This is the 2nd of a series of interviews featuring remarkable women founders from all walks of life. They are a part of GiveGetWin’s charity initiative, where they will host webinars to raise funds for an off-grid solar village in India.
Kim Parnell is a charismatic, overly-hyperactive people magnet with a passion for helping entrepreneurs. She is the co-founder of Back I/O, a developer tools platform for building apps. Prior to that, she was involved in many businesses, both as a founder and an advisor, and has one successful exit under her belt.
Gwen: Here’s an easy one to kick this off. How did you get started?
Kim: My start in entrepreneurship was unforeseeable, though not atypical. I did neuroscience in college, and to be completely honest, I thought business was for, well…let’s just call them the “academically challenged population”.
Coming from a strong science and math background, where you need an 85% average to get into most programs, the business programs that let in students with 60% averages just seemed like a catch-all for people that screwed around in school or didn’t know what they wanted to do.
That’s so interesting. We have the same perceptions in Asia, too.
Yeah. I’d always thought business was boring based on the lessons I had to take in high school, and I had yet to realize the broad spectrum of skills and talents running a business actually requires.
The reason I love science, and specifically chose to dive into neuroscience, is becausethere was, and is still, so much to discover. Science blends discovered truths and proven methods of doing things, with creative ideas and out-of-the-box thinking. Science cannot evolve without innovation.
I had the unfortunate (and ignorant) view that Business was static. That it was mundane practices repeated across many genres. And though it is true that many aspects of business are similar and easily transferrable, I had no idea running a company would require so much creativity and innovation!
Too true. So when did you take that leap into entrepreneurship?
I was in my 3rd year of university when I took the plunge and moved to L.A. (that’s a story for another time). It was there that I was fortunate enough to meet some very successful young entrepreneurs. I realized that these people — smart, creative and driven to make a difference — were starting companies and ACTUALLY becoming successful at it! These were all qualities I felt I too possessed, and so I decided there and then that business is what I had to do.
I moved back to Toronto and attended a business development seminar with a good friend, with the intention of starting a ‘cash cow’ business. You know, the kind that you start, run for a year or so, and then it runs itself and you can just collect the check. Yeah… We were naïve to say the least.
All of the speakers were pretty great, but the one that hit home was Loral Langemeier of The Secret. She said, “You’re doing something for free that other people would actually pay for.” At the lunch break, we started brainstorming what we could do as a business that we already knew how to do. Cleaning!!! By the end of day, we had a business name, a logo, and of course, delusional visions of the millions we were going to be raking in.
Well… At least it was a start! What was that experience like for you?
Starting a business with zero knowledge was a serious learning curve, but we dove in headfirst. Many times we thought, “Holy crap, we have no idea what we’re doing,”but we’d already come so far that giving up would be a waste, so we pushed through.
We learned everything by doing it. Marketing, sales, quotations, account retention, PR, HR— you name it, we did it. We read books and attended seminars, and I think those helped in their own way, too.
Fast forward four years, we had a humming business with many clients and over 15 staff. We were pretty proud of how far we’d come.
Wow, that’s amazing! What eventually happened to that first business?
As proud as we were of our progress, we were still VERY much involved in day-to-day operations. We mutually decided we wanted to be able to focus on other passions, and put the business up for sale…
Lo and behold, someone bought it!
It was in that moment I realized the power of starting something from nothing, and selling it for profit. I was hooked.
So that led you to your next startup, Back.io. What challenges did you face when cofounding this company?
I would humbly say our challenges are far from over, but I am fortunate to have had prior business experience as a base. Do things enough times, and you can’t help but get better at them.
Back.io is a highly-technical startup. It’s a developer tools platform for devs to build better apps. That in itself, brings its own set of challenges.
What is the difference between a tech product and a fully technical product, then?
My partner and I like to think there are two categories of ‘tech’ startups:
- Startup businesses USING technology to run their company.
- Startup businesses where their product IS technology.
The first example is about 90% of the startups you hear about. The company is actually selling cars, providing a marketplace, or running a social network, while using technology as a means. Examples would include Uber, Snapchat, games, and basically, most consumer apps.
The second category — and this is where my company sits — are startups that actually SELL technology. They are often not consumer-facing and reside in the geek/developer world, especially in the early days. Consumer examples are: Apple, IoT, VR, analytics/data mining services, and machine learning. B2B examples are: database companies like CockroachDB, developer tools, and API micro services.
Now before everyone gets all red in the face, there IS a lot of overlap. There are a lot of analytics and data mining systems that have been incorporated into many startups, making them a bit of both categories. We are not trying to create a hierarchy within the startup world — heck, I would gladly take Whatsapp’s $19B payout anyday!
We just feel this distinction is necessary, because there are fundamental differences in how you go about starting these two types of companies.
Thanks for that clarification, Kim! Interesting analysis. What would you say are the pros and cons of running a startup of the second nature?
