John Fitzpatrick of Applivate: Why I Tell People How Things Really Are

John Fitzpatrick, PhD, is the Founder and CEO of Applivate, the company that invented ShugaTrak®, a smartphone app that automatically retrieves blood glucose readings from glucose meters and texts or emails them to loved ones and/or healthcare practitioners. John is a former neuroscientist turned entrepreneur. In 2011, John came in first place in Startup Weekend New Haven for ShugaTrak and has been hustling ever since.

As you might imagine, John has been through all the ups and downs that we see many of our Connecticut startups experience. Through this interview as a part of the Startup Roadshow, he shares some interesting insight for other early stage entrepreneurs, and what it’s been like to start a venture in New Haven.

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Your company Applivate launched ShugaTrak last October. How’s it going?

To my complete surprise we did not immediately achieve world domination, or much of anything for that matter. I’d talked with hundreds of potential customers leading up to the launch and had gotten great reactions, but we didn’t get any bites when ShugaTrak became available. Back in the fall when people would ask, “How are sales? Are you getting traction?” I would avoid saying that things were going great (because they weren’t) and, instead, I came up with a dodge: “Now that we’ve launched, we’re moving on to the marketing phase. You know, emailing our list, getting out there on social media, launching an AdWords campaign.”

I suspect that every startup founder feels pressure to constantly project confidence and optimism, and in some cases that’s necessary, especially if you’ve built a team that you have to keep motivated. But we haven’t built a team yet, and got tired of BSing, so I switched from saying “It’s great” when people ask to, “It’s hard.” Because it is, and I think people understand that.

Have you been just as transparent in your conversations with investors?

Even more so, because investors, both current and prospective, have a right to the straight facts more than anybody. About a year ago when I finished writing our business plan and doing our financial projections, I met with quite a few potential investors, and I hadn’t spoken with most of them since. I knew I should update them, but I wasn’t sure if the time was right since we hadn’t gotten much sales traction. Should I talk to them now, or should I wait until we had some exciting news?

I decided to go ahead, mostly as a result of reading two great posts by Mark Suster. In the first, “Invest in Lines, Not Dots,” he writes about the importance of meeting repeatedly with investors so that they can get to know you as your startup goes through its ups and downs. In the second, “Understanding the Power of Human Networks,” he lays out how to ask for a meeting with an investor and what type of meeting to ask for. So I’ve been reaching out to the investors I spoke with last year, saying that I’d like half an hour to give them an update. During the meetings, I’ve told them straight up how we’re doing. And let me tell you, I have left every single one of these meetings feeling great. And not just because I get a good feeling out of being straight with someone, but also because every person I’ve spoken with has tried to help in some way. My plan was just to give an update and hope to be listened to, yet everybody has sincerely given advice and offered to make introductions. They seem to do it reflexively, and it’s a big lift. Starting a company is a hard and constant struggle, and I’m done pretending that it isn’t. Instead I’m going to embrace it and own it.

You recently ran a crowd funding campaign. How did it go?

I had been thinking about a crowdfunding campaign for a long time, and I had talked about it several times with George, Mason, and Giulia of Ray Gun V, but I had shied away. The reason I hadn’t gone ahead with it is that a crowdfunding campaign is more than just filling out a form on Kickstartr or Indiegogo and watching the money roll in. It’s a major effort that stretches over a month or two, and it didn’t seem to be the best use of my time. Plus, other crowdfunding efforts by diabetes startups haven’t been all that successful, such as: iQuickIt, Health2Sync, and BlueLoop. However, Timesulin is an exception.

