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Writing software never seemed like work to young Ham Lord. In high school and then in college, coding is what got him rolling with his other courses; he loved it. This passion, and the happy coincidence of being at the right place (Brown University) at the right time (early 1980s) led to a brilliantly productive career in computing and entrepreneurship.
Ham’s early work in computer graphics would eventually lead to innovation in applying 3D imaging to the creation of new molecules. Later he helped build software with applications in medicine, oil & gas exploration and engineering analysis. He even did work that presaged today’s drone technology.
After 16 years as a software engineer and entrepreneur, Ham cashed in his chips and began a hugely consequential career as one of Boston’s super angel investors. He was the engine behind the relaunch of Launchpad, one of the country’s most respected angel groups. In a frank and accessible interview, Ham discusses the workings of this group, talks about companies that excite him and addresses current trends in the ambit of angel investing.
Click here to read the full episode transcript.
TOPICS COVERED IN THIS EPISODE OF ANGEL INVEST BOSTON:
Ham Lord Discovers His Love of Computer Programming
How Ham Lord Connected with His First Job After Brown
Building a New Display for the F-14 Navy Jet
Why Ham Lord Founded His First Startup
AVS Rises from the Ashes of Stellar
Ham Lord’s Transition from Software Development to Marketing
After 16 Years Building Startups Ham Lord Takes a Sabbatical Year & Starts Investing
Ham Lord Discovers Angel Investing
Ham Lord Relaunches Launchpad
Ham Lord & Christopher Mirabile Get Together
What Does Ham Lord Look for in a Startup?
The Ones That Got Away
Ham Lord’s Favorite Pivot Story
Ham Lord & Cambridge Trust
Ham Lord Talks About Launchpads’ Early-stage Track, the Catalyst Program
Two Companies in the Machine Learning Space – Netra.io & Smartvid.io
Seraf-investors.com & Seraf Compass
Trends: Professionalization of Angel Investing & the Angel Capital Association
Transcript of, “Launchpad Founder”
Guest: Super angel and founder, Ham Lord
Sal Daher: Super angel Ham Lord was born to code. This led to a successful career in software, eventually the founding of his own company. More interestingly, Ham Lord is the founder of Launchpad, which is Boston’s leading angel investing group. This is a story of how he got to the point where he is now of being one of the leading angels in Boston in helping build really outstanding companies. So, if you care about fundraising, if you care about how to build really great tech companies, listen to this interview which I’m relaunching today. And, if you don’t learn something really valuable from this you can call me up and chew me out!
Sal Daher: Welcome to Angel Invest Boston, conversations with Boston's most interesting angels and founders. I'm Sal Daher and my goal for this podcast is to learn more about building successful new companies. The best way I can think of doing this is by talking to people who have done it. People such as my guest today, founder and super angel Ham Lord.
Ham Lord: Hey Sal.
Sal Daher: Hey.
Ham Lord: Good to see you.
Sal Daher: You're welcome. I'm excited you could join us today as we record our 20th episode. It's terrific that you came out on a windy, cold, gray day.
Ham Lord: I know. I appreciate it. It's not exactly spring time here in Boston but, give it another couple of weeks and ...
Sal Daher: We're always frustrated with our climate or weather here.
Ham Lord: Yeah.
Ham Lord Bio
Sal Daher: Hambleton, Ham Lord, has over 30 years of experience in the software industry, founding and building industry leading companies. Currently Ham is the co-managing director of Launchpad Venture Group. Launchpad is a Boston based angel group that focuses on seed stage technology companies. He manages the group's deal flow, due diligence and investing activities. He is also the co-founder of Seraf a software company that develops professional portfolio management tools for investors in early-stage companies.
Ham is an active angel investor and advisor to early-stage companies. He is a board member of Qstream, Netra and Cambridge Trust Company, and a board observer for Repsly, ArtLifting, Building Engines and EveryScape.
Ham co-founded data visualization vendor, Advanced Visual Systems. Ham helped launch two computational chemistry companies, MicroChem Technologies and PolyGen. These companies were early developers of drug discovery tools and were part of an industry-wide acquisition roll up that resulted in Accelrys. Ham graduated magna cum laude with a degree in computer science from Brown University.
Ham it's a tradition in our podcast that the first question addresses how our enormously successful guests found their calling in life. This is done as a service to young listeners who're trying to find their direction in life. Please tell, recall for us that time when you discovered that you wanted to build software.
Ham Lord Discovers His Love of Computer Programming
Ham Lord: It was actually pretty early on. Prior to even getting into college. Back in the 1970s, the days of tapes and card readers and things like that. I really enjoyed programming. Unlike most courses that I was taking in high school and then college this was an area where I just really enjoyed it. It didn't feel like it was work. It got me going, and I love writing software.
