A couple of years ago, a coterie of startup types hung out with Adam Fish, Chris Vermilion and John Receveur on the top floor of Gill Holland’s Green Building offices, drinking Falls City beer left over from Forge meetings.
Chris and Adam, who were developing Roobiq, a voice recognition software for businesses, left in March 2013 for Silicon Valley.
Aaron Marshall used to sit in Please & Thank You, writing code for what became his Over photo app. Aaron and his wife Nichole and son Zurich left for Capetown, South Africa, last year, though Over is still technically based in Louisville.
When Insider Louisville first set up shop in NuLu, Alex Frommeyer, Alex Curry and Dan Dyche, who founded Beam Technologies, were our neighbors.
We used to watch them solder together the beta versions of the Beam toothbrushes, the first app-connected toothbrushes. Now, Beam Technologies is headed for Columbus after receiving $5 million in A round financing from venture capital firm Drive Capital.
(This Q&A was edited for length and continuity.)
Insider Louisville: You’re from Cincinnati, originally. Northern Kentucky. You know Columbus pretty well, I’m guessing. I’m just going to say it: What does Columbus have that we ain’t got? Why are all the cool kids leaving?
Alex Frommeyer: Well, I’m going to answer this super frankly: Nothing. Actually, it has one thing: a $250 million venture capital fund called Drive Capital. And that’s the only thing it needs. I say that somewhat tongue in cheek. But Drive Capital is a major, big fucking deal.
Not just for Columbus. Not just for Ohio. But for the whole Midwest. A legitimately large fund with legitimate investors…
It’s fresh capital being deployed aggressively in very modern companies. What it’s doing is, it benefits Columbus disproportionally from it being located there. Now, if Drive Capital happened to be located in Louisville, Louisville would be getting disproportional value out of that. The makeup of the population and the talent pool and all the issues we talk about here certainly exist in Columbus as well. There’s no magic bullet, and they don’t have it. But Columbus does have this extremely compelling venture capital firm.
That is an important asset because they can take interesting companies with really talented small teams like Beam and physically bring them to their space to hire, to grow, to raise follow-on capital and release their products.
Where was Beam financially just as Drive Capital came through with the $5 million A-round?
The most important point to make here is, “This is how startups grow.” It’s a herky-jerky, terrible process. Elon Musk always jokes publicly when he talks about how close Tesla and SpaceX both came to failing … that doing a startup is like chewing glass and staring into the abyss.
Beam’s push to find the right partner that could keep us in the Midwest, or at least not take us to a coast, that could give us not just the capital but the resources we need to grow Beam the right way, and to fulfill its vision — all that took time and a ton of hustle and a ton of effort ….
It’s not at all uncommon for startups that are really doing it to have a story that’s not some elegantly clean, “We did this, and then we did that. And then we took this step forward…” That’s not how startups grow.
Without getting into proprietary information, what do you think sold (Drive Capital) on Beam. These are guys from Sequoia, and they’ve seen a lot of great stuff, and a lot of stuff that’s pointless. Next thing you know, you’re cashing a $5 million check. How the hell did that happen?
Connected health, or digital health — which we certainly are since we’re doing health related stuff — has gone from a nonexistent industry to extremely compelling in less than two years time.
Companies like Fitbit and Jawbone are leading a lot of this. Nike and Apple are rumored to be doing a lot more… Since toothbrushes are a totally ubiquitous product, we make sense inside of that story line.
Drive certainly recognized dental is one of these huge multi-multi-million dollar markets that is super fragmented and largely untouched by digital tech. So, whenever investors see big markets that haven’t been fucked with yet, they get real excited.
I can see that. There are a lot of products coming on-line.
Oral B is spending a ton of money in the connected oral care world right now. Which has been a huge help for us because it’s validated a lot of the stuff we’ve been talking about for years. It helped us sell out of the rest of the first batch of Beam brushes when they went on market.
So you have sold product. I was never sure…
We’ve been collecting revenues for 18 months, at least. Part of our strategy was to get our product out there and collect as many customers and as much market data as possible. Now we’re going to launch a whole new Beam brush and a whole new experience around that, which will be happening later this year.
I could see the combination of Bluetooth and incremental measurement would be something that would interest investors. Toothbrushes … that’s nice. But maybe there are other medical products down the line?
There’s definitely a lot more behind the curtain, I’ll say that. To be fair, we haven’t publicly discussed our full vision. But anyone who accuses Beam of being “just a toothbrush company” is about to be very surprised. Because there’s a lot, lot more happening behind the curtain.
We shouldn’t assume it will be in the form of a toothbrush. It could be other products.
This is like playing a game show ….
I will say toothbrushes make the whole thing go. That’s the critical connectivity point. You’re already doing it every day, right?
So there’s going to be an “oh, shit” moment … the people you left behind saying, “Oh my god, we never realized Beam has this vision, this product, this technology.”
A lot of people have kind of chalked us up to a silly connected toothbrush thing, and I hope they’ll at least pinch themselves awake at some point once we start talking about the full vision of the company.
I never thought the toothbrush thing was dumb. One of my closest friends is dentist, Bobby Mann, and he thought it would make a great giveaway for dental practices just because of the novelty. Not just a novelty, but a useful novelty. But still a novelty. What I’m hearing you say is, “Well, we’re going to be a product.”
I have very little interest in spending the time and effort I have to date building a company for a flash-in-the-pan trendy product. Zero interest in that. We’re going after major, major social and health impact. How we’re doing that will reveal itself over time.
Where do you stand with your original set of investors? I tried to talk with Kent (Oyler) and all those guys, and no one would talk to me. I didn’t know if they’re unhappy…
No, nothing like that. I always said that by some combination of luck and skill we have been able to curate the best group of local angel investors available in Louisville. So, I would hope based on what I know of them as people – Kent, Bill Lomicka, Ed Glasscock, Phoebe Wood – these guys are the kind of people investing in people. Who can help change the face of our local and national economy.
There are other investors who are interested in seeing a return on their investment and very little more than that. The type of investors I have would probably not just be OK with, but would want to actively invest in my next thing or one of my co-founder’s next things because they understand what they’re investing in, and why they’re investing.