Russ: This is the BusinessMakers Show, heard here and online at thebusinessmakers.com And now it's time for another one of the BusinessMakers Dealmaker series. A real world snapshot deal review by venture capitalist, Blair Garrou, managing director of DFJ Mercury. Well Blair, it's good to have you back here at the BusinessMakers.

Blair: Thanks Russ, it's been awhile.

Russ: It has been. But I'm real excited about this one tonight. But, before we get started, why don't you share background of DFJ Mercury, and then talk a little bit about the mission of the Dealmaker series.

Blair: Sure Russ. So DFJ Mercury, we are an early-stage venture capital fund. We make investments in exciting new start-up technology companies. The Dealmaker show was a way for us to showcase some of the more interesting companies and business plans that we see through our deal review process. You know, we also hope that entrepreneurs can benefit from us interviewing entrepreneurs about some of their trials and tribulations in getting these companies off the ground.

Russ: Okay. Cool. Why don't you tell us about what deal we are going to review this morning?

Blair: Well today we've got the pleasure of profiling an Austin-based company called Moximity, and its founder, Bryan Jones. Now Moximity is a location-based service for your cell phone that visually shows you where your friends are and what activities they're doing. Bryan, welcome to the Dealmakers.

Bryan: Thanks Blair, I'm excited to be here with you and Russ today on the BusinessMakers radio show. It's quite an honor.

Blair: Well good. o kick things off, as you know, VC has always liked to have entrepreneurs give a brief elevator pitch about what they're doing. So why don't you tell us a little bit about your company, Moximity.

Bryan: Absolutely. Moximity maximizes your real world social life. By now everybody is familiar with Facebook and what a great job it does allowing you to manage your online social life. Staying up to date with what you're friends are doing, being able to poke them, hug them, and basically manage that passive social life. But that technology hasn't scaled to the real world. It's a much more complex problem; you've got people, you've got places, you've got specials and events, and putting all those together in one simple-to-use solution, that's were Moximity comes in. Think about all the times that you've been 2 blocks away from one of your best friends and didn't even know it because the technology isn't there. Think about all the times you've gone to a standby restaurant instead of trying a brand-new one just because you didn't know that five of your friends have already tried it and that the Yelp reviews are fantastic on it. Or, ending up at a happy hour that's not very great, but not knowing where else to go because that technology is not there. That's what Moximity is about. It's about getting you that information, to make sure you're in the right place at the right time with the right people, so that you can maximize your real world social life.

Blair: You know it gives new meaning to the word Smartphone, Russ.

Russ: Boy, I have to say it does!

Blair: So, you talked a little bit about Facebook. I think by now everyone knows what Facebook is, but talk about poking or hugging in Facebook and how that interaction occurs on a mobile device.

Bryan: Right, so essentially, on Facebook it is what we consider a passive management of your social life, and what poking and hugging does is it tries to make that a little more active, where you can poke one of your friends and say "Hey, I haven't from you" kind of a real world nudge. "Hey Blair, it's been awhile since you updated your page." Or, "Hey Blair, I'm going to share a hug with you." And try to make that a little more of an active relationship from a passive one.

Blair: And so you can do that nudge now on your phone, where I guess it vibrates or does something.

Bryan: You can do that on your phone or you can do it online through the main Facebook site.

Blair: Gotcha. And then you talked a little bit about the company called Yelp. Why don't you talk about them and how you interact with Yelp.

Bryan: So Yelp is similar to Citysearch, where it allows people to crowd source reviews, where a bunch of people anonymously can create a community, and when they go to a new place, whether it's a restaurant, a bar, a barber shop, a flower shop, any of those type of places, and they can leave a review, so that if you, as a consumer, have never been to one of those locations you can go to Yelp and find out what a bunch of people that you may, or may not know have written about them in the past.