Well, here’s how I’d break it down:
- Your technology carries a LOT of weight. Because of this, you may not need to show as much traction as, let’s say, a social network startup, in order to lock down partnerships or secure funding.
- There is less competition. Most startups fall within the first category, so if you actually have a great product, you are likely one of a few.
- You’re difficult to replicate. Because very technical products usually have years of research and trial & error behind them, the feeling that it’s a race against 10 other people doing the same thing is virtually non-existent, which is a completely different state of mind to be in.
- Your technology carries a LOT of weight. Hah, see what I did there? That means your tech better be top notch if that’s what you’re all about. And because Murphy’s Law loves startups, your tech is going to fail…often.
- Assuming your target users are also quite technical, they can be difficult to convince. These people are skeptical by nature, and often get into the accepted way of doing things. The positive side to this is once you becomethe accepted way of doing things, you stick around for a long, long while.
- You usually DO need funding of some sort, whether it’s for engineering, hardware, or R&D. Highly technical products don’t just fall together by accident, you know!
Awesome points, Kim. I’m even more curious now… What’s it like being a nontechnical women founder in this industry?
They say perception is reality. I like to say that reality influences perception.
I don’t get upset with people (and by ‘people’ I am referring mainly to men), when they ask if I have started a blog, an online fashion retailer, or a fitness app, because most female-led companies do fall within those categories.
Now again, I’m not saying there’s anything wrong with that. Companies like Beyond the Rack and Ipsy have proven just how profitable these businesses can be. And if we look at their classic business counterparts — fashion, make-up and weight-loss are some of the MOST profitable businesses in the world, so why not bring them online?
While I WILL say that being a female founder is harder, being a founder is hard, period. I often do self-checks to see if the constraints I feel are real, or self-imposed. The startup world is rapidly evolving, which seems only fitting. These days, I’m still a part of the minority at startup events — but at least I’m no longer the sole female.
That’s powerful. Are there additional challenges being a nontechnical women founder of a highly technical product?
Being the female co-founder of a highly technical product does have its own unique challenges. For one thing, your users tend to be all male. If you have an online fashion startup, you may feel out of place in the startup world, but at least you are well-received by your audience. With a technical product, on the other hand, you sort of feel like you are constantly running uphill. You have to keep convincing people that you know your stuff and pull this off.
At the end of the day, I think being a successful female founder boils down to this — (1) know your stuff, (2) have first-hand experience, and (3) show CONFIDENCE. If you want to do a technical startup but are not well-versed in the subject matter, just start learning. No one has an excuse in 2016.You don’t have to be a domain expert to start, but you do need to be able to explain your product and have intelligent conversations with your users.
Are there upsides of being a women cofounder, then?
These niches may be primarily male-run, but that can be a good thing at times. As females in these circles, we tend to stand out, and if you have something interesting to say, you are far more likely to be remembered. There are also lots of organizations that are dedicated to supporting, empowering and funding female founders, so get on that!
Love it. Any last pieces of advice for aspiring women founders?
I have two. The first applies to all founders, male or female —
Don’t start a startup ‘just because’ or, worse still, to make money. It is NOT the gold rush the media makes it out to be. Yes, it is true that if your startup is successful, you can make more money than a brick-and-mortar business, but far too often people do things for the wrong reasons.
If you feel that building a business is in your DNA, then take some time and search for an idea that gets you excited. Evaluate it thoroughly before taking the plunge, and if the numbers don’t make sense, then (1) tweak the idea or (2) move on. DO NOT fall in-love with an idea. Numbers are facts. Throwing daydreams at an idea won’t turn the unit economics around.
The second piece of advice is, STOP thinking an investment (or lack thereof) is the reason your business isn’t working.
There has been a radical shift in the way we approach starting a business. In some cases, the startup costs are high in both tech startups and traditional businesses, like restaurateuring or manufacturing. Other industries with high costs to entry are businesses that require a lot of R&D or businesses requiring highly skilled personnel. Back.io actually falls into this category. We require very skilled engineers to get things moving at a good rate.
Most startups think they need investment, because it is the trendy way to do things nowadays. While many classic businesses are applying lean startup methodology, I think tech startups should revert back to the classic method for many areas in business.
Let’s say you have an app, and you want it to take the world by storm. That isn’t going to happen overnight, and getting that $1M investment isn’t going to make it happen, either.
Do what that new cold-pressed juice bar around the corner is doing — target local. Get a large number of concentrated users, either in type or geography. Uber and Groupon didn’t launch in 25 cities at once; they started small and expanded, almost like a restaurant franchising model.
Stop using investment as your excuse, and start pounding the pavement!
If you enjoyed Kim pouring her heart out, sign up for a 1-on-1 mentorship session with her for more honesty, insights and advice. Kim loves helping women who are just getting started in entrepreneurship, and she will give you personalized guidance for your own startup journey. Only five slots available.