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Building an Artificial Intelligence Software Company from Dallas: Dave Copps, CEO of Brainspace (Part 2)

Sramana Mitra: What year was that?

Dave Copps: That must have been 1997 or 1998. I founded my first company in 1999. I literally found a scientist, and we started writing algorithms. We were using Matlab. It didn’t scale. We went down a few paths. We failed and start over, failed and start over, and failed and start over. Then we found an algorithm that started to do some learning. We were able to ingest, at that point, a couple of hundred or a few hundred documents and have the system learn from them and build it into a search engine. We built a semantic search engine basically. That company grew from about 1999 till about 2006 when we sold it to Marx McLennan.

Sramana Mitra: Did you bootstrap that company? >>>

Building an Artificial Intelligence Software Company from Dallas: Dave Copps, CEO of Brainspace (Part 1)

Artificial Intelligence startups are very hot these days. Read how Dave Copps has built Brainspace from Dallas.

Sramana Mitra: Let’s start with the very beginning of your story. Where are you from? Where were you born, raised, and in what kind of background?

Dave Copps: I was born and raised in Dallas, Texas. My dad was an eye surgeon. My parents had moved down from Wisconsin. They were snow birds, as they called themselves. My mom was a community leader. My dad was very smart. He graduated from college at 17. His dad had the same background. He went to the Navy while his friends were graduating.

My mom funded many fundraising efforts in Dallas. From an early stage, I learned a lot about the importance of education, culture, and giving back. I left for college to go to Westminster College in Missouri and came back to Dallas and finished at the University of North Texas. I’ve been in Dallas ever since. I always thought I’d be off in Europe somewhere. Dallas is a great city. It’s a great place to start a business. >>>

Women ARE Raising Venture Capital: Kerry Cooper, CEO of ChooseEnergy (Part 7)

Sramana Mitra: The point is that e-commerce would do well with more female investors evaluating the deal just because there is more informed perspective on how the customer behaves in that segment, especially in fashion and lifestyle brands.

Kerry Cooper: I sold men’s pants for six years. I’m very comfortable figuring out what it takes for a man to buy a pair of Dockers. I had a great boss. He was trained under Mickey Drexler who was one of the kings of merchandising. He said, “You can’t take about bras and panties without giggling when you’re not a good merchant.” If you can’t figure out how women buy, then shame on you. You don’t have to be a woman to know how women buy.

Sramana Mitra: True and not true, right? You have a job as a merchant. That’s your job eight hours a day. You have a huge amount of time to figure all these things out. If you’re a venture capitalist, you have to figure out all these things with a very small time window. Some people do have a gut instinct. There are very successful male VCs who have done very well in e-commerce including fashion e-commerce. Obviously, there are people who have been able to figure it out. Especially for VCs who come from deeply technical backgrounds like somebody whose core understanding is in how routers work, they may not have that gut instinct. You can’t hold that against them. >>>

Women ARE Raising Venture Capital: Kerry Cooper, CEO of ChooseEnergy (Part 6)

Sramana Mitra: What is your experience in this industry as a woman? Of course, retail is actually full of women and women executives. Technology is less full of women executives and CEOs. This company falls a bit more on the technology side. What is your experience navigating this world?

Kerry Cooper: I’m a little bit of a novelty. It is unusual. More of the traditional electricity power generation business is male-dominated. There were five women in my class of a hundred twenty in engineering. I’m very comfortable in a male-dominated environment. I think I always grew up with the path of wanting to be treated equally. I don’t want to be called out as different.

As I matured, I realised that I am different. I’m more comfortable being out there as a female CEO and talking about it, not because I want to be called out as different, but rather because I think we need more role models for the younger generation behind us who need to see other women be successful. There are an infinite number of paths and choices one can take on how you think about balancing work and life. The more we can make this visible, the better off we will all be. >>>

Women ARE Raising Venture Capital: Kerry Cooper, CEO of ChooseEnergy (Part 5)

Sramana Mitra: Talk about your financing strategy. You just mentioned that it takes a lot of cash to acquire those customers upfront and it takes time for them to really pay off. What is the financing strategy?

Kerry Cooper: We’ve raised $25 million over three rounds. We’ve got a great set of investors who are really supportive. I’ve read a lot of your blog on bootstrapping versus venture. I find great value in having a Board that is connected to the industry. To me, there’s a benefit of having a client of Perkins who sees a really high deal flow. You can connect disparate points and say, “Have you thought about this business?”

Sramana Mitra: I’m not against venture capital at all by the way.

Kerry Cooper: I know. Jerry bootstrapped and had a great business he built on his own. We took the VC money to invest in technology, which I think is a wise investment.

Sramana Mitra: Our general philosophy is bootstrap first, raise money later. Even though you didn’t do the bootstrapping phase, ChooseEnergy fits exactly that model. >>>

Resilient Entrepreneurship: Inspire CEO Brian Loew (Part 7)

Sramana Mitra: This is actually a great story. I love stories like this. There’s another entrepreneur whose story I’ve covered. For the first four years, he had no revenue. In the fifth year, they had a million dollars in revenue, and in the sixth year, $100 million. If you’re interested, you can check out his story.

The company is Taboola. I’ve had him both in Entrepreneur Journeys Series and on my Roundtable. We’ve covered him extensively just because I love his story and the persistence. How did things turn out in 2011 to 2014? Did you get that kind of a hockey stick?

Brian Loew: Yes, we ramped up. Now, we’re doing over $5 million. We’re looking at 80% year-on-year growth. It’s really ramping up nicely. We just hired our 30th person. There’s one more funding event that I should mention. About a year and a half ago, we were approaching break even. Things were much more stable and solid. I felt like we could grow more quickly with more money. >>>

Women ARE Raising Venture Capital: Kerry Cooper, CEO of ChooseEnergy (Part 4)

Sramana Mitra: What were the milestones in your first year of running this?

Kerry Cooper: I think there are probably many ways you could look at what the milestones are. We started with six employees. We are 43 today. There is a lot of team growth. We have a great team now. Frankly at 43, it’s still relatively small for a lot of Silicon Valley companies. You end up with that critical mass of what it takes to build a product development team, a great marketing team, and a great business development team. This year, we re-platformed. We have the broadest coverage of energy plans than anybody on the Internet. We’ve got 1,200 plans across every utility in the US. When you have that data, leveraging that for other parties is pretty valuable.

Mint, for example, is one of our great partners. When you’re looking at your bill, we can compare and make it easy to switch to Mint. We’re working with the Dallas morning news right now on creating an energy page on various media outlets. It’s a question of leveraging this platform where we have people coming to us but then leveraging information off of our site as well. >>>

Resilient Entrepreneurship: Inspire CEO Brian Loew (Part 6)

Sramana Mitra: If you have the stomach and the resilience to stick it out, it gives you the ammunition and ability to gather up a lot of competitive advantage. It’s not easy to build up that kind of competitive advantage in a short order. It’s just a matter of time. If you can survive those years of crossing the desert, then you build a lot of competitive advantage, which is not easy to do in a short order.

Brian Loew: If I were to start today with Inspire competing against us, it may be impossible and it’s not because of the technology.

Sramana Mitra: It’s the network effect of it. It’s the community that you’ve built that’s hard to replicate.

What about survival in that period when you had five years of no revenue? It’s not a comfortable zone for any investor. How did you manage to survive? >>>