Blair: Very cool, and I see the similarity of overlaying that with kind of a location-based service application that you've made for the mobile device. And thinking about kids and malls, or individuals on colleges campuses and finding people. That's really, really interesting. You know we've seen a number of deals that are kind of location-based services for the I-phone and other mobile devices. Probably the most popular that people have heard of is a company called Looped. And I think it was featured prominently in an I-phone commercial. Talk a little bit about how you differentiate against Loop and how you're kind of competing with those guys.

Bryan: Loop was very, like you mentioned, prominently featured on the I-phone commercials, and a lot of people asked us "Well, is that what you guys do?" or "Is that you?" And it's not us, and it's similar to what we do, but I think there are enough reasons that differentiate us that people won't necessarily completely confuse us and Loop going forward. What Loop does very well is allow people to essentially do the status updates, like they do on Facebook or Twitter, but allow them to be geo-locations. So instead of it just being "I'm washing my dog." It's "I'm washing my dog at this pet grooming salon."

Blair: Which is very important to know, by the way.

Russ: Absolutely.

Bryan: Exactly. And so, you know, all of a sudden it takes it just a step further. Now there's actually a location where you can see exactly what part of Houston they're in doing that activity.

Blair: Right.

Bryan: And so it's very much focused on the here and now. What are your friends doing at that specific moment? What Moximity tries to do is really span that time continuum and allow you to see not only where your friends are right now, but also influencing your behaviors based on past behaviors of your friends. The implicit reviews of where your friends have gone and being able to unlock that information at you go forward is very valuable in terms of determining where you're going to go and what you're going to do.

Blair: So if I'm traveling in New York City and I'm in, say, Soho, you know, per se, and I'm walking down the street and I want to find a good restaurant, I can actually use Moximity to find reviews or places that my friends have been before, not necessarily at that point in time?

Bryan: Right, and that's where Moximity comes in so that you can actually take the people that you trust, the people that you know their backgrounds, their biases, and maybe something like "All right, I know that Blair doesn't have very good taste in steak, but has great taste in Mexican food, so if Blair was recommending a steak place that's nearby, I'm going to take that with a grain of salt. But, if it's a Mexican food place, that sounds like a great place to try."

Russ: Okay, we're gonna be back with some more on this cool mobile social technology, as I am here doing a Dealmaker series with Blair Garrou, managing director of DFJ Mercury and Bryan Jones, founder of Moximity. You're listening to the BusinessMaker show, heard here and online at thebusinessmakers.com

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Russ: This is the BusinessMakers Show, heard here and online at thebusinessmakers.com. And continuing on with our Dealmaker series, with Blair Garrou, managing director of DFJ Mercury, giving a snapshot review of Moximity, with the founder, Bryan Jones. Continue on Blair.

Blair: Thanks Russ. Let's talk a little bit more about the software application that you've made. So, you've launched the software product on the I-phone.

Bryan: That's right.

Blair: And I guess, you know, everyone that doesn't know the I-phone, has an apps store that you can access from the phone directly, and so people can actually access Moximity directly from their phone and download it.

Bryan: That's correct. Back in September we actually launched the Moximity I-phone application through the Apple I-phone apps store, and the apps store has been a fantastic evolution of the mobile device and the Smartphone. Right now, there's over 10,000 apps that people can download onto their I-phone, which is just an amazing number. What's even more amazing is that there's been over a million downloads of those apps already. To put that in context, that's only over the last 6 months.

Blair: Now when people download your application, is it free? Or does it cost them something?

Bryan: It is a free application. It is advertising-supported, which is one of the reasons that we're able to have something free. But it's also one of the other differentiators that we have is that we are able to use those advertisings to allow our users to get information that otherwise wouldn't be normally relevant, concerts that may be sold out, but all of a sudden have extra tickets that are now 25% off because the concert's tonight. Or, a special that all of a sudden is happening at 5:30 and the happy hour is just across the street.

Blair: So you're taking a kind of direct advertiser and providing almost location-based advertising.

Bryan: Right, meaningful and relevant advertisers to those users.

