid to collaborate. Greg Rogers emphasizes the importance of collaboration between fintech entrepreneurs and traditional banks, suggesting that banks can be allies rather than adversaries.

Perspectives on Disruption

  • Disruption can be positive or negative depending on its goals and outcomes.
  • It can lead to the creation of valuable services, such as enabling financial inclusion.
  • However, it can also be challenging during transitional periods when people must learn new skills.
  • Ideally, disruption should create value for both investors and society.

Disruption in its best form creates a lot of value, not just for investors, but for society at large. Greg Rogers offers a nuanced view on disruption, highlighting its potential to generate significant societal benefits when applied thoughtfully.

Highlighted Companies from Barclays Accelerator and Techstars

  • Greg Rogers refrains from playing favorites but mentions three London-based companies.
  • Aire is working on alternative credit scoring for those without credit history.
  • Squirrel integrates with employer payroll systems to provide financial management tools.
  • Dupay offers payroll cards and a smartphone app for financial services in Egypt, a safer alternative to cash payments.

So there's a company that came out of my last cohort called Air Aire, and they are creating an alternative scoring methodology for people who don't typically have credit scores. This quote describes Aire's mission to address the credit score accessibility problem, which aligns with financial inclusion goals.

Conclusion and Additional Resources

  • Harry Stebbings thanks Greg Rogers for the insightful discussion.
  • Listeners are directed to the blog for further resources mentioned in the show.
  • Feedback and reviews on iTunes are encouraged.

Harry, it's been my sincere pleasure. Greg Rogers expresses his enjoyment of the conversation, concluding the podcast on a positive note.

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