Sal Daher: Then you decided to study software at Brown University? What lead there?
Ham Lord: I started off, I thought I wanted to be a classic civil engineer. I wanted to build buildings etc. Those classes were too hard and the computer science classes were really easier. That's what I thought. While I was at Brown I was very lucky in that, the chairman of the computer science department a guy named Andy van Dam was one of the leaders in computer graphics. The university had a lot of computer graphics equipment and courses in that area. That's really where I focused.
While I was an undergraduate in addition to working for Andy in his lab, I also worked for the Planetary Geology department at Brown and did a lot of work with looking at planetary imagery from Mars and Venus back in the, early '80s.
Sal Daher: Oh okay. Interesting. Computer science, as a refuge from civil engineering.
Ham Lord: Yeah.
Sal Daher: I studied civil engineering. That was a refuge from Math. My dad's a mathematician and I started, "Oh I'm going to be a mathematician." But then I ran into a buzz saw at MIT. The math department at MIT was incredibly competitive. I couldn't keep my head above water. My study habits were really crummy in those days.
Ham Lord: Well the computer science department at Brown was a very open and welcoming department. Andy sort of set the tone there. It was a small department. My class. ...
Sal Daher: It was still an emerging science.
Ham Lord: It was. My class was the first class to graduate with a degree in computer science where we spent all four years in the computer science department. Prior to that it had been sort of applied math. Then it transitioned to computer science.
Sal Daher: Tremendous. What was your first job out of Brown and how did you connect with that?
How Ham Lord Connected with His First Job After Brown
Ham Lord: Because of my interest in computer graphics when I went looking for jobs, I was principally interested in companies that were doing some form of computer graphics. At the time, video gaming was a big area. I interviewed with several companies up here in the Boston area but, I didn't quite see myself spending my career creating video games.
Building a New Display for the F-14 Navy Jet
I was recruited by an MIT spin out company called Intermetrics. They were well known as software developers for the Apollo missions back in the 1960s and '70s. Some of the space shuttle technology, etc. I was brought on board to help them develop a next generation of 3D display that would be put into aircraft. Our customer, our client was the Navy and we built essentially three-dimensional software that replaced all the instrumentation in the cockpit of an F-14. Strapped a refrigerator sized computer graphics engine on the bottom of the F-14 and had a pilot fly the plane just looking at our display as opposed to all their other instrumentation.
The pilots actually they were a little reluctant to do this and partly it's because they couldn't use their other instruments, but I think partly because some of them realized that if you fast forward to 15, 20, 30 years in the future, they're not going to be flying their planes anymore. Somebody is going to be doing it from the ground.
Although I didn't know at the time and maybe the other people I was working with didn't realize at the time but we were basically doing the forerunner to the drone technology that's in common use today.
I was there for about 18 months.
Sal Daher: Heads-up display were eventually implemented but it's not that particular function of it.
Ham Lord: Yes. This was not a heads-up display. This was a standard display that was on the part of the instrumentation in the cockpit but it replaced all of your instruments. Basically, what it gave you was an outside, three-dimensional view and a highway that you as a pilot were supposed to fly down. It told you exactly where to fly, how to maneuver your airplane.
Sal Daher: Instead of they're looking where they are going and so forth, and flying the plane, they were flying within this ...
Ham Lord: Correct.
Sal Daher: This virtual environment that you created.
Ham Lord: Yeah.
Sal Daher: I can see how that's ...
Ham Lord: Yeah, yeah.
Sal Daher: Yeah not. Heads-up display is kind of like a compromise from that.
Ham Lord: Yeah.
Sal Daher: You were two years out of college when you joined PolyGen, which I imagine was a startup at the time. Why did you decide to join and what did you get out of it?
Ham Lord: Between Intermetrics and PolyGen, there was something in between, a company that I co-founded with several other people I worked with in Intermetrics called MicroChem Technologies. There was another project at Intermetrics that was doing 3D molecular modeling. I was friends with one of the developers on that team. I did some work on that team and in the process met several professors at MIT who were leading scientists in the areas of molecular modeling.
We decided, myself and several engineers from Intermetrics decided to start a company MicroChem to build the first generation of commercial tools for designing new molecules, new drugs. We started that in, I think it was the spring of 1985 or so, about 18 months after I started at Intermetrics. Started the company going, built the first product and during the process of building that product, PolyGen also happened to have as an advisor one of the professors we had at MicroChem, put the two of us together.
PolyGen was in the process of raising venture capital. They wanted to build a software suite of computer-aided molecular design tools. Our tool fit right in with what they were planning on doing. They acquired us about 6 months after we had started. These days you call it an acquihire. Essentially, they got three young talented engineers, they paid us some money, they paid our angel investors some money as well, and we became the initial development team at PolyGen.
