(Chip): We have aggressive growth plans for this year—in fact, we increased headcount 7% today—but it’s mostly about serving (many) more customers with an (always-getting-better) research platform.
(Dugan): Fundraising for our Series A, and (achieving) $2MM in booked revenue – which would be a HUGE increase over 2019 revenue. We are also releasing v2 of our platform in January which is going to be a major improvement over v1.
(B): This year we are focused on amplification; growing the number of grocery stores on our platform, our sales capabilities and ensuring our technology adapts to the (consistently growing) needs of smaller grocery store owners and consumers.
(Chip): The election won’t have a big impact on us, though our platform is an interesting tool for political researchers to understand why the electorate feels the way it does—so savvy operatives may want to work with us.
(Dugan): The presidential election creates uncertainty (as does war, a bad economy, the mashed potato bar at Stanley's-RIP-, etc.), which typically causes investors to pull back on investment and makes it more difficult for startups to raise capital. This mostly affects the HNW / Angel market but also trickles up to the institutional markets as well. I'm not overly concerned about this as there are a lot of VCs that have raised funds in the last couple of years and need to deploy capital.
It also concerns me on the corporate side, as companies' behavior (spending, buying decisions) is heavily affected by tax legislation, which is dictated by the reigning political party, In the last election, until companies knew who was going to be sitting in the White House and where corporate taxes were going, spending and decision making seemed to grind to a halt. As a startup who is selling into large enterprises this heavily affects our sales cycle.
(B): For us, we are somewhat sensitive to national politics. The trade war (directly) impacts prices of goods that many of our grocers sell.
(Chip): We don’t need funding at the moment, but as our strategy evolves, we always consider opportunities. The market is strong, and we are doing well, so it’s always wise to keep an eye out.
(Dugan): In 2020 we plan to close out our $2.5mm Series A round giving us the runway to convert our current sales pipeline and improve our corporate and tech infrastructure in order to scale faster, as well as increase headcount. In 2H 2020 we plan to raise a $5mm-$8mm Series B round to further increase our headcount to support our revenue growth. Round will be mostly to increase FTE headcount in sales, customer success and software development.
(B): Coming out of the Food Foundry Accelerator we will be seeking additional seed funding. We hope to invest that money into hiring engineers, hardware, a marketing & sales lead.
(Chip): The biggest challenges in tech are ALWAYS growth and culture. You can’t be successful if you aren’t growing; and you can’t grow sustainably if you don’t care for your culture. Of course, growth is driven by a broad range of actions (product-and-sales-and-service, etc.), but growth has to be the frame for what you do – and if caring for your culture isn’t consuming half your emotional time and energy, you probably aren’t attending to (caring for) your culture.
(David): Being a people focused leader, my answer has to be the “war on talent”. But truthfully, I do feel as if there is an escalating battle between small and large tech companies. Talented technology professionals are being aggressively pursued to join the “big guys” leaving the start-up communities understaffed, struggling to grow and retain that talent. Thankfully, smaller tech firms have several value propositions that once identified, they can rely on to find the right fit talent to thrive in and support the success of their business.
(Dugan): Typical of the startup world, #1 challenge is fundraising, and #2 is sales; particularly at the enterprise level we are selling into as it can be a long sales cycle. You need to have the capital to survive the path to success.
(