Usually when a startup raises $100K, it’s not much to shake a stick at. With young companies raising tens of millions of dollars or being gobbled up in large acquisitions, why is such a small investment notable? In the case of HipChat – a startup focused on providing internal chat and IM solutions for small businesses – $100K came to them in a bit of an unconventional way, but in a way that can be a lesson to other startups.
In 2009, Elaine Wherry and Sandy Jen – two co-founders of the chat startup Meebo – were awarded with a TechFellow Award by the Founders Fund. The award allows entrepreneurs to give back to the community at large by making an investment in a startup on their behalf, and Wherry and Jen have both chosen to invest $25K in HipChat as announced today.
Founders Fund matched the investment, bringing the total to $100K – but the money is not really the main point here, says HipChat co-founder Pete Curley.
“It’s less about the amount and more about how it was given,” Curley told ReadWriteWeb. “We don’t really need funding. This is about building interesting relationships.”
The fact that fellow chat entrepreneurs from Meebo saw fit to give the entirety of their award to HipChat is a testament to the latter’s efforts to network effectively.
Curley says that getting out, meeting and befriending as many people in your industry is a great way to push the progress of your startup. He adds that he and his co-founders have been constantly in meetings with people just for the networking opportunities. As he rightly concludes, the chances of interesting things happening are much lower if you don’t actively go out and meet people.
Another lesson Curley passed on to other young startups is to set specific attainable goals for your company to strive for. He says it is important to be able to measure success or failure, and setting goals, no matter how trivial, is a good measuring stick for your progress.
Curley and his co-founders Garret Heaton and Chris Rivers developed the idea for HipChat while working for Plaxo. “The first goal was to make something that Plaxo would use and pay for. If we could do that then we knew we were on to something,” says Curley.
Now with some fresh cash, the trio seems ready to disrupt the chat space with their inexpensive small business solution. Other internal messaging services have aimed at large contacts with companies with extensive budgets, but Curley says a better solution for the little guy has been lacking. If HipChat doesn’t already help startups by providing a nifty internal chat service, it certainly does in the way it has gone about making connections and raising cash.