Why Ham Lord Founded His First Startup
Sal Daher: The decision to then start the predecessor company to PolyGen. What happened in your mind. You're thinking, "Oh geez, I want to be a founder, " or was it just sort of like, "Oh geez, the right people, the right time" and you saw that opportunity.
Ham Lord: Well this is a while ago so I'm trying to think what it was that really inspired us. I think there were a couple of things.
One of the interesting challenges of working as a government contractor in my particular case was, it didn't matter if you got the project done early, the government didn't care. The company actually didn't want you to get it done early, because they were being paid by the government for you to work for a certain amount of time. They told us to basically sit on our hands while the contract time ran out.
What did we do, we started sitting around thinking about ideas of other things that we could do. Doing our own thing, three young guys, was kind of an interesting thing to do. We didn't have mortgages, didn't have family responsibilities etc.
Sal Daher: You had a skunkworks project.
Ham Lord: No. We actually, we left.
Sal Daher: Oh, you left.
Ham Lord: We just left. This was not something that we were doing on nights and weekends.
Sal Daher: Okay.
Ham Lord: We were thinking about it on nights and weekends but as soon as we made the decision we left the company at that point.
Sal Daher: Tremendous. Tremendous. In January 1992, you co-founded Advanced Visual Systems, AVS.
Ham Lord: Yeah.
AVS Rises from the Ashes of Stellar
Sal Daher: Please tell the story of how that came about and particularly I want to understand how you made the leap. Where were you before and then the transition to AVS.
Ham Lord: I had left PolyGen in the late '80s and I went to work for a hardware company called Stellar Computer. Stellar had been co-founded by the original founder of Prime and Apollo computer a guy named Bill Poduska.
Stellar was building a graphic super computer. Think of, at the time a workstation that engineers and scientists could use. The sad thing is you fast forward to today and you've got probably 20 times more power in your iPhone than you did in that first Stellar machine. That was a quarter million-dollar machine.
As part of being able to sell and convince people to buy this hardware that there as a product called AVS that the software team at Stellar built. I was part of that team. Stellar unfortunately hit some real challenges making sales etc. Its investors pretty much said, "We're not going to continue to fund the company." AVS as a product had been quite successful. We had a large number of customers. We'd made the software available not only on Stellar's hardware but also Sun Microsystems, IBM, Digital, Silicon Graphics and others. We spun out as ...
Sal Daher: This was data visualization, graphing?
Ham Lord: Yeah.
Sal Daher: Highly advanced graphing?
Ham Lord: Yeah. 3D technology used in medical imaging, oil and gas exploration, engineering analysis.
As Stellar, the hardware company was going out of business, AVS the software company was launched. Myself along with about, I think there were about 13 or 14 of us from the original AVS team spun off in '92 and got that company going.
Sal Daher: Okay. In 1998, you ended your connection with AVS presumably the company was sold. Can you please tell that story?
Ham Lord: Yeah. AVS grew nicely as a business. Got up to in the neighborhood of 20 million dollars in revenue. If you remember, in '98 back at that time we were just at the beginning of the internet boom. Things were really starting to take off at that particular point in time.
Sal Daher: Irrational Exuberance, 1996.
Ham Lord: Yeah it was an exciting time for technology, but I was at the time in '98, I was running marketing. I'd left engineering, ran product management for a number of years, and then was VP of Marketing in the '97-'98 time frame. Most of our customers were scattered around the world and I was spending most of my time on airplanes. I was not home. I had a very young family. It wasn't really an ideal personal situation for me.
I also knew that the company at that point was looking to be acquired. It was about 6 months after I left the company. They were acquired by a public company that was in an adjacent space. I felt it was time for me to move to the next stage in my life. I just wasn't sure what that next stage was.
Sal Daher: Excellent. Tell me a little bit about the transitions. You went in on the engineering side but you eventually went over to the marketing side. What drove that.
Ham Lord’s Transition from Software Development to Marketing
Ham Lord: I had been a software developer for all my professional life up to that point, which was about 10 years. If you add the fact that I was working in college as a computer scientist, it was 14, 15 years of software development. I was getting a little burnt out from that.
I really enjoyed talking to customers. It was natural to move from being a full-time engineer into product management. I understood the product well, I understood our customers and I think a lot of really good product managers are people who originally come from engineering but instead of being introverts who want to focus entirely on what's going on in the product, they may be a little bit more extroverted and want to talk, spend more time talking to customers. That was how I made that transition from the engineering side to the product management side.
We had structured things so that product management was part of marketing and not part of engineering. Some companies do it as part of engineering. Just depends on the business. Over time my role and responsibility continued to grow within the organization. Ultimately, I ended up as taking over as VP of marketing.
