Founder Interview
Disclosure: AngelLoop, the startup to investor communications platform, has previously sponsored Hacker Noon.
David: How did you end up saying, “I need to work for myself”?
Igor Feerer: I’m one of those stories about immigrants coming to this country and seeing the opportunity. My father actually originally got me started on this entrepreneurial path because when he came here — he was driving around in a taxi until finally he figured out how to start his own business. At which point, this was a major shift in our family, and he really encouraged me to do the same and go the same path.
So, in college, I took up a partner and we started looking at opportunities, call it a search fund, in other words, we had some money and we wanted to start a little business. One thing that kept coming up was around the legal sector. I think it’s because I was in legal studies at the time, but nonetheless, we wanted to do something with the legal sector. The first idea we had was the first idea we executed on, which was process serving. That means we were hunting down, calling dead beat dads, serving subpoenas, working with a whole bunch of attorneys, doing stakeouts. And the interesting thing about that is it’s not just doing the stakeouts, I mean, on the operational side of the business we had to grow our team, grow our contractors, the people that would serve the subpoenas and eventually, it grew to about $500,000 a month of recurring revenue.
I saw that it was becoming a lifestyle business, so I decided to sell my portion of it to my then co-founder.
How did that conversation go?
Funny enough, his name is also Igor. I just said, “Igor, I’m ready. I wanted to move on and get into another business.” I was also starting to pursue my finance masters, and I was really fascinated by numbers. So, I wanted to look elsewhere. At that time also, the whole mortgage boom was taking place, so he understood. He was more than capable of running it and we negotiated on a really good price and I was out.
It’s good to have a good business partners that can understand where you’re at in terms of your different interests as the business grows. And so, how did you decide what business to pursue next?
Actually, I didn’t decide, it was something that found me.
Again, the mortgage thing was kind of booming. All my buddies were making a killing. Unfortunately, the money that they were making they were spending as well, almost immediately after they got it. So, that in itself is an ironic thing we can discuss another time. But I really liked working in real estate and I got into a lender shortly after I sold my part of the business to my founder. I was working as an account executive. We were the conduit between a bank and the borrower.
I started doing really well. Shortly after, I joined a mortgage brokerage firm. These are the guys that would actually sell mortgages to the consumer directly, and again, kept doing well. At the time, mortgage was really booming. Everybody had a house, everybody had a loan, everybody wanted to re-fi, and then capture that appreciation. But I surely got out of that because well, you know why. It was kind of a devastating thing. The unfortunate thing is…
Just to let people know, that was right around the real estate bubble, 2007, 2008, and that’s what Igor is talking about here of the real estate market.
Sure. But there was definitely takeaways. When I was at the mortgage company, you’re basically an independent contractor, so you grow your own book of business and you try to scale that business. And so on the operational side, on the sales side, it was all me.
That gave me a better understanding of my own managerial skills, because instead of just managing people, you’re managing yourself, and in some cases, that could be the hardest thing you could do.
So, I realized right away that I’m more than capable of doing that. It just added to my experience
And what specific learning do you have about how to manage yourself that you think could apply to other entrepreneurs?
Well, the biggest thing is I wasn’t really ever goal-oriented. I mean, I kind of figured I was on the right path, but in order for me to really succeed was just more around refining my process — how I did things, how I went about doing those things. And there’s a lot of people talking about, you got to set goals, you got to get that motivation. I mean, really, we all inherently have all that kind of figured out, we just need to figure out how to better that approach.
Take for example my approach to sales. You have to have several touch points with clients, and back then, email was just kind of … I mean, it was there but nobody was really like into it. But I set up campaigns and I automated those campaigns, meaning, after I get the clients, I would contact that client every other day just to make them feel like I’m there, I care, I want to make sure this deal happens, I want to make sure you’re happy with it, and just overall, nurture that relationship until it gets to a point where we can actually close the deal.
Yeah, that makes a lot of sense. And early adopting on like how to get more touch points is definitely a valuable thing if you looked to close sales.
Sure.
And as this real estate business hit its end point, did you have any kind of like reflections with yourself and what you wanted to do with your life?
Yeah. Well, first of all, the mortgage industry it was kind of detrimental to a lot of people, but what I realized shortly after is that we’re all implicit and complicit.
