“…for a business idea to be viable it must be original, have a measured audience, and be logistically feasible.”

Interview by Kevin Ohashi of Ohashi Media
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This Interview was made possible by our friends at

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Frank Koehl is the Founder of Fwd:Vault. Frank has worked for 15 years in IT, web development and other closely related areas.  He studied Information Technology and Philosophy at the University of Scranton.  He has been the Director of Technology for a couple of companies including ClassicWines.com and Destination ImagiNation, Inc.  Frank finally has begun pursuing his lifelong dream of his own startup company, Fwd:Vault.

Fwd:Vault is a backup service through email.  It allows users to backup their emails and files by emailing Fwd:Vault.  It’s really that simple.  The idea itself won Startup Nation 2009’s Elevator Pitch Contest.  In an age where technology is getting more and more complex, Fwd:Vault is getting back to basics and trying to break down any and all barriers to good backup policies for individuals and companies.

MO:
You built Fwd:Vault because you recognized a need from your personal experience.  What were the other ideas that you had and why did Fwd:Vault eventually win as the idea you’ve chosen to pursue?

Frank:
I’ve wanted to start and run my own business since I was about 12, and didn’t waste any time trying to come up with my million-dollar idea. By the time I was in college, I could grind through and evaluate a potential new business idea in a matter of moments. Needless to say, I’ve gone through a lot of ideas over the years. I go into my idea analysis process in more detail in the Fwd:Vault launch post I made on my blog. In a nutshell, for a business idea to be viable it must be original, have a measured audience, and be logistically feasible. Fwd:Vault easily cleared those hurdles, so I launched the business.

I still come up with fun and interesting ideas all the time. While most never get beyond a passing whim, I did pursue a few stronger ones…

• My father-in-law is a pharmacist and a successful businessman, building and running his own local pharmacy for many years. Between his experience dealing with the business of healthcare and my technical know-how, we bounced around ideas for an online patient records management system. We thought that two business-minded people who had dealt with the fallout of overregulated healthcare and insurance were better equipped to solve the portable patient records challenge than the big healthcare companies. We ended up dropping it for a number of reasons, but I firmly believe that a guy in his basement somewhere is going to put the efforts of large companies to shame.
• My wife, Jennifer, is a veterinarian, and while she was in vet school I learned that practice management software for vets – patient records, appointment schedules, prescriptions, employee hours tracking, etc. – was expensive and lacking in polished design and function. I thought a web-based product could do everything they needed for a fraction of the cost. I was spec’ing out the system before I found several existing players in the space were already well on their way.
• A friend and I considered an online prescription fulfillment service for vets, giving them a tool to compete with 1-800-PetMeds and the like. We went so far as to file incorporation papers before the economy started to turn and decided that a business requiring such large amounts of expensive stock was too big a gamble.

Here’s how I evaluated the opportunity with Fwd:Vault:

Original: Data backups are nothing new, but performing a backup without any requisite hardware or software on the user’s part is original. The flexibility and accessibility of the platform makes backing up possible for a whole host of niche scenarios that existing players ignore. For example, colleges and universities typically lock down the student portions of their networks to control bandwidth, and in the process can prohibit backup software from running. Fwd:Vault operates through email and the web, two points of access which are always open and available on any network, no matter how high the security. They are also available from any computer, so using the service is never tied down to a specific location.

Audience: The unique backup approach begs the question, “Who would use it?” But it was actually the audience that came first. I recognized a need for fast, easy, convenient data backups after years of experience dealing with end users. Some users are technologically savvy, but the majority of people treat their computer the same way they treat their car: “I just want it to work.” People understand that they should backup their important documents – just like they shouldn’t ignore the “Check Engine” light – but it’s still a chore. Fwd:Vault aims to make backing up less of a chore by working on comfortable, familiar ground: sending email and browsing the web.

Feasibility: Finally, I knew I could get off the ground on my own without incurring a major capital investment. I had all the technical knowledge necessary, and costs were low enough that I could absorb them myself without having to seek outside capital, a big plus in today’s economy. To date, Fwd:Vault has not accepted a dime of outside funding. When people ask me, I tell them that I’m not actively seeking capital, but I’m not refusing phone calls either.