Sal Daher: Excellent. This is really enlightening because it's a great model for people, for engineers who are ... Listening to these models is, I think very helpful. I'm just thinking of my son-in-law right now who'll probably go in that direction like that in the future sometimes.
You exited June of 1998 and then January 2002 you founded Launchpad Venture Group. What were you doing in the interim?
After 16 Years Building Startups Ham Lord Takes a Sabbatical Year & Starts Investing
Ham Lord: Having done 16 years in a row of startups, I was ready for a little bit of downtime. I did about a year sabbatical. Then I had to figure out what the hell am I going to do next. I started out by focusing on publicly traded software companies and investing in those companies.
Although, it was interesting and my timing was quite good, I was doing this in the later '98, '99 and early 2000 period, I didn't really enjoy it that much. I wasn't learning what I really wanted to learn about businesses. I prefer the early-stage company side of things.
In early 2000, I said, I'm done. I sold what I had invested in. Timing was good.
Sal Daher: Perfect timing.
Ham Lord: Timing was good. Some people thought I was crazy. You're making money why would you do it.
Sal Daher: I remember those days, yeah.
Ham Lord Discovers Angel Investing
Ham Lord: I used some of the capital that I had made during that to go into angel investing. How I got into angel investing is totally random. Shortly after I said, time to give up on the public companies side of things, the father of a girl in my daughter's elementary school class said, "I'm a member of this thing called an angel group. You want to come and check it out."
This was a small group that had started in say '98, '99 called Back Bay Investor Group. It was co-founded by a guy named Jerry Socol who was the former CEO of Filene's.
It was a relatively small group. I think there were 12 or 15 of us. I was the one software person in the group. It was a real mix of backgrounds. All senior executives at companies from the Boston area. Not a ton of tech experience in the group.
That group started. Really enjoyed the process, meeting companies, working with early-stage startups, doing diligence with the companies that came in. The first investment that I made with that group was a company called SmartPak.
SmartPak had a way of delivering supplements for people who own horses. They took what many people thought would be a very small business and in a matter of about 10 years turned it into a 100-million-dollar company. They were acquired a few years back by a large publicly traded company.
Sal Daher: Sounds like a perfect company to come from a Back Bay Angel group.
Ham Lord: Yeah, yeah. I was lucky my first angel investment paid out well.
Anyway, going back to the time line. If you recall when the dotcom bubble burst, not only did it burst, but also the stock market did as well.
Sal Daher: Everything.
Ham Lord: Everything went down. A lot of the people who were members of the Back Bay Investor Group really started losing interest. "How are we going to make money. These tech companies are now, people say they're not worth anything. My portfolio is worth a lot less. I don't have the same amount of capital to actually invest in startups."
Back Bay Investor Group fell apart but I wasn't ready to give up as an angel investor. I went looking for another group. I'd heard about a group called Launchpad.
Ham Lord Relaunches Launchpad
Launchpad actually had been around before I relaunched it in 2002. Like Back Bay Investor Group it had fallen apart as well. There was nobody who was willing to run the group, etc. I talked to the original co-founders of the group and said, "I don't really have anything that I'm working on right now. I can certainly put time into this and I'll run the group for the next year or so."
One year has turned into 15 years now, although, the good news is I have a partner helping me run it. In the early years, first nine years I ran the group as a single managing director.
Sal Daher: How did it operate?
Ham Lord: The group essentially operated like most angel groups in that you have a whole bunch of members and at the time when I first got it relaunched, I think there were somewhere between 10 and 15 of us. Any deals that came in, they would come to me. I would talk to the other members and say, "Here are the three that I think, or the two I think, are going to be the best for us."
Sal Daher: You were the screening committee, sort of.
Ham Lord: I was basically doing pretty much everything.
Sal Daher: Everything. Cool. I can imagine how demanding it must have been.
Ham Lord: But, even from the beginning, Launchpad members have always been very active and helping out. Making sure that the trains ran on time, that was my responsibility. I had to do a lot to ...
Sal Daher: They were writing individual checks?
Ham Lord: Yeah. We write individual checks at Launchpad. We don't have a fund. We don't do single purpose LLCs or have an LLC that invests. Everyone's writing checks.
Sal Daher: Individual checks.
Ham Lord: Individual checks.
Sal Daher: But you're sharing your due diligence.
Ham Lord: Yeah. We try to eliminate as much of the administrative burden on running the group but make sure that we still did solid work on the finding of companies, screening them and then ultimately doing the diligence on them before we'd invest. Then, putting somebody on the board of those companies.
One of the lessons we learned fairly early one is, if you don't have visibility into a company, bad things can happen pretty quickly.
