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Jason Calacanis hosts This Week in Startups with guest Rahul Sonnad, Founder and CEO of Geodelic

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00:06:00 Ask Jason – Ken Kowal – eRoutingGuide – I am having trouble finding my target community (manufacturers), how do I find them?

Answer: You basically are looking for lead generation, create content around the subject and brand it well and make it memorable, write about services they use. Search Engine Marketing (SEM) is a good approach companies like Trada offer a compelling service. Writing a whitepaper that can be mailed out in a handwritten envelop is an option, it can be pricey but if it leads to a couple customers and your return is high that is an option. Create a really good landing page like 37signals they are good at getting information. Be creative and do something like Grasshopper and the chocolate grasshoppers they sent. The freemium / tiered model like Freshbooks maybe an approach, consider giving away the service for 6 months and ask for reviews. Be creative and they analyze the results.

00:19:30 Behind the Startup – is a new segment where we will follow Jason’s Angel investment in StorkBrokers and look into the initial process of investing, marketing, web design to launch.

StorkBrokers is an online marketplace for parents to sell kids old toys, clothes, books, cribs, bassinets and other stuff.

In this first segment we hear from Sterling Hawkins, StorkBrokers, Founder and Joey Tran of Fortis General Counsel, where they discuss the initial Angel Investment.

Key issues for Jason:

Company Structure – LLC vs C-Corp. – StorkBrokers was originally started as an LLC which isn’t always best when seeking funding in the beginning it works well for tax purposes but they will convert to a Deleware C-Corp. The reason for Delaware is the state is easy to work with and the laws are predictable. Which brings up the issue of existing investors and valuation and how Jason’s investment is integrated.

Intellectual Property – who owns the code? Domain name? Does someone own a small part of the company that may later come back to haunt you? (Anyone ever heard of Facebook?)

Protections – Occurrence of Debt. (basically put an investor wants to be protected so his value isn’t diluted), No one can amend the charter, nor liquidate or increase the number of shares.

Key Issues for Sterling:

What does the investor bring to the table? The value has to be key to the companies growth in order to sell the investor to the other investors.

Different valuation between parties and how much control each investor will have is a balancing act.

The entire process to bring on an Angel Investor to restructure the company and establish the new structure is approx. $10,000

00:41:30 The initial approach will be to bring on a couple more equity partners to bring their expertise instead of paying for their services: PR/SM Firm, Design Firm and Legal

Provides fully hosted / managed Microsoft Exchange and Google Apps e-mail

00:49:00 The Interview with Rahul Sonnad – His first startup was in 1998-99 he was an MP3 fan and wanted to build basically Rhapsody which was an odd concept at the time. He was working at Microsoft and they didn’t want to do it. So he raised some money and paid for so research and immediately got out of the music business and went into hosted video and sold to Comcast in 2006.

00:55:00 2006 was a very good time for an exit but how do you reconcile selling when you decided to sell and do you think about your timing? You think about it a lot but you really don’t know, it’s a personal answer you have to ask yourself if your still interested in the business, have you done due diligence for your investors, are you fully vested in the company.

00:58:00 Once you’ve raised money it’s tough to get more valuation, it’s easier to build another business

01:00:00 So you worked for Comcast how long did you stay? 18 months +1 day, you basically have earn out clauses and you need to transition it into a new company.

01:01:30 How did you come up with the idea for Geodelic? I was fascinated with GPS location services but I was waiting for the right platform. Being best to market isn’t always the right approach but once the iPhone was launch the timing was right.

01:05:00 Will the iPad be the next big thing? The iPad is an element of mobile but HTML5 will be the next big thing that allows you to launch one product it will eventually replace the App. Right now apps are snappier but in time their will be change

01:08:00 What is the premise behind Geodelic? Like back in the day evryone was saying you need a website but in the mobile space you will need an app that is optimized for where you are. So if I walk into a hotel the Geodelic knows where you are and opens up information about that company and it gives them a way to engage people who are at there place of business, the beauty is it’s passive the GPS tells where you are. Our goal is to give companies the toolset to engage people and create their own content.

01:14:00 You have some amazing content right now are you going to create all the data? No we started down the content road but we license the app and enable companies and power users to create the content which is their content that they can take where they choose. We started with content, moved to social networks and game mechanics and will move to financial incentives.

01:18:30 Who owns peoples location data? Apple basically set the standard, you are notified and choose to opt-in or out.

01:19:00 Should this data be anonymous? Yes but from an app maker perspective we are inudated with too much data to really watch anything. However, if someone wanted to create something bad they could as long as the app was running.

01:21:30 How accurate is GPS? Will it get better? 15-30 feet right now but with multiple sources including land based towers it will get better.

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