Plus the whole concept just sounded fun to me. I found the idea of building a system that converts email into a backup tool interesting and challenging. When you’re going to dedicate a good portion of your life to building something, you have to enjoy the ride.

Once I knew I was on solid footing, it was easy to “take the plunge” and get started.

MO:
Your focus is simplicity and making it accessible to everyone.  How do you actually test and learn what people do and don’t understand?  How do you improve Fwd:Vault on a daily basis?

Frank:
Fwd:Vault is all about simplicity and access, so this is something we work on every day. When you build and run any kind of web service, user feedback is absolutely key. A single user can find more bugs, usability snags, and other problems in a single visit than you as the author could find with a week of dedicated review. Most developers fear and loathe dealing with customer support, however those phone calls and emails are a treasure trove of potential improvements, fixes, and new ideas.

This lesson was crystallized for me years ago when I was building a team registration and volunteer management system for Destination ImagiNation. I set up a test terminal outside event registration at our annual year-end event and solicited for volunteers from those in the waiting area. These were the same people who would be using the system when it went live next season, so they were also highly targeted. I had time for just 10 run-throughs, but walked away with more than four pages of bugs and design insights. That system is still in use today, and DI now offers Fwd:Vault services to their customers and volunteers.

The lesson still applies to our Fwd:Vault feedback. Support emails receive my personal attention, and serious consideration is given to any design improvements that might apply. I don’t have the budget for formal user testing, but there are ways to easily get the same effective feedback…

• Friends and family make fine testers: call or visit, catch up, and have them run through whatever you‘re working on.
• Whenever possible, have people use the system right in front of you. If I find myself near a computer with someone – anyone – willing to help me out, I’ll ask them to try something out.
• When doing a user test over the phone, be sure to do it right then and there, with you on the line. If you don’t, chances are the test will never get done, or the feedback will stink, i.e. “Yeah, it worked. Cool stuff!” Well intentioned, but worthless.
• Once you start testing, never stop. Even if you’ve tested something a million times, you never know what golden nugget of usability you might find. Plus that tester could become a new customer.

MO:
The biggest issue we see with startups is customers.  Who were your first 10 customers and how did you find them and convince them to start paying?

Frank:
My first users were friends and family. I suppose that may be a consequence to my user testing style, however I think the approach makes sense for a lot of startups and entrepreneurs. When your product is not established, the only thing you have to trade on is your reputation and that of your team. It is therefore much easier initially to make a sale to someone you already know and with whom you have permission to interact. Any startup not leveraging the proverbial rolodex is doing themselves a huge disservice and severely crippling their chances of success.

Your observation on the difficulty of finding customers comes as no surprise to me. Having the idea is easy. Initially building the idea is easy. Getting people to consider your idea more valuable than the money they pay for it is the true challenge of starting a business.

To convince them you have to talk to them, figure out what makes the product attractive to them, and then repeat that message to others. In other words, you need to work on your marketing. Lots of entrepreneurs groan at the very notion of marketing, but it’s absolutely necessary and, fortunately, pretty easy to get started.

Simply get out there and start talking to people about what you’re doing. Talk to friends, at parties, online, anywhere and everywhere. The other person may not represent your target audience, but the practice in succinctly describing your product lays the foundation for your marketing message. The right words usually appear after trying the wrong ones, so get out there and say something to someone.

You’ll find the verbiage that resonates with people before too long. For example, I found out through casual conversation that a lot of people like the idea that they can use Fwd:Vault to get documents on and off their iPhone or Blackberry when away from the docking station. So now we have a page on the site dedicated to describing this functionality and how to tap into that.

 

MO:
Did you read any of the startup literature (blogs, news sites, etc) or take advantage of any local resources for helping businesses get off the ground?  What was some of the best advice you received?  How about some of the worst?

Frank:
I read constantly. Most of my business education is sitting on the bookshelf behind me right now. I do read startup and business blogs from time to time, but I’ve found that books provide more useful lessons, I think because the content is heavily researched and polished. There’s lots of useful stuff out there both in print and online, but there are three required reading cornerstones: The E-Myth Revisited, Fire Someone Today, and The One-Minute Entrepreneur. Anyone can start and run their own business on the lessons contained just in those three books.