Sal Daher: Yeah. Certainly true. How does Launchpad Venture Group operate now? How is it different from the way it was operating then?
Ham Lord & Christopher Mirabile Get Together
Ham Lord: In the 2010 timeframe, I met Christopher Mirabile who, I know you've talked to in the past. Christopher joined Launchpad and he also joined a couple of other Angel groups including Walnut and started his own group called Race Point. I acted as an advisor to him at that particular time. One of the things we realize is that, we're both doing the same thing in two separate groups. We're both going crazy. We enjoyed working together. Let's see if we can do this together as opposed to separately.
I was definitely ready for that transition. I'd been running Launchpad by myself for 9 years. It was definitely time to get some help.
Sal Daher: In that time how many deals did you invest in?
Ham Lord: Probably on the order of 25 or 30.
Sal Daher: 25 or 30 over 9 years.
Ham Lord: Yeah, yeah. When you're a smaller organization and you have less resources it's tough to do a lot of deals.
Now, we fast forward to today, in addition to Christopher, we have a full-time director or operations, Jodi Collier. She's really sort of the people-oriented [person], her focus is on the people side of things. Christopher and I are the deal and entrepreneur side. She's on working closely with our members, helping us with the recruitment process, bringing people into the organization. She also does a lot of interaction with the entrepreneurs as well. She brings people skills to our organization that you really need to have in an angel group.
Sal Daher: Do you have monthly meetings? How does it work?
Ham Lord: Yeah, yeah. Like a lot of angel groups, we have a standard monthly meeting. At that monthly meeting, we bring three companies in, to present. We're on a typical pace where if you look at the last three, four, five years with the group, we average about 10 new investments a year within the organization.
If you get though the screening process and ultimately you get to present in front of the group, your odds of getting an investment from our organization are relatively high, certainly better than the one is a hundred that gets invest when you look at the top of the funnel.
Sal Daher: Also, very high of getting money from other organizations that respect Launchpad a great deal.
Ham Lord: Yeah. Because, we syndicate pretty much all of our deals. There is a rare occasion where we don't but that's very rare. We like to syndicate with other investors here in the Boston area.
Sal Daher: Excellent, excellent.
Sal Daher: This podcast is brought to you by Pater Fasse, patent attorney at Fish & Richardson. The biggest assets of a startup are its team and its intellectual property. So, make the most out of the great efforts of your team by getting the best advice on building your intellectual property portfolio. I urge you to check out Peter Fasse, patent attorney at Fish & Richardson. Fish & Richardson is the foremost patent law firm and you should not skimp on patent advice.
Coming up next, I will ask Ham Lord what he as one of Boston's top angel investors looks for in a startup. First, I would like to thank Tivan the Biker for his thoughtful review. Tivan the Biker wrote, "Sal, he gets right to the point in all his interviews. I like that he really knows about his interviewees and has done his research. It makes for some incredibly introspective insightful discussions." Thanks, Tivan the Biker for giving back by writing your review. You give a fine example.
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What Does Ham Lord Look for in a Startup?
Ham, what do you look for in a startup?
Ham Lord: That's an interesting question. I don't have necessarily one answer for it. First and foremost, I look for an entrepreneur who I can really believe in. The reality is there are a lot of great ideas out there, living here in the Boston area with Harvard and MIT, Northeastern BU and probably a dozen other universities where all sorts of incredible things are coming out. We're inundated with fantastic ideas, but there is a relative shortage of great entrepreneurs.
Sal Daher: Absolutely.
Ham Lord: I think first and foremost I look for the entrepreneur that I think can really be successful. But, I do think that having an idea that interests me is what makes me take the time to then, really get to know that entrepreneur.
We receive, I don't know, several hundred plans a year that get into the top of the funnel at Launchpad. Above that top of the funnel there are thousands of companies that are buzzing around this area that our members at Launchpad meet with. Ultimately a couple of hundred get into the top of the funnel. I'll take a look at each one of those from the standpoint of, is this something that I'd be interested in investing in or not.
Now, ultimately, we invite about 30 entrepreneurs to present at our main forum, monthly forum. Then, another 20 or 25 that present at our Catalyst program, which is for really early seed-stage deals. Just within Launchpad I'm seeing about 50 entrepreneurs present.
I also see lots of other entrepreneurs in the ecosystem whether it be going to events like some, the MIT Enterprise Forum event or Mass Challenge, Tech Stars etc.
Ultimately though, I can only invest in a relatively small number of deals each year. I think it is probably somewhere in the order of five to ten new investments a year, is the pace that I go at.
How do I narrow it down? As I said, the idea has got to be something that appeals to me. Assuming it does, then it's spending a lot of time getting to know that entrepreneur and understand whether he or she has what it takes to really take that company to the next level.