You can point fingers, as mortgage brokers you can point fingers at the big banks, and they were partly responsible, but really, there was a lot to do with people’s interest in growing their own wealth.
When the mortgage bubble burst, I had several options. Everybody was getting fired left and right, so I definitely didn’t keep my job because there was just no opportunity, everything was kind of hitting the fan. But overall, I realized it’s a down market, it’s a really good time to invest. I wouldn’t call myself a contrarian, but I understood that a lot of these companies that are on the markets, they’re being devalued just because of the confidence people are having for the market altogether, so once confidence levels come back up, it’s definitely prime time to start collecting return on your investments.
So, I started investing in the market, buying up a bunch of bank stocks, looking at all the tech companies, and I’m happy to say that a lot of the return on my investments I used on my own wedding. I shouldn’t have… I should’ve bought a house with it, but in hindsight it was one of the most memorable events in my life, so it was well worth it.
Yeah. What’s the old saying, when there’s blood on the streets buy property?
Pretty much?
It’s a little dark, but …
It’s not man. I mean, you’re seeing it happen today, whenever Bitcoin or any of these crypto coins drop in price, you see more demand coming, and it’s leveling off at the moment, but otherwise, the same story. Contrarians really do well when markets are down just because other people are scared of getting into the market.
Yeah, it takes a lot of cajones and a little bit of patience to go against the market, but I mean, you’re not going to get rich going with the market.
No, not at all. I mean, I feel like if I invest in public markets right now, I’m coming in at the top. Who knows what’s going to happen, and I mean, who knows what’s going to happen next week, right?
Yeah. Let’s talk about a GreenLight Energy Solutions.
Sure.
How did you start that company? and I read something about how it would light trash on fire, and it comes out the other end as usable energy. Like how does that all work?
Yeah. GreenLight Energy Solutions was a collaboration between me and my pops. I always wanted to go into business with him.
By the way, just one thing I would say is, working with your family is extremely difficult, but nonetheless, we got a lot of stuff done.
Working with my dad on GreenLight Energy Solutions was definitely an experience, but ultimately, what we wanted to do is we wanted to solve the waste management problem. And so, right now you have several solutions, one of which is garbage gets sent over to a landfill and just left there. And that’s in developed countries. In non-developed countries, landfills are wherever the garbage driver is going to throw his trash at. So, there’s a lot of issues that needed to be resolved.
GreenLight Energy Solutions itself was a way to take the garbage and put it through what’s called the paralysis process and then extract the gas and use that gas to power engines, or in our case, alternators that would generate electricity. But when I say paralysis, what I mean is, your microwave is paralysis, right? So, we would basically throw garbage in microwave and then there are two end results: one is ash that could be collected and discarded, and the other is syngas. The syngas has all the right properties to power generators and generate electricity.
Around 2009 to 2011, we went out to Moscow, raised about … well, actually I can’t say… but we raised enough money to build their first pilot unit, get it tested, and then start working out the manufacturing and the sales pits. Well, like any business, it had an opportunity to succeed, it had an opportunity to fail, and it just kind of failed. But it didn’t just fail, it took us a while to realize that it’s not really going anywhere, and then we had to shut it down.
But the rationale for its failing wasn’t necessarily because we ran out of money or wasn’t necessarily because we didn’t have the right people, it’s just a matter of adoption, right? People are kind of stuck in their ways and so you had these big municipal solid waste companies, landfills, incinerators, they were just happy with the process they had and adopting a new technology would be extremely expensive, and especially that particular technology, because it was in its pilot days.
So, acquiring it would’ve been more expensive and then eventually, we would have been able to lower the price points, so it’s just we couldn’t get that far.
Yeah, inertia is a really powerful thing, even if it’ll better people, a lot of times they really do just want to keep doing what they’re doing.
It drove me crazy. It drove me crazy. My Dad likes to refer to these garbage people as Mafia, and while they’re not — or maybe they are — it showed us that it’s a really hard industry to break into, even if you had a shining gold pile of money. But in any case, it taught me a lot of stuff. I got to know what big businesses are doing, I got to talk to their corporate doves, understand what it is that they’re looking for. And my primary role again, was in finance. I was managing the books, I was doing all the forecasting, I was handling all the licensing deals, and it really gave me a better understanding or appreciation for not only managing a team but also how numbers can actually play a major role in the company success, which in this case, unfortunately it wasn’t successful, but that experience I still took with me.