Blair: Now talk a little bit about when you developed the application for the I-phone. I'm sure you looked at other devices. How did you go through that process?

Bryan: Well the I-phone was one of the first Smartphones that allows companies to develop and directly place their applications on the phone, without going through a lot of other red tape, such as going through the carriers, etc. And it's a pretty complex process.

Blair: And how did you get approved for the apps store? What is that process?

Bryan: So, what happens is when you decide you're going to launch an application on the I-phone apps store, you download a certificate and apply for recognition by Apple as an approved I-phone app developer.

Blair: Okay.

Bryan: At that point, you can download the software development kit, which is essentially a large chunk of software that makes it pretty easy to develop on the I-phone. Once you've kind of developed that application for the I-phone, you do what's called "ad hoc distribution" where you have a bunch of your friends testing to make sure that it's safe to download on their phones and it works the way it's supposed to. At that point, you submit the code back to Apple, where they go through a review process and make sure that the code is not malicious and does what it actually says it does. And at some point, they will approve you, you fill out some more paperwork, and eventually the app ends up on the apps store.

Blair: Okay. So talk a little bit about your team. How big is your team?

Bryan: I'm one of the founders, and there are actually two other co-founders with me. Bill is our chief technical officer and he's got a great technical background on building apps. Chris Duncan is the other founder, and he's our creative designer, making sure that the application flows very easy for our users. And we actually have one advisor that has joined us full-time, Monica Sanchez, helping us on the advertising and sales aspect.

Russ: Bryan, obviously this thing is geographically-based. And you're early stage, what's the usage like today? Are you statewide? National?

Bryan: So right now, being Austin-based, we are focused on the Austin market, expanding later this quarter to go statewide.

Russ: Okay.

Bryan: And our plan is to really make sure that, as we expand geographically, that we have not only content, but also a lot of information that makes it very relevant and useful, even if you don't have a lot of friends using Moximity.

Russ: Okay.

Blair: Now, have you found, because you're location-specific in your launch, that it's been easier to find those direct advertisers?

Bryan: It is. But it's also one of these things where because of us being focused on one location, we're actually turning down a lot of advertisers that are looking to advertise that were not in that market. So it helps and hurts, because we're able to say we are in this market, we have a lot of very highly motivated people in the Austin area that want to advertise with us, but there's a lot of people around the country that would like to advertise with us that we're turning down, saying "we're just not in your market yet."

Blair: Now you talked a little bit about the background of your team, but talk a little bit about yourself. You know Russ, one of the reasons I wanted to bring Bryan on the show is in his past he has not only been a very accomplished lawyer--

Russ: Yeah

Blair: But also a world-class swimmer. So--

Russ: Wow!

Blair: Talk a little bit about your background Bryan.

Bryan: Well, you kind of put me on the spot here, I did swim professionally for several years after competing in college for the University of Texas, and was fortunate to represent the United States in quite a few international competitions, including world championships and goodwill games and PanPacs, holding, at one point, a long time ago, American world records. Based on that, I was able to get into law school and MBA school at the University of Texas, graduated, practiced law for several years at the largest law firm in the world, which is now DLA Piper, and about a year ago, decided that it was time to jump back into being an entrepreneur and made the leap.

Blair: That's a pretty big leap.

Bryan: Yeah it is a big leap.

Russ: Yeah, quite a background. Even that swimming thing is significant. Gee, we'll put you in our successful athlete category too. Wow cool! That's really cool! I really appreciate you guys coming in and doing this. I want you to stick around Blair, because I want to hear your perspective on the real snapshot review. Bryan, thank you a whole lot for telling your story here at the BusinessMakers show.

Bryan: Well Russ, thanks again to you and Blair for having me on the show. It was a very great opportunity for us to share the Moximity story.

Blair: Hey Bryan, one more thing before you leave, why don't you give everybody the website where they can go learn more about your company.

Russ: You bet.