The Ones That Got Away
Sal Daher: I have a bunch of companies that I regret not having invested in. Lovepop is one of them. Let's see another. AirFox is another one.
Ham Lord: Okay.
Sal Daher: So forth. Do you have any of those regrets.
Ham Lord: There are few that have done extremely well at Launchpad that I didn't invest in at the time and wish I had. Localytics is an example of that. Another company that we have that many Launchpad investors invested in called ezCater. Those companies took off at a much faster rate than I certainly expected them to.
The interesting thing is I did like the entrepreneurs very much. Rodge and Stefania are two top-notch entrepreneurs. But, for whatever reason, maybe I was distracted at the time, maybe I had already made a certain number of investments at that particular point and was focused on something else, I ended up not investing.
You can't invest in everything.
Sal Daher: True.
Ham Lord: At some point you have to say, I've got to ... I can't do this deal because I've got these other deals on my plate.
Sal Daher: Yeah. With Lovepop for me, the people, fantastic team, really smart, very clever idea. I figured, this is a consumer thing. It's so fragile. Somebody else would come up and do the same thing. It really depends on execution. They are executing beautifully.
The other one, it was AirFox, was basically not enough bandwidth at the time. I just couldn't focus. Sara Choi on the phone, and I didn't get back to her in time so things petered out. That's my regret.
Ham Lord’s Favorite Pivot Story
Sal Daher: Do you have any favorite pivot stories that you would like to share?
Ham Lord: Yeah. Although, this is a different type of pivot story. I think a lot of times you think of a pivot and the company has a totally new product that they're developing or they thought they were going to do this and now they're going to do, you know, totally different approach to what they're taking on.
This is an active Launchpad portfolio company called Qstream. I'm on the board of Qstream. I've known the company for quite some time.
Sal Daher: Can you summarize a little bit what they do?
Ham Lord: Sure. At the highest level, what Qstream helps people do is to retain what they've learned. If I teach you something, if you take a class, you'll remember the material for about two or three months. Then, just the way the brain works, you'll forget it.
Sal Daher: Right.
Ham Lord: There's been a lot of research done at places like the Harvard Graduate School of Education and other places where it turns out that if you ask people questions about what they learned over a certain period of time, in a certain way you can change that retention from two to three months to more like 18 months.
Qstream's technology is based on some work that Harvard Medical School professor did to help his students and the people within Harvard Medical School retain what they learned. If you're a doctor or nurse, you damn well better retain what you learned.
Sal Daher: Yeah.
Ham Lord: Ultimately that got turned into a product. About six years ago the Harvard Office of Technology Development, which is their technology licensing office sent me a one-page summary on Qstream and asked if I'd be interested. It looked appealing, so I met with the entrepreneur, the CEO at the time, it's a guy named Duncan Lennox. Duncan's still the CEO. His co-founder Price Kerfoot was the professor at Harvard Medical School who developed the original technology.
When I first met with Duncan, when we started talking, we talked about the product, very intriguing. We talked about the science behind it, and the fact that this was clinically-proven software. I’d never worked with clinically-proven software that's had clinical trials done on it.
When we got to the go-to-market strategy, the focus was on free software, and using advertising to monetize it. Although maybe that would work, it wasn't something that was particularly appealing to me nor did I think it would be appealing to our members. I said to Duncan, at the time, "I like what you're doing but come back to me when you've got some paying customers."
Several months later he comes back and said, "We've closed deals with CooperVision, and with Boehringer Ingelheim and here's how the software is being used. It's being used within their sales organizations to make sure that their sales people remember, retain and then have the information they need when they go and meet with prospective customers for Boehringer Ingelheim’s case it's drugs and pharmaceuticals."
What Duncan had decided was that the initial focus on the company was going to be to go after sales people in pharmaceutical and medical device companies as their first target market. These are organizations that have hundreds if not thousands of sales reps around the world. They need to train them, they pay them a lot of money, they spend at least $20,000 a year training these people. They want to make sure they learn.
Pivot here was less a product pivot and more of a go-to-market pivot. Now, all of a sudden you had a company that we felt we could invest in, we could help out with. We thought that there was real potential. Here we are five years after the investment and the company is doing exceedingly well.
Sal Daher: I'm so glad to hear. Geez, I've got to look them up. I think that's ... Thinking all the stuff that I'm forgetting at the moment, I should be retaining.
Ham Lord & Cambridge Trust
Coming from a software background and being involved with startups, how did you end up on the board of Cambridge Trust. I understand they're quite active in serving startups. Would you please tell that story?
