People commonly ask,”What did we do before Google Maps?” Well, the short answer is we used a map, or hoped whomever was giving us directions knew where they were going. It’s now 2017 and most people have access to a smart phone or internet connection to detail what roads to take, or avenues to bypass when driving. But what about us big city folk, or avid sight-seeing travelers, that rely on our feet to navigate through the world. Sometimes signs aren’t visible, or linguistic characters aren’t easy for our native tongue mind to decipher…for many years we just prayed it said,”in 500 feet, turn left into that dark alley.” Fortunately, thanks to Walc, that’s no longer an issue.
Founder and CEO of Walc, Allison McGuire, found a hole in the sphere of navigation and filled it with an application that addresses issues of modern society. In lieu of turning left in 500 feet, with Walc, we’re turning left at the Starbucks next to Citibank. By using landmarks, we’re no longer missing the world around us by steadily staring down at our phones, but we’re taking in communities on the way to our final destination. A couple weeks ago, I met up with Allison to talk Walc, raising funds as a woman in tech, and her thoughts on women today.
Side-note: This is a two parter chock full of information beneficial to everyone, especially those in the start-up realm. The second post goes live Friday, so set your reminders!
How did the idea come about for Walc?
So I grew up in Los Angeles driving, where people don’t really walk, but I moved to Boston for university and while I was there, I started walking because it was free and the subway there costs money. I was a broke college student, started walking to and from classes, across the bridge, and then from there I moved to London and continued walking. Seeing the city, seeing how different communities came together. After that, I moved to Washington, D.C., and walked all the time. To and from work, 40 minute walk one way, but I loved it. It was a great way to get exercise, great for the environment, all these things. What I found was that I couldn’t find an app that could both get me from Point A to Point B and empower me to explore in the way that I wanted. So I did a lot of research, couldn’t find anything. Pitched at a lean startup machine, boot camp event, won, was really surprised, and then interviewed hundreds and then thousands of people and then found out that this wasn’t just a problem that I had. So driving, navigation, becoming increasingly sophisticated and the same not true for walking surprised me. I told everybody that I knew about it and this idea that I had, and a former colleague of mine said she wanted to invest. And I didn’t know I was raising money but it was a great opportunity to think about, “Okay, maybe this is real,” and gave me some validation. I ended up raising my first infusion of capital, which was $100,000. Quit my job, moved to New York, thought that was a lot of money and didn’t realize New York … $100,000 is nothing.
And then from there, created my first walking app, which was based on people’s experiences of city streets in real time. From there, that was a massive success failure. Success in that our stats were crazy, half a million people using it in six months with no paid marketing or P.R. We had about 70% of our users were creating content every day, and were checking the app every day to see what had changed around them. The failure part was in the fact that the press picked it up and created a narrative around what we were building. So I don’t know if you’re familiar with a little publication called Gawker, but they wrote a story and it said, “Smiling White People Create App to Avoid Black People,” and led with a picture of my face.
(laughs) Oh my God.
Yeah. So … that was surprising. I was really defensive about it for about six months, like, “No, you’re missing the point,” and being on the defensive on the media doesn’t really work. Then I took some stock as to what we did right and where we made mistakes. We did make a lot of mistakes, and how could we make the ultimate walking app. Walc was born out of the idea of taking kind of the real time experiences and making them a better experience for our users but in addition building the underlying technology that people use to walk. If we say, “Walk toward Chase bank, make a right at Starbucks,” people navigate confidently. That’s how people have been navigating for centuries.
So, Walc was your second app?
It’s my second app. The company owns both. We’ve been around for about a year and half but I’ve been working in pedestrian navigation for about three and a half, four years. I’m obsessed with walking as you can see, I’m walking in these heels.
Have you come upon any problems being a woman in the whole tech world?
How much time do you have? Yeah, definitely. It’s funny because nobody sits you down and says, “Well you’re a woman, so you can’t do this,” but I’ve definitely gotten my fair share of side comments or people staring at my chest or people saying that I look like I’m going on a date or things like that. The biggest problem that I have found as a woman is raising money. A lot of investors will say, “Hey bet on the person,” so I get much of the time, “Hey, you’re a super investible person, but we’re not going to invest because,” whatever reason. It seems like they make up reasons and they say, “Google can do this.” But they’re not doing it and also Apple and Google don’t do social, and that’s a key element of what we’re building now. You know, that aside, what I’ve found is that by connecting with other women, in particular women of color, who’ve had a hard time raising cash, thinking about what are some other ways we can bring in revenue and think about collaborating all these problems together. A friend of mine finally decided to not raise any more money because she was having such a hard time. She, and not telling her story entirely, but she ended up going on to raise $7.2 million by an ICO.
No way!
So that’s great and that’s amazing and we might end up doing that too, although I’ve raised a million dollars but that took a long time. And now we’re going out for our next raise of two million dollars.
So what is the difference with an ICO and how you raise money?
An ICO is using block chain technology and block chain is the newest, hottest technology that people are getting on board with. It’s what bitcoin is built off of. For example, if you think about you having your medical records, my friend’s company. You think about having your medical records in a file somewhere that’s stored on the cloud, right? If that cloud is hacked, then all of your medical records become available to anyone. Instead what you can do is build it on block chain which means it sits across many different servers, so if one server is hacked, it doesn’t have all the information because it’s been stored in all these different places. Kind of pieces it out in a way. And they can pull it down and have that one file.