And what do you mean how numbers play a role in success? Like approach the numbers, what type of detail do you mean there?
Well, I guess in GreenLight’s case I’m mostly referring to around the contractual, more of the contracts really. So, when we raised our round, what was the valuation? Was it X or was it Z? How much did we need? What were we going to allocate that money to? What are the most important elements of our finances that we needed to track? In our case it was obviously expenses specifically around acquiring the hardware. Then you got to break it down, each piece of hardware that we bought had its own depreciation value. So, yearly when you file for taxes, you got to consider that.
I mean, there’s all kinds of creative ways you can use numbers, but more importantly, they’re created for a reason because they help your business succeed. So, if you know how to use them, it’s definitely a plus. A lot of people are kind of afraid of numbers, afraid of looking at their bank accounts even. But it’s there, it shouldn’t be a hassle, it should just be something that is used as a tool to help your company succeed.
Absolutely. It sounds a lot like what AngelLoop is based on.
Igor Feerer: Primarily. It’s also based on nurturing your investor relationships. At GreenLight, we had about three investors that came in with a big chunk of money, at my venture shortly after that, TranscribeMe, we raised about six and a half million dollars from 60 investors. And that kind of lit a light bulb in my head. Making money is an incident or a consequence of having strong relationships.
And I didn’t realize it back when I first started TranscribeMe, but what ended up really driving my passion for investor relationships was the following: we brought onboard 60 investors. We took six and a half million from them, these folks obviously had an expectation for a return on their investments, and when I got that first check, I was like, “Holy crap, I got a check from a person that I literally knew for a month.” This was extremely impressive and this contrasts to my fundraising at GreenLight because that whole process took about a year to raise. But at TranscribeMe, we’d meet people, take in a check and do so time and time again until we had what we were looking for.
One thing that I realized right away is that these people have grown their wealth — and I’m talking about angel investors, VCs, accelerators, or whatever the case may be — these folks raised enough wealth to invest in risky ass companies like TranscribeMe, like AngelLoop, like whatever company you’re running today, these people are allocating a certain percentage of their wealth to invest in you knowing that there’s a high chance you’re going to go out of business. Well, making money is one of their, I guess, one of their points of interest, but the other thing is these folks want to stay in technology. They want to see what’s happening next and they want to really invest their time into helping your company succeed.
So, with the 60 investors, giving us six and a half million dollars, they had an expectation, and so did we. Between us and the board, we determined a plan that would help us scale our venture. One of the points of the plan was around getting 30 employees into the company in a matter of six months.
I always look at investors as a resource, and a lot of people do so as well, they don’t know how to correctly approach them as a resource.
And so what I did is just send them updates, I would get on the phone with a lot of them, I would get to know who they are, who’s in their network, what it is it that they can help with.
And so, when we sent out the call telling these folks that we needed to grow our team by 30 people, the help was overwhelming. I mean, it took me a week to reconcile through all the emails that I received, but overall, to help was in the form of helping us with putting together our role description, finding the different channels that we can market to prospective employees through, aside from just leveraging the industrious network, and participating in the interview process, identifying what key hire is going to sit where, or more importantly, how are they going to help us, the company scale. So, that was a really interesting thing I noticed at TranscribeMe, especially with the investors. But as a side note, one of the other interesting things that I saw from our investors was, when they would receive my updates, I would ask them for help, I would first let them know how we’re doing, but then I would also ask them for help in procuring customers for us. Again, these people have a vested interest in your success.
So, one of the things that they helped us with was land big deals, and it got to a point where I was closing more revenue than my VP of sales, and it’s all because I would send an email out asking them for intros to prospective customers, they would reciprocate, look through their network, and then make an intro, and then help me close the deal. This got TranscribeMe to about $1000,000 a month in recurring revenue within a two-year timeframe, which was pretty freaking awesome. And so I saw a lot of value in just talking to investors, getting to know people, nurturing those relationships, and letting them help us along the way.