Ham Lord: One of Launchpad's very long-term members is a person named Gregg Stone. Gregg has been in the tech community here for a long time. He ran a small VC firm for many years but has been active angel investor for quite some time. Gregg was brought on the board of Cambridge Trust probably three or four years before I was. About five years ago the bank decided that it wanted to start to work more closely with the innovation ecosystem here in Boston.
Sal Daher: Makes enormous sense.
Ham Lord: It does.
Sal Daher: With the location.
Ham Lord: If you think about where most banking is done today by tech companies and life science companies, the first thing that comes to mind is Silicon Valley Bank or Bridge Bank, which are good organizations but I think we'd like to see a local bank be able to service the community so that if a high-tech company raises a lot of capital, puts that money in their bank account. If it's in Cambridge Trust you know that, that money is going to be lent out in our community, whereas if it's a Silicon Valley Bank or Bridge, maybe it will, or maybe it won't.
Anyway, I was brought on the board as a director largely because of the connections that I have within the tech ecosystem.
Sal Daher: To help develop that business.
Ham Lord: Yeah. Correct.
Sal Daher: Excellent, excellent.
Ham Lord Talks About Launchpads’ Early-stage Track, the Catalyst Program
Can you speak a little bit more about the early-stage track that you had at Launchpad? I forget the name that you use.
Ham Lord: Catalyst Program.
Sal Daher: The Catalyst Program.
Ham Lord: Yeah, yeah.
Sal Daher: How is it different from the main track.
Ham Lord: The main track is focused primarily on companies that are looking to raise, let's say, somewhere between half a million and two and half million. If they're a tech company there's a good chance that they have a product in the market, not much in the way of revenues, but they have handful beta customers etc. Maybe they've got some revenue. They're a little further along. Their organization's a little bit more developed.
The Catalyst Program is what I would call a true seed kind of deal. This is a company that's very early on. They might be looking to raise somewhere between a $150,000 and $350,000. They're really just trying to get to that proof of concept. They're trying to take the company from where they are today to the stage where a lot of the angel groups and other early stage investors would be willing to put money into the business.
Now, our expectation on this program is that, a higher percentage of these businesses will ultimately fail, because these are really early, very early risky bets. Launchpad has about 20% of our members, really like doing these kinds of deals anyway. Since they like doing these kind of deals, they're doing them. We thought, why not try to make so it's a little easier for these companies, instead of having to have five coffees with five Launchpad members scattered around, why don't we bring them together as a group.
Sal Daher: Right. Are there any startups that you're currently involved with that you would like to bring our attention to?
Ham Lord: Sure. I'll start with a couple that are in one of the, considered hot spaces in tech these days. Some people call it machine learning, other people call it AI. Let's start with something that's in the press a lot.
Two Companies in the Machine Learning Space – Netra.io & Smartvid.io
We have two investments in the machine learning space. One is a company called Netra. Netra.io. They have developed technology that combines computer vision with machine learning to be able to look at images and videos for that matter and pull out interesting things. Initially their target market is going after the advertising and brand world where people need to know what images have a particular logo in it.
If I'm Adidas, I want see all the images that have come up on social media of people wearing my clothes, my shoes etc. Furthermore, I want to know what's going on in the scene. Are they playing sports, are they being active? How are they being active.? Is it men, is it women? What are they doing? I need to be able to find out more about how my brand is being positioned. Unfortunately, with things like Instagram and Tumblr and Twitter etc., you don't necessarily know a brand is in there unless somebody puts in their Instagram, in the comments or the text that it's Adidas, Adidas has no idea that they're in there.
More and more content these days is being just imagery. To really understand what's going on you have to be able to understand what's in that imagery.
Netra is using their computer vision machine learning technology to be able to understand brands and understand the context that those brands are being used.
Sal Daher: I'm just curious, in their competitive matrix, does Ditto Labs show up there?
Ham Lord: Ditto would show up there, Clarify would should up there. Then you also have to factor in some of the big players, Google, Facebook,
Sal Daher: IBM.
Ham Lord: Pinterest, IBM are all doing different aspects to this. It's a very competitive marketplace. This is one where good technology is important but building a product that really solves a real-world problem is important too. Just the core technology. There are lot of people who have interesting core technology but you need to really then put it into a product.
Sal Daher: You think that Netra is doing that capably?
Ham Lord: I do. That leads me to the next company, which is Smartvid.io. I'm not sure why everybody is now starting to do .io but anyway, Smartvid.io. They are doing something similar to Netra but their focus is in the construction market.
If you think about a large commercial real estate construction today, if you go to a job site, you will see people taking videos, frequently you'll see drones flying around. You'll see people taking pictures. A lot of data about a construction site is being constantly documented, but there's not a great way to store and access that data and to look at it for interesting information.