Then, Carl Aridas built a crowdfunding platform for diabetes charities and companies and contacted me to propose doing a campaign for ShugaTrak. Carl has had type 1 diabetes for 39 years, and I met him last summer at a support group meeting for adults with type 1 diabetes at the JDRF chapter in Manhattan. He made the setup easy–I provided some copy, a few images, and a link to a video. Carl chose a modest goal of $1,500, and I was okay with that. Any fundraiser knows that it’s important to get the ball rolling before you start asking people to give, so when the ShugaTrak campaign site went live on February 28, the first contributions were from me, my co-founder, and Carl. I then went to my immediate family and the best friends of ShugaTrak—our Board of Advisors and our investors. Most responded, and then I widened the circle and asked another group of long-time friends, all the while calibrating my ask by how much I believed they could contribute and how much interest they had expressed in ShugaTrak. This strategy worked well enough that by the time I was ready to put an appeal out on Facebook and our email list, we were already halfway to our goal.

The campaign ended March 31. A couple days before I sent out a final batch of emails to a final circle of contacts using the end of the campaign as a motivator. “There’s only a few days left! Help put us over the top!” This did the trick, and when it was all over, we had raised $1,695, exceeding our goal. It was a good win for us and for Carl. We were the first campaign to achieve our goal on the Diabetic Crowdfunding platform. Now, $1,695 isn’t a huge amount of money, so it won’t have a huge impact on our company, but we’re a startup with a low burn rate, so everything helps, and it has extended our runway by a healthy bit.

What insight can you provide for others who are considering launching a crowd funding campaign?

Every situation is different but, for us, here are the things we did right:

1) We set a realistic goal.

2) We built momentum by first soliciting contributions from the ShugaTrak faithful.

3) We used the end of the campaign and the goal to motivate potential contributors.

And, here are things we would do differently next time:

1) We would declare a specific purpose for the money we’re raising. All we said was, “ShugaTrak is a great thing for people with diabetes. Please help us out.” A more specific purpose to the campaign, such as, “Let’s make an iPhone version of ShugaTrak a reality” or, “Let’s make ShugaTrak compatible with five more glucose meters” has more potential to get people excited.

2) We would ask people not just to contribute but also to promote. Our crowdfunding campaign did not go viral to any extent. Almost all of the contributions came from close personal contacts in my network. Our appeals on Facebook and our email list only generated 2 or 3 of the 36 contributions. If we do this again, I’ll ask every contributor to send an appeal to his or her network.

Speaking of your plans to develop an iPhone app, how is that going?

It’s not easy, but we’ve made a ton of progress. My wife and I are using it daily; the app is live in the app store; and we’re taking pre-orders on the ShugaTrak website. We’ve finalized the design of our next-generation Bluetooth adaptor for glucose meters and will do our first production run soon. Our target market is largely made up of iPhone users, so this will really open things up for us.

What has it been like for you to launch a startup in New Haven, and in Connecticut? What advice can you offer supporters of entrepreneurs, and the entrepreneurs who are just about to take the plunge?

This is something I think about a lot. Would we be better off in a city with a more mature entrepreneurial ecosystem like Boston or New York or Silicon Valley?

In some ways, maybe yes, because those cities have so much more experience with tech startups. For instance, with support providers in Connecticut, like attorneys, accountants, and insurance agents, we raise issues they’ve never handled before. Also, those cities have previous generations of successful founders who can fund the next generation of startups. The Connecticut ecosystem has yet to achieve that sort of self-propulsion. On the other hand, we’ve received tremendous support from the city of New Haven and the state of Connecticut. We’re about to receive funding from our fifth state program! We would have died many times over without that support. Plus, The Grove and its community of like-minded people give us a great environment to work in.

Overall, I remind myself of how Steve Jobs liked to quote Wayne Gretzky: “I skate to where the puck is going to be, not where it has been.” I think the ecosystems of smaller cities like New Haven is where the puck will slide to next.

About Suzi Craig

Suzi Craig
Suzi Craig is Director of Community Development for Independent Software (www.indie-soft.com) and is leading the 2014 Startup Roadshow effort for The Whiteboard. She brings Connecticut entrepreneurs closer to each other and available startup resources, and to the compelling reasons for starting and growing a business in the state.