Because of the nature of my business and my skill sets, I never had a need to utilize services like those offered by my local Chamber of Commerce to get started. However, everyone needs networking. Entrepreneurs are in a difficult position when it comes to building relationships since they are typically small teams and largely work alone at the outset. Membership in a local CoC or other networking group can provide opportunities to meet potential partners and clients, talk shop with other entrepreneurs, or simply keep you from going insane working by yourself all the time. Most CoC’s have membership dues, so if you’re just looking to meet and network, you ought to check around for free groups first. Meetup.com is a great place to start.

The best advice I’ve found came from the three books I recommended (no surprise there, I suppose). Conversely, you’ll get the worst advice from people who simply “don’t get” what you’re doing. This typically happens when the would-be adviser doesn’t fit your target market and they can’t see or recognize the audience for whom your product would be tremendously beneficial.

The lousy advice you get in this scenario can cover anything, including…

• Advertising – “Local newspapers are an [excellent/terrible] fit for you.”
• Marketing – “College students are an [excellent/terrible] fit for you.”
• Staffing – “You should [hire/fire] the [account/designer/developer/lawyer].”
• Functionality – “Your widget absolutely [must/must not] have this feature.”
• End game – “I don’t see your idea ever gaining traction.” and/or “You’ll be net million within 6 weeks!

You need to be an expert in your business first in order to filter the good from the bad (and sometimes ridiculous). As a bonus, you’ll become better at recognizing when your own ideas are heading off the rails as well!

 

MO:
I noticed you’re based out of Philadelphia which isn’t that well known for its tech culture beyond DreamIt Ventures.  Can you tell us what it’s been like starting up in Philly?

Frank:
DreamIt is just the tip of the iceberg! While not necessarily famous for it yet, Philadelphia does have a booming startup landscape. I am part of a group called the Philly Startup Leaders, run by and for entrepreneurs. PSL hosts events throughout the year, and the member community has fantastic connections with local service providers and investors. If you need anything to build and run your business, someone on the email listserv has done it and can recommend a good provider, usually another local business. Through PSL, I had the opportunity to present Fwd:Vault in both expo and presentation formats, found and hired an awesome marketing consultant, and am currently in discussions with a large potential strategic business partner. Along the way I’ve met a ton of like-minded entrepreneurs who I am happy to call friends.

It costs nothing to join, you just have to work in the greater Philadelphia region. PSL and the Philly startup scene were recently the focus of a front page special in the Philadelphia Daily News. Fwd:Vault even got a writeup as part of it.

MO:
What’s next for Fwd:Vault?  What do you spend your day thinking about in terms of growing your company?  What sort of scaling issues have you run into and how have you dealt with them?

Frank:
Right now it’s all about growing the user base and attaining critical mass. I’ve had the most success by partnering with companies and groups who represent the ideal Fwd:Vault user. For example, one of our market segments is entrepreneurs building businesses in non-technical fields, like independent lawyers, real estate agents, and event planners. So we partnered with StartupNation to offer Fwd:Vault to their bootstrapping audience. I’m hoping to spring board off that success in the second half of this year to bring in more and larger partners.

Scaling issues to this point have been slim to none. Effecting that fortunate turn was one part planning and one part Amazon. Fwd:Vault uses an Amazon S3 repository to store files, which expands infinitely and handles our data backup and restore processes quickly. Our traffic and data storage needs have a long way to go before S3 becomes impractical.

One issue we quickly ran into was server performance. I started out with a tiny hosted server package to build and test, but the processing demands quickly necessitated something beefier. I rolled into a larger setup, which now handles the website and email processing and has held up well. I don’t expect a need to mess with IT infrastructure again for at least another year (famous last words). Having worked with elaborate network configurations before, my goal is to exhaust the potential performance of individual servers before moving into complex distributed setups. The vast majority of startups can do fine with a single sturdy server as long as it’s well-maintained.

Support requests are the other challenge I see on the horizon. Handling inquiries always has the potential of exploding and becoming a black hole for productivity hours, so I use that threat to drive development. I do everything possible to ensure that bugs or performance issues don’t creep into a release, and quickly fix anything that does pop up. Early warning systems – like external site monitors and email alerts for errors generated by the site – also help to head off potential trouble.