Smartvid is building a platform that allows you to look at, to store, to search through large amounts of video and image data. Where they're applying things like machine learning and computer vision is looking at that large amount of video for things like, have there been safety violations here, are people wearing their hard hats, are they doing what we have instructed them to do on the job site because safety is so important.
Or, if we've got a pipe, do we have any cracks in that pipe. If that pipe is five miles long and you send a robot down to take pictures along that pipe you can have somebody look at that five miles worth of imagery, probably you will or you may have to. Wouldn't it be a lot better if you could use machine learning and computer vision technology to understand what cracks look like to be able to do that in an automated fashion.
They're taking some of the latest technology that's being developed today in those areas and applying it to a very specific vertical market.
Sal Daher: Another company that you started Seraf-Investors.com, is a very promising service that I could use as an angel investor. I'll probably sign up later when my schedule gets a little lighter.
Seraf-investors.com & Seraf Compass
Ham Lord: Yeah.
Sal Daher: Please tell me the story of how it came about and what you hope to achieve with it.
Ham Lord: Okay sure.
I think it was about, at this point maybe five years ago a Launchpad investor approached Christopher and myself and she said, "I've been a very active angel for the three years since I've been a member of Launchpad." I think she's also a member of a couple of other angel groups in the Boston area. "I've got, I don't know, 17 or 20 investments and I really don't know what I have. I'm having a hard time keeping track of it. You guys have been running Launchpad for a long time. You've got more than 17 investments. What do you do to track?" We kind of hemmed and hawed a little bit and said, "Well, we've got a spreadsheet. It doesn't do a great job of tracking things."
She asked what we did personally. Christopher had a pretty good spreadsheet and I had one that used to be pretty good but over time I stopped using it. We thought to ourselves, "You know what, we really should have something that allows us to know what's going on within Launchpad and also our own personal portfolios. There must be something out there." We started doing a little bit of research to see if we could find a tool that would solve this problem.
Didn't find anything. We talked to dozens of angel investors, we talked to a number of the smaller VCs and pretty much heard the same thing over and over again that people were either doing nothing or they were doing it with a spreadsheet and they weren't doing it that well in a spreadsheet.
Christopher and I, both coming out of the software industry said, "Hey, this is an idea for something. We need to do it for Launchpad. Let's just go off and do it."
We built the product initially for Launchpad and then started making it available for some of our members to use. Then we started getting inbound people saying, "Hey, you know, can you make this available in more general." About three years ago we made the decision that we want to make this more widely available. We put up a website. We allow people to plunk down credit cards etc. and we also produce a lot of content that's specific to angel investing.
Sal Daher: Very useful, very useful content.
Ham Lord: Yeah. The Seraf Compass was our way of taking all the knowledge that Christopher and I had gained over the last 15 or so years of being angel investors and making that more widely available, both as a weekly blog post but then we turned collections of weekly blog posts into eBooks that focus on things like how to do diligence, how to do exit planning, Angel 101, your basics of angel investing. Made those available as both eBooks that you can download for free and then also have published a couple of books on Amazon as well.
Trends: Professionalization of Angel Investing & the Angel Capital Association
Sal Daher: Very interesting, very interesting. Are there any trends that you'd like to highlight in the angel investing world?
Ham Lord: From my seat of being here, being an active angel for the last 15 years, I've seen some pretty interesting things that have occurred over time. First of all when I first relaunched Launchpad back in 2002, there were relatively small number of angel groups around the country. I don't know the exact number but we're talking well below a hundred. Angel investing was really not a very professional activity at that point in time.
In 2002, the first meeting of what became the Angel Capital Association happened here in Boston. It was held at the MIT Faculty Club. I think there were about 18 or 20 leaders of angel groups from around the country that were there at that particular session. Today, that sort of meeting is, I don't know, six, seven hundred person meeting, held at cities around the country. This year at the end of April we'll be out in San Francisco.
One trend I've seen is the increase in angel groups and the professionalization of the angel investing class. I think that has brought more capital to some of the early-stage companies.
The other part to this is that angels, as the groups have gotten larger as there have been more syndication and things like that, angels are no longer just the first money in and then you hope you can get a VC to fund the company. We've had a number of companies come through Launchpad that have never raised any venture financing and have gotten to an exit and they've raised substantial amounts of money. Two, three, five, ten million dollars from angels, that's allowed them to get to a stage that before they would have needed more traditional venture capital to get to those particular stages.
Sal Daher: Really interesting.
Ham Lord, I am immensely grateful to you for your generous help in making this a really a great podcast. I look forward to having you on again with Christopher Mirabile, your fellow co-Managing Director at Launchpad. I would like to invite our listeners who enjoyed this podcast to give back a bit and review it on iTunes.
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I'm Sal Daher, this is Angel Invest Boston, conversations with Boston's most interesting angels and founders. I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.