Let’s face it: Seattle needs more angels — the folks who can write checks to support the next-generation of entrepreneurial talent in the region.
And the best way to get more of these angels is for experienced entrepreneurs — those who’ve already met with some financial success in past endeavors — to commit some of their winnings to new business ideas.
In other words, we need more people like Andrew Wright.
The former RealNetworks executive and Smilebox founder has emerged as the leader of a soon-to-be-named angel investment firm, one in which he plans to commit cash to early-stage entrepreneurs in Seattle, San Francisco and his hometown of Toronto. The 50-year-old tech executive has already been busy at work since leaving his day job at IncrediMail about two months ago, which bought Smilebox for as much as $40 million in 2011.
Wright has bankrolled four startups, including online sports social network Fanzo; Seattle TechStars’ grad LeanPlum; Bryan Starbuck’s new startup Empower.me and a San Francisco multimedia chat startup called Pinata. The goal, he said, is to commit between $50,000 and $100,000 to early-stage startups, focusing on a few investments in the consumer Internet arena where he can add value. His goal is to work with a total of about eight or nine companies in the next 12 months.
We chatted with Wright today at the GeekWire offices before he headed to the University of Washington to give a talk about entrepreneurship. That’s obviously a topic that he cares deeply about, and one of the reasons he wanted to start his own angel investment practice.
“I am an entrepreneur. I love entrepreneurship,” said Wright. “That’s my life. ”
This time, however, rather than focusing on one project where he’s got full control, Wright plans to spread his expertise around. The creator of RealNetworks’s RealArcade gaming business says he wants to be a “partner to the CEO … not the boss of the CEO,” adding value around hiring, fundraising, product strategy, branding and vision.
“I am having a blast with it,” he says.
While angel investors such as Geoff Entress are engaged in dozens of new startup companies, Wright said he wants to take a more targeted approach, picking entrepreneurs based on their passion around an idea.
“I go on the people, and my instinct,” said Wright of his investment criteria. “The reality is that the idea is going to change and shift, and the competition is going to shift, but the question is: Does the team have a good vision, and do I feel like the team is capable of building and scaling to execute on that vision?”
It’s OK for entrepreneur’s to refine their ideas. But big pivots, while sometimes necessary, can spell trouble.
“There’s a trajectory of where you are going. There is a beacon on the horizon that you are executing to, and the path may change a little bit, but you are not changing your beacon every 15 minutes.”
Wright notes that it is very difficult for other companies to steal someone’s vision, so the key is simply to execute. “You have to focus on the customer, not the competitor,” he says. “The people who focus on the competitor or on what the investors are saying, they make mistakes.”
Wright has dabbled in angel investing over the past decade, bankrolling startups such as Liquid Planner, Big Fish Games and MiNeeds.
But, with the new venture, he plans to devote his efforts to investing full-time. Wright said that it is really hard to do a good job at angel investing, while maintaining a role as a CEO of a startup company. “You are not doing your day job,” he said. “Running a company … takes 100 percent intense focus.”
So, far, he said balancing his efforts between the companies has been like a “yo-yo” of emotions, spread between fear that the companies will fail or hit what he calls “escape velocity.”
Wright plans to test the concept over the next year, possibly recruiting other angel investors if the formula seems to be working. Eventually, he said, there’s the possibility that he’d create a small seed-stage fund where a group of angels could pool their money in order to bankroll more deals.
That’s a model similar to what Founder’s Co-op is doing, but it is largely focused in the enterprise arena. Given his background building consumer Internet experiences like Smilebox and RealArcade, Wright is focusing his efforts on consumers
He scoffs at the notion, floated recently by venture capitalist Fred Wilson and others, that the consumer Internet arena is hitting a plateau. He’s excited about the rise of mobile and tablets, as well as subscription-based back-end infrastructure services like Amazon Web Services that make it far easier for consumer entrepreneurs to scale their businesses.
“You are a consumer, is it dying?” said Wright rhetorically when asked about whether the tide is shifting to enterprise deals. He added that while there’s no shortage of competition in the consumer space, he said that’s part of what makes the challenge of building meaningful experiences so much fun.
“It is the most exciting time for consumer Internet businesses in the history of the Internet. Before, you were basically marketing to a consumer who was in their office or in their family room using their computer. Now, they’ve got the bloody device with them every second of the day. They’ve got smartphones, they’ve got tablets, and they’ve got PCs. Things have shifted from television, and things have shifted from magazines and newspapers, and everything else. And they are all going to these devices, and you have the ability to build consumer services that provide meaningful help to what they are doing day-in, day-out…. There’s great opportunities to build very interesting businesses.”