Toledo technology firm gets big-time mentoring

Owners invited to Silicon Valley program

6/12/2014

Varner

A Toledo technology start-up firm has been chosen to take part in a prestigious Silicon Valley mentorship program that has helped nurture some of the tech industry’s bigger success stories.

Roost, a two-year old local company that focuses on Web and Web browser “push” notification technology, is one of 80 start-ups selected by Y Combinator of Mountain View, Calif., to receive its help.

“It’s hard to imagine this kind of opportunity for a start-up. You cannot buy this opportunity. Each day is like a month’s worth of learning,” said Toledoan Tim Varner, one of Roost’s three co-founders.

In business parlance, Y Combinator is a “seed accelerator.” Y Combinator brings start-up owners and staff to its Silicon Valley headquarters, where Y Combinator puts them through a three-month boot camp with a focus on determining the best use for their products and growing their companies.

At the program’s end, the start-ups present their fully developed products at a Y Combinator “Demo Day” attended by several hundred private investors.

“We wanted to seek a round of funding in the fall. But raising capital is very difficult. It takes tremendous time and energy,” Mr. Varner said.

“But now we are spending our precious time on building our product, and we won’t have to go knocking on doors.”

Y Combinator consistently has been named the top start-up incubator by Forbes magazine. Its graduates have an average value of $45.2 million, and the combined value of its graduates was more than $20 billion, according to Bloomberg News.

Alumni of the incubator program include social networking news site Reddit, digital library service Scribd, online storage site Dropbox, game company Zynga, and travel booking site Airbnb.

“There’s 5 or 10 accelerators that anyone would be privileged to attend, and certainly Y Combinator is the [top] of that list,” Mr. Varner said.

Roost’s founders began their immersion into the accelerator program on June 1 and will remain there through August. The company’s two full-time staffers joined them this week.

Founded in 2005 by venture capitalist Paul Graham, Y Combinator matches participants with successful entrepreneurs and other experts in the tech industry. It is known for its weekly dinners at which top industry figures give hands-on instruction.

Y Combinator also gives participants $120,000 in exchange for 7 percent of their firm. Y Combinator gets thousands of applicants annually, but typically only accepts 60 to 80 start-ups per session — firms that it feels have the best chance of making it big.

“They are regarded as best incubator program around. It’s a pretty big deal that [Roost] got in,” said Bob Savage, Jr., president of the Rocket Ventures Fund, the venture-capital fund owned by the Regional Growth Partnership. Rocket Ventures has invested $300,000 over the last 18 months in Roost, which until recently was known as Notice Software.

Mr. Savage said that, to his knowledge, no other Ohio company has been mentored by Y Combinator. “Of our five sister organizations around the state, we’ll be the only one around the state to say that one of our companies got into Y Combinator,” he said.

Roost is working out of the Launch Pad incubator at the University of Toledo.

Mr. Varner, 35, a Bowling Green State University graduate with an expertise in digital marketing, helped start Roost in 2011 when he met co-founders Burton Miller, 48, and Casey Haakenson, 35, while the latter two were living in Seattle.

Mr. Miller and Mr. Haakenson had an idea to develop “push” technology, which previously only existed for mobile phones apps and certain electronic devices, that would work on the World Wide Web.

“Push” technology refers to notices sent to users by an application. Mr. Varner said Roost is developing “push” software for use by Web site operators.

Its product would let someone browsing a Web site to be sent more information on certain topics based on preferences. The Web site would automatically update its content to reflect the topics the user wants.

Mr. Varner convinced his fellow co-founders to move their start-up to Toledo in late 2012, and last year their idea was backed by Rocket Ventures.

Earlier this year they filled out an application for Y Combinator on a whim, not really expecting to be selected, Mr. Varner said.

“We really believe in what we’re building. ‘Push’ will be the primary way people will receive Web content in the future,” he said. “But they get literally thousands of applicants. We thought they might be interested in us, and they were. But we were surprised, statistically speaking, that we got in.”

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.