Bryan: Absolutely, they go to www.moximity.com

Russ: Okay, that's Bryan Jones the founder of Moximity, and I'm going to be back with Blair Garrou of DVJ Mercury, to hear his perspective on Moximity after this. You're listening to the BusinessMakers Show, heard here and online at thebusinessmakers.com.

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Russ: This is the BusinessMakers Show,. heard here and online at thebusinessmakers.com, and continuing on with the BusinessMakers Dealmaker series, with Blair Garrou, managing director of DFJ Mercury. Well, boy I gotta tell you, Moximity is out there. I'm curious to hear what you think.

Blair: Oh I think this is a really interesting deal, Russ. You know, kind of walking through our hit list of what we look at. You know, first and foremost kind of the product or the service. You know, I really that these location-based services on Smartphones, you know, the I-phone, the Blackberry, you know, the Google Android, that people have heard about.

Russ: Right.

Blair: You know they are going to explode over the coming years and we see Moximity as kind of an early mover in this category.

Russ: Right.

Blair: You know one thing that Bryan touched on but we had the opportunity dive in more when we had his business plan is what his business model is going to be, kind of the path to monetization, as we call it.

Russ: Right. Advertising isn't it?

Blair: Advertising, okay, but you know, think about it, they've got a compelling way to monetize a localized events. These social interactions?

Russ: Right.

Blair: And this is what the direct advertiser, you know, they have traditionally gone into yellow pages or newspapers. These are the type of avenues that they're looking for. And I think in the fact that they're starting small, start with Austin. You know, I think they actually did their formal launch on the UT campus. Advertised there, grow out of that market place and move into others. I think that's a really interesting to do that.

Russ: You know, I think that, to me, location-based advertising ought to be a sort of a good competitive advantage. I mean when you're competing against regular traditional advertising, being able to pinpoint those in your neighborhood seems to me to be a good, easy sale.

Blair: Oh yeah, and these advertisers want to see a quick return on investment, and doing that within a certain market place. It seems like they'll get some good data to be able to launch it out.

Russ: Cool.

Blair: Now, that being said, the competition is pretty fierce. You know Looped has gotten very big.

Russ: Right.

Blair: Pretty ubiquitous. They are big on every phone. But these guys have some really nice features, and I think their business model will allow them to continue to grow and succeed. But, probably most importantly though is I haven't known Bryan for very long, but think about his background. You know he's a lawyer, by trade.

Russ: Right, right.

Blair: So very creative, very iterative, you know, highly intelligent. But the fact that he was a world-class swimmer, I mean, he's a winner. You know, highly competitive. So I'd put this guy up against anybody.

Russ: Geez, I mean to go through what you have to do, the training and preparation, and the discipline required. Geez.

Blair: Yeah the first thing entrepreneurs have to be willing to do is work long hours.

Russ: Right, right.

Blair: And I think this guy has done that, both as a world-class swimmer and as a corporate attorney.

Russ: Right, right, well cool. I totally agree with that for sure.

Blair: You know I think it's going to be interesting for them to raise money in this environment.

Russ: Sure.

Blair: They'll be able to move forward and have some successes, but I hope that the fund-raising environment really improves when they need to go out to raise that big round of capital. Because, you know, growing outside of Austin and moving into some other communities, they'll be able to do that pretty well, but this is really a product I think needs to have national scope eventually, because it's really interesting and really useful.

Russ: And so the requirement of capital would be mostly in the area of marketing, I would assume.

Blair: Expanding sales and marketing, yeah.

Russ: Right.

Blair: And I think Moximity is a winner.

Russ: Great. Well, Blair I really appreciate you coming in and we need to do another Dealmaker series soon.

Blair: Sounds good Russ.

Russ: Been speaking with Blair Garrou, managing director of DFJ Mercury, and doing another one of the Business Maker's Dealmaker series, where Blair gave us a snapshot deal review of Moximity. You're listening to the BusinessMakers Show,. heard here and online at thebusinessmakers.com