JON THORNTON – SUMMARY & ACTION GUIDE
• Studied Electrical Engineering in undergrad, prior to that he’s been doing website design and web programming since his teens.
• ParkWhiz grew out of a project he did in undergrad which involved building sensor networks.
• The idea was to add sensors in front of parking meters so drivers could tell where parking spots were available, and the city could know where they needed to send enforcement to give parking tickets.
• After undergrad, he decided to start a business instead of joining grad school. Even if he wasn’t earning anything, it would still be cheaper than grad school. So he and his business partner started working on the sensor business idea.
WHY THEY PASSED ON THE FIRST IDEA
• The sensors weren’t always reliable, but manufacturing them required a lot of capital.
• Sensors also were a much bigger investment for customers. The startup would require sales and service teams as well.
• It was just a much bigger project than inexperienced entrepreneurs should have taken on.
• So they played around with a couple of other ideas and settled on the reserved parking idea because it didn’t require a lot of capital. All it required was a website.
THE PARKING RESERVATION IDEA
• If anyone’s familiar with OpenTable.com (Restaurant reservation website), it’s based directly on that.
• Parking lot owners have a console that gives them alerts when a new reservation comes in. It tells them how many parking spots to block off. On the flip side is the ParkWhiz.com website (a mobile app was added 3 years ago) for consumers where they can reserve and pay for spots.
THE EARLY DAYS
• The project started out as something that they would work on for the summer in between undergrad and graduate school. Jon didn’t take a full time job as he’d already saved up money for the summer. At the end of the summer he decided not to go to grad school so he could work on the idea.
• To earn money, he found freelance work working for ad agencies in New York.
• He would do full-time (9-to-5 business hours) for the agency for 2-3 weeks, and live off the income for about 6 weeks.
• His partner and co-founder Aashish Dalal handles sales, marketing and fundraising parts of the business, while Jon handles development.
• While Jon spent the early days hacking away to build the product, Aashish’s role was to sign up parking lots to work with the company. Aashish worked full-time on the business from they day it started.
FINDING HIS CO-FOUNDER
• The pofessor Jon was working under for the parking sensor project introduced him to his future business partner, Aashish Dalal.
• Aashish wanted to start a parking business as he felt the industry was broken. He was not a coder.
• He found one of Jon’s professor’s research papers on Google, got in touch with the professor and asked him if he would like to work together. The professor declined but introduced Aashish to Jon.
• Jon and Aashish decided to work on the sensor business idea for the summer; it didn’t seem like a big commitment, so Jon was open to doing it.
• That’s how it started, and they just never stopped working together.
FROM ONE IDEA TO THE NEXT
• They cycled through a couple of different business ideas and settled on the reserved parking idea (ParkWhiz) 8 months from the time they started. Once they had the idea, it took them 3 months to have the product live and online.
• When the sensor idea (product and business side) wasn’t coming together, they looked at what was working in other industries.
• At the time (2006), when gas prices were rising in the US there was a price comparison website called Gas Buddy where people could post the prices available at their local gas station so other people could have access to the information.
• With Gas Buddy as initial inspiration, Jon and Aashish iterated and decided on the reserved parking idea because the idea added value to both drivers and parking owners. The business charged a commission for every purchase so it was an easy way to generate income without advertising, selling leads to parking companies, etc.
• Every step of the way while building ParkWhiz, they showed the product to friends and family to get feedback. They never took a ‘heads down’ approach to building the product. They would build it for a week or two, step back and say, “Is this going in the right direction?”
FREELANCING AND BUILDING PARKWHIZ ON THE SIDE
• He got lucky – he had a few friends in school that worked in the advertising industry. There was a shortage of programmers and he got offered a project.
• He worked really hard on the project and built a reputation for himself, after which he was free to choose which projects he worked on.
• As a freelancer, your biggest asset is reliability. Produce work that clients can have confidence in, without having to check it over themselves.
• From project start date (sensor business idea) till ParkWhiz launch: $5,000 – $10,000 on legal fees.
• Legal expenditures depend on your goals. If you want to start a freedom/lifestyle or consulting business, pouring thousands of dollars in legal fees is not worth it. You can start these kinds of businesses with a simple LLC form in the United States.
• If you’re building a business that would require investors (angels, VCs), it helps to build the legal foundation right way, so spend money on legal fees.
• Website hosting (virtual server) was only $50/month.
BUILDING THEIR CUSTOMER BASE
• Target customer: people going to events – baseball games, concerts, etc. Event parking was the one area where people were buying parking passes already. So it was something people already did.
• First couple of years, they did just event parking and created a beachhead for themselves. Recently they forayed into daily downtown parking. Much more difficult to market this because it’s brand new for people.
• Event parking available all across the US. Downtown parking is available in Chicago and New York for now.
• Lead generation on the consumer/driver side is all about SEO. Choose keywords and build landing pages to rank highly for those keywords. They built landing pages for baseball, football stadiums, etc. They also augment it with paid search ads. To this day, 60-70% of their business comes from Google.
• On the parking operator side, lead generation has largely been direct sales and word of mouth. Narrowed down parking lots near stadiums can call them up. Once they signed up a few, they started getting calls from other parking lots.
• Most of mainstream coverage they get is due to existing coverage. They pitched TechCrunch and got featured. Mashable, etc. picked up on it and ran the story as well.
• They were featured on ABC News, after which Fox News reached out to them to do a similar story. This approach (targeting one organization and getting featured) is better than blasting a press release to a bunch of different news organizations.
PICKING TARGETS (GROWTH DECISIONS)
• Have a direct sales force (8 people) who focus on finding new parking lots to use ParkWhiz.
• To find new targets, they look at where the demand is – stats from Google Search of people searching for parking, population numbers, commuter numbers, etc.
WHY COMPETITION IS NOT A BAD THING
• The space is getting crowded; they have 4-5 competitors now.
• Since the product category (reserved parking) is new, it helps to have competitors to educate the market.
• ParkWhiz’s biggest asset is that because they’ve been around longer, they have the largest network of parking locations.
• Now have a team of 25
• Raised $2 million in Venture Capital funding; want to build a market in Chicago and New York.
• Once they work out the kinks in those two markets, they want to raise more money and expand to more cities in the US and internationally.
• When they started 7 years ago, the market wasn’t ready for the idea – smartphones, online commerce wasn’t as big as it is now.
• So the biggest challenge was having patience through the years, waiting for the market to pick up.
• Tip: So set yourselves up to be patient. If they’d gone and raised money in the early days, they would’ve ended up hiring a lot of people and failed, since the market wasn’t ready. Instead, they took the slow approach and only expanded when they felt the market was ready.
3 ACTIONS YOU CAN TAKE TO START A SIDE PROJECT
• Identify a problem that people have and solve that problem. If it’s a problem you have, even better.
• If you have a full-time job, carve out time to work on the side project. Toughest thing is to devote time to your side project.
• Be persistent. If something’s work doing, it’s going to take work. Otherwise everybody would already be doing it.