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Rokk3r Labs |
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December 8, 2014 Issue |
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The Most Powerful Name In Corporate News and Information |
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Collaborative Company Building and Launch Platform for Entrepreneurs |
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Chief Strategy Officer
Rokk3r Labs
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – December 8, 2014
CEOCFO: Mr. Montoya, what is the concept behind Rokk3r? Mr. Montoya: Rokk3r Labs is a unique business model and platform where entrepreneurs partner with our strategists, creatives and engineers to cobuild and launch amazing companies. The concept behind Rokk3r Labs is to provide a very hands-on, collaborative approach to company building, which is different from an incubator or an accelerator. The main philosophy is that today the concept of solitary genius does not apply anymore. Collaboration is a big part of the trick of creating a company, and there are many small, different genius ideas that are really what is needed to create a modern company. What we do is to mitigate risks of company creation by first sourcing select entrepreneurs, which skew a little bit to professionals who have experience in creating deals, having created companies, and leading successful teams. What we offer is a very strong insight into how the modern consumer, who is very sophisticated, interacts deeply with other consumers, as well as with technology and with companies. They have a very strong technological acumen in how to build these products in a timely manner, in a very robust manner, and with the right architecture to then scale. The process starts with what we call a Think Phase, which is once we have chosen the entrepreneur, we go in depth into that idea. We deconstruct it, build it and define the key drivers to make it interesting. We define if the value is in technology, pricing, revenue model or in the look and feel.
Mr. Montoya: Our model is to build a portfolio of industry transforming companies. In the current strategy, we are trying to build about 120 companies in the next five years. What we do is we exchange our services and expertise for a negotiated equity. The equity ranges between 10 and 25 percent initially, and we operate at or near cost to actually develop the product, which exhibits our deep dedication to our partners. We first create the product, we then launch it to the market, and then we help in getting additional funds for growth.
CEOCFO: How are you be different than a more traditional business development company? Mr. Montoya: For example, an accelerator will give you $25,000, space, mentors, and about three months to develop your business road map. Usually, the people who go to the incubators or accelerators are younger people with an idea. They try it out, and if it works it is great. If it does not, they will go back to the labor force or jump to another idea. Our difference is that we have a deep commitment and vested stake in the idea. Instead of having the entrepreneur build the model or the company, we build it ourselves. In a way, we call ourselves paranoic investors: I love your idea, as long as we build it together!
CEOCFO: How do you evaluate whether an entrepreneur, even though they are agreeing to this, is willing to relinquish control? Mr. Montoya: We are very up front about our offering. We understand that we are not a solution to every type of entrepreneur. Also very importantly, we are not the champion of the products. We are a partner that helps make the idea a reality, while the entrepreneur continues to lead the company, operate it, and be vested in its success. They might not have the necessary skills, or they might not want to go and create their own team, and that is why we become relevant. It has to be a very specific match. We know we are the right model for every type of entrepreneur. We are a perfect match for that entrepreneur that does not want, or does not know how to build that digital product, but wants to partner and share in the responsibilities and in the funding and growing of the company with a knowledgeable team.
CEOCFO: What is the process for finding companies, or are people coming to you? Mr. Montoya: Up to now because we are in Miami, which is a nascent ecosystem of technology, we have been lucky enough to have a lot of word of mouth advertising. In the first two years of operation, we introduced over 21 companies into our portfolio, and of those, eight have received additional capital. Now that we are in a growth stage, we are looking at finding new ideas to source entrepreneurs. We are opening an office in London and one in New York to better understand those ecosystems and see where in the process those entrepreneurs are ostracized by incubators or accelerators. We have to find them, or they have to find us. It is basically three things now, it is word of mouth, a little bit of positioning through PR, and by having for the first time a specialized sourcing team that is looking for these people throughout the world.
CEOCFO: When you are evaluating a company, what do you understand about the process? What might you look at that other companies would not consider? Mr. Montoya: For the entrepreneur, we focus on the chemistry. We have to be able to understand each other and to make decisions. With the idea, how does it really add value to the target audience in a radical way? Secondly, can we capture that value or monetize it? Those are the big two questions that we want to ask at the beginning, and that can come in different shapes or with many other specific questions. We try to go a little bit deeper than the obvious and really figure out the specific small steps or values that make it a radical idea. That is done through this process that we call the Think Phase. Here we define not only the value generation, but the specific road map to get there. There are many options I would have to create a company, and the first step is where should we launch. Should we launch with a particular feature set to prove the product-market fit? Once we have that, then we start implementing that initial strategy. We look at the entrepreneur again and then we look at the idea, and we see if it has value. We define a strategy to go to market, and that can take many different things, such as technology, feature sets, and then the growth strategy, which is how to go from zero users to 10 and then from 10 to 100 and from 100 to one million. If it is a B2C play or if it is a B2B play, how do we accelerate profit or build a sales force?
CEOCFO: You recently announced an agreement with law firm DLA Piper and Alma Partners as far as advertising. What else needs to be put in place as you start move into the international scene? Mr. Montoya: I think that the Alma partnership is relevant because it can really provide marketing expertise to our platforms, and the DLA alliance is really important because they are number two in deal making for startups and venture capital transactions. What we really need to do as time passes is to have better relationships with second-level investors or second round investors, meaning venture capitalists, super angel investors, and family offices because our model is to take a company all the way out to proof of concept and then to raise money for growth capital. To close the loop, that is what we need to really focus on from now on.
CEOCFO: Why is Rokk3r Labs noteworthy? Mr. Montoya: Essentially the opportunity. The pitch to the investment community is as follows: We understand that it is a very risky business to start companies. Hopefully, the upside is also very high. The trick is to mitigate the risk. We start by choosing the right entrepreneurs and executing a comprehensive process where we mitigate the risk without sacrificing creativity. If you are an investor, instead of having to go to the market and have to deal with 20 different teams, lawyers, and technology leads, in this case you have the security of technology, risk has been mitigated, and execution risk is very heavily lowered because of our process that we check every step of the way. Additionally, our entrepreneurs usually come with subject matter expertise to the table. Many of the reasons that companies do not survive or do not make it is because they run out of funds, which we can mitigate that risk as well. We also offer access to funding so that companies have a better way to succeed. You have a quality feel of Rokk3r Labs, and you also piggyback on the track record of Rokk3r Labs. Your chances as an investor are highly increased by mitigating the risk in each of the companies because we have developed the right processes, the economies have scaled, and the portfolio has achieved some success. |
“Rokk3r Labs is a unique business model and platform where entrepreneurs partner with our strategists, creatives and engineers to cobuild and launch amazing companies.” - Germán Montoya
Rokk3r Labs
Contact: 786-281-7987
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Germán
Montoya