Oh wow. That’s so smart. So quickly going back to the investing question…. Have you had difficulties even with women who are investors, who don’t want to take a risk on another woman?
Yeah there are a lot of female investors whose thesis is “invest in women,” or something like that. And I’ve found that women can actually sometimes be harder than men because they don’t want to take a chance on a woman and then have that risk fail and then be representative of all women. I understand that, that is a dilemma, but a lot of times women get the classic, “Let me go talk to my wife about this,” when you pitch them on your company. And I get that a lot because people say, “Oh I’m a man, I don’t have directions based on visual cues. I know which way is north and south.” Then I have other men who come up to me after I speak at conferences and say, “Thank you for making this.” Like it’s a secret because they feel emasculated if they were to admit that. So yeah, raising money from women can be as hard as raising money from men. There are fewer women than there are in men in terms of the investment world, but from the angel side, and on the venture capital side, especially on the venture capitalist side … it can be hard to just get in touch with those people.
What is the difference between venture capitalists and angel investors?
Angel investors are individuals with high net worth and they have to meet the SEC’s guidelines of what an accredited investor is; and that’s somebody who makes over $200,000 a year for the past two years and expects to make the same next year. If they invest as a couple, then they’ve made over $300,000 a year for the past two years and expect to make the same. Or they have a million dollars in assets and I believe it’s liquid assets; it can’t be your house or something. They are slightly antiquated rules the SEC has; they don’t let anybody really invest in a startup like mine. So that’s the angel investor side.
Then the venture capitalist side, is people who work for a fund. That fund is made up of money that comes in through limited partners. So it’s a bunch of angel investors who put their money into a fund and then employees of that fund, and sometimes the limited partners, work for that fund. They figure out how to deploy that capital. They have different expectations in terms of life cycles. Life cycles of funds can be a number of years but they expect to get a return of their investment, which is why you’ll have venture capitalists pushing to grow faster and sell faster. Some venture capitalists want to see you grow to the point where you IPO, it just depends. Then angel investors typically are throwing their money down in the very early stages, saying, “Well this might go into a black hole but I believe in this person.” Or if they’re later on, they put in more money than they have different expectations along the lines of venture capitalists.
And you mentioned that angel investors, some of them can’t invest as part of yours. Are there different levels of startups?
Oh I mean Angel investors who do not meet the SEC criteria can’t invest in startups like ours because we seek venture capital funding down the road. And venture capitalists won’t invest in anything where non-accredited investors are investing.
Oh okay. There are so many different stipulations.
Many, many! There are also corporate investments. So if your company provides a value to another massive corporation, you should look at pitching to have those companies invest in you. Because a lot of times these companies won’t build out the technology themselves and can get a benefit from you. So if they invest in you, they get right of first refusal on investing services or whatever it may be.
So for now Walc is only U.S. based?
Actually, we are worldwide. I’ve used the app in Bogota, Colombia. I’ve used it in Paris, France. I’ve used it in London, in Marrakech, in Italy. We’ve done a lot of research and development in Venice, Italy, and Paris, France. Not terrible places to do R&D. But the idea is that these are fundamentally walkable cities and are built for walking. So if we can work there, we can work anywhere. And so in other words, we’re using the app all over the world out of 196 countries right now the Walc app is being used in 149.
Oh whoa!
Yeah. I don’t know anyone Uzbekistan, but they are using it there. So there you go. Brings a tear to my eye, because I don’t even know where people are finding us because we haven’t done any publicity. The app that exists today is the technology at work. We’re focused on improving the technology to make sure it works before we do a big public launch, which will be around our version 2.0, which will come out in the next few months after we close out this round of financing.
And there’s no advertising on it?
Not yet. McDonald’s paid us just under $50,000 to begin research and development on what we call the “Walk-in feature.” And what that is, is “Turn right at McDonald’s, by the way here’s a free coffee.” So it’s really easy if you like Starbucks. If you like whatever brands you’re a fan of. They have the opportunity to convert foot traffic into sales and you have the opportunity to get a cool deal on a place you would have gone in anyway.
Do you ever feel that sometimes people who are in your position in the startup world, as they get bigger and bigger they sort of become disconnected from, not necessarily society needs, but they start basing everything off of what their circle of friends need. Just because I really want to invest in these companies like Casper and other startups you like, and I’m like, “But what about the have-nots who want to be a part of that?” So a woman who owns this startup that’s now great, she gave me this link, I think it was called Equity Zen or something like that and the minimum investment was $20,000. I was like, “If I had $20,000 I wouldn’t be in New York right now, ” you know what I mean? So it’s just like that disconnect that you would think that I, or others, just have that money to invest.
It sounds like a disconnect on two fronts. One is being a regular person wanting to make an investment in a tech startup. Friends of mine said, “We want to invest $1,000 in you.” These were longtime friends with not a lot of money. I almost cried because it was so moving that they would want to invest. However, when it came down to it they didn’t meet the criteria of an accredited investor so I couldn’t take their money. It was sad and they feel like they lost out. I’ve had that happen with a few people. The disconnect is every day humans want to take the risk and we don’t need the government to tell us, “Oh you can’t actually take this risk.” The good news is that’s changing. Obama changed the law in a number of ways there, but there’s still a lot of work to be done. That’s where ICOs tend to be really helpful because anybody can put money into a company via blockchain technology by buying