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Riley Gibson is the Co-Founder and CEO of Napkin Labs. Riley graduated Summa-Cum Laude from Babson College in Business Management with a focus on Entrepreneurship. He also received the Entrepreneurial Excellence Award for his bachelor’s thesis. Riley has worked for startups and larger companies including Nau (startup) and Intel. Riley also worked at Sterling-Rice Group which is where he came up with the idea for Napkin Labs in cooperation with his other Co-Founder, Warren Ng.
Napkin Labs is a crowdsourced market research and new product development platform. Napkin Labs flips the existing paradigm in crowdsourcing ideas: it should be collaborative, not competitive. The goal of Napkin Labs is for people to work together to bring the best results for companies looking to innovate. Individuals all contribute to a project and earn points; when the project is complete, everyone earns money based off the amount of points they earned relative to the total reward amount.
You’re still in private beta, what are the biggest things standing between private beta and launching to the public?
For us, this is a bit like building a race car. You can spend years designing and building the car, but it takes a few months out on the track adjusting, tuning, and tweaking to really reach its true potential.
Our beta is working out great, but we do have more things to tune, tweak, and test in order to find the optimal balance between chaos and process in our online innovation environment. Part of me wants to never come out of beta. Beta gives you certain creative latitude to experiment and I always fear people will think the product is ‘done’ when we come out of beta. The truth is that this platform will never be done changing, improving, developing.
Can you tell us about some of the successful projects that have gone through Napkin Labs already? How about unsuccessful ones? What is generally the deliverable at the end of a project? Where do you find these projects and the people to work on them?
We have had a number of successful projects, but there is always room to improve. One interesting case study was one of our very first projects on ‘enriching the sound experience.’ Working on speaker systems and music interfaces really brought out the power of a global, collaborative community. We had MD/PhD’s talking about how the brain interprets and responds to sound, industrial designers looking at Cymatics and the visualization of sound to help enrich the sensorial experience, biologists bringing ideas from nature, and so on. The mix of expertise and diversity of perspectives really shined through and we were able to create a series of concepts out of those insights and ideas that really takes speakers to a different level.
Generally speaking, our deliverable is a library of consumer narratives and a wide range of new product or service concepts. We provide a synthesis of consumer narratives as well as visuals that illustrate the evolution of ideas from a consumer need to a market-viable solution and design. Of course, in our model, all of this collaboration happens online and is recorded and can be presented in a number of different ways. In the end, we are packaging information in ways that make it meaningful, valuable and actionable to the companies we work with.
You and Warren Ng slowly came up with this idea while working at Sterling-Rice Group. Could you tell us about the process about how you came up with the idea? How did you formulate, test and take the leap to actually start it?
It was a great mixture of long-term frustration, opportunity, and a few epiphanies thrown in. Warren and I would constantly talk about how the innovation process breaks down in many large companies and how many of the tools that marketers use (focus groups, etc.) are a part of the problem. Ideas are often created and tested in a series of silos, which are slow, costly, and inevitably incremental. We always would say to each other, “Can you imagine if we could get hundreds of engineers, designers, consumers, doctors, artists etc. from all over the world in a room together. It would be magic.” Unfortunately, there are so many physical barriers to making this happen; but luckily, we were both very involved with the innovations in online collaboration and social media. It seemed like a no-brainer to create a platform that could connect people from anywhere in the world and enable them to collaborate to create breakthrough products and services for companies.
You raised 200k seed funding and are looking to raise a Series A of 1.1 million and projected break-even in about a year’s time. How did the funding round go? This was your first time raising money if I am not mistaken, what did you learn about fundraising? Any tips for other first time entrepreneurs raising a round? Has Napkin Labs met your projections?
The fundraising process is still going on and it is distracting to say the least. To be honest, I think the traditional routes to funding are a bit behind. Entrepreneurs have incredible tools to bootstrap a business and get a product in front of people cheaply to learn from and iterate on quickly. We believe in this bootstrapped, agile development methodology, but we have found ourselves in this weird place between angel and VC money, making it difficult to raise capital from either party. I think models like Techstars are an incredible way to go.
My advice would be to ask only for what you need to build your product and customer base to the next level and leave plenty of room for the costs it will take to scale customer acquisition. Also, we have been lucky enough to fund a lot of our business through paying customers and partners, which is amazing. It is easier money to get into the door and it means we are building our product in a live customer environment, which helps us focus and hone our offering with live feedback.
I am amazed to see yet another Babson graduate (I think you’re my 3rd or 4th out of ~35 total). What did you think of your education? In my (tiny) sample, Babson looks like it’s generating some real entrepreneurs, why do you think that is? Are entrepreneurs attracted to Babson or does Babson create good entrepreneurs?
Haha – Babson is one of a kind. It is one of the few colleges that is more focused on teaching a way of thinking and solving problems, rather than just teaching things out of a textbook. The first thing you do at Babson is start a business with 30 other students. We learned by doing and failing, not by reading. I think that is one of the amazing things about Babson, you learn that failure is a natural part of the entrepreneurial process.
I find a lot of entrepreneurship programs to be comical. They are so academic and try and give students a playbook for how to build a company. The grand truth is that every company is different and what worked for one, will not work for the other. Babson didn’t give me a set of instructions, but rather a toolbox to draw upon as different challenges and opportunities arise.
You are based out of Boulder, Colorado and have said it has an “unparalled startup community.” I will admit I have personally been considering a move there and have only heard wonderful things from friends, family and strangers who either live in or visit Boulder. What makes Boulder so special? What are the best reasons to move a startup there? What are the downsides?
Boulder is truly a renaissance community. We have artists, researchers, passionate tech people, designers, and entrepreneurs all within walking distance. That diversity and the genuine sense of community is so incredibly unique and inspiring. Everyone is willing to help you for no other reason than to see you (and Boulder) succeed. I spent the better part of a year in Florence, Italy in college, and Boulder is what I imagine Florence was like back in the 16th century, just full of creativity and passionate people doing cool stuff.
Boulder is also a funny (and awesome) place because our version of celebrities are successful entrepreneurs doing cool things. Walking down Pearl Street you may walk by Brad Feld or Andrew Hyde or the team who designed the Red Laser iPhone app. It is awesome that these individuals are the heroes of Boulder.
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