Joah Spearman | Crain's Austin

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Joah Spearman

Background:  

Localeur is a community of locals who share recommendations on their favorite local places to eat, drink and play to help travelers #experiencelocal. Localeur's community spans 50 major cities in the U.S., Canada, Australia and U.K. with over 10,000 authentic recommendations exclusively from locals. To date, Localeur has served nearly 2 million travelers.

The Mistake:

Having my priorities not be in line with my mission early on.

Early on, I didn’t have a very firm perspective on what my vision for Localeur from a business growth standpoint. I brought a lot of naivety into becoming a tech founder. I think a lot of people see movies like "The Social Network" and read articles about tech startups and get this idea of what building a company is supposed to be like. It seems like a very clear map in that if it worked for other startups, it should work for me too.

Like,"I’m going to build this company, raise seed funding and hit this milestone and then raise more money and hit another milestone." It’s almost like paint by numbers.

The first year or two, I spent a lot of energy thinking that way. There are founders that I mentor now that still think that way. As a result, I got distracted from bigger priorities such as what were the milestones I was trying to achieve over the next year, two or three. What would be the key reasons to build something of value? Why would someone want to invest in us or acquire us? I was too focused on chasing the VC wagon wheel and getting distracted by what was happening to competitors.

So for the first 18 months to two years, I was spending a lot of energy on meetings to Silicon Valley and San Francisco that didn’t go anywhere before I realized that the means didn’t justify the end. I had to re-think, "Why am I doing this? Why am I so passionate about this? What got me into it to begin with?"

Not everything that other people do should apply to our business.

The Lesson:

A day after my birthday last year in April, I left Austin in my car and drove for 43 days all over the country. I visited 35 cities, some I’d never been to and some I had. I wanted to meet our localeurs, as well as to meet locals in cities that we weren’t launched in yet.

I was getting back to the very mission, the spirit of why I had founded the company to begin with. I wanted to get close to our users. I had a lot of awakenings during the six weeks I was gone. One of the things that came out of that involved my co-founder and I having an honest conversation after I returned where we mutually agreed it would be best if he stepped away from the company amicably. So he did, and we’re still friends.

After that, I spent less time and money chasing the VC dream. I started to take feedback from our board of directors and began to focus on being more capital efficient, building our revenue and getting to cash flow positive. Now I have completely changed my perspective with Localeur and what kind of business we’re going to become.

In terms of raising money from VCs, I’ve realized one, we’re in Austin and not in Silicon Valley. There are different conditions. Plus, I’m an African-American founder and the fact is the VC landscape is fundamentally different for me than other founders. I’m in this business to fulfill a mission. If not, then nothing else happens.

I need to be closer to the mission fulfillment rather than selling the dream. That means getting closer to users and building rich content. Even if it takes us longer and it’s a bit of a slower burn, I want to keep our focus on our mission and constantly building a community rather than chasing a shiny bright object of a new VC fund writing checks.

I would say the investors we do have (mainly angels) have noticed the level of grit and perseverance. I’ve accepted that we’re not going to be the prettiest girl in the school when it comes to VCs. In addition to what I mentioned before, I know some VCs are turned off of this space because other companies that raised a lot in our field haven’t done as well.

I realized it makes more sense to follow a more prudent business model as opposed to the venture-backed model of building a rocket ship. Our mission isn’t about convenience, it’s about quality and authenticity. Over the past year, we’ve built an advisory board of 14 of our users to help us think through our mission even more and how we can service it. Plus, we’ve made some hires over the last year of people who we think have a background closer to what we’re trying to do as a company.

Almost nothing I do now is trying to make Silicon Valley venture firms think my company is attractive. It’s not that I don’t respect their work or opinions, but it’s a distraction from our mission. And I had to learn to cut out that distraction and figure out that not everything that other people do should apply to our business.

 

Follow Localeur on Twitter at @Localeur.

Pictured: Joah Spearman. | Photo courtesy of Localeur.

Do you have a good story you’d like to share, or know someone we should feature? Email jscheibel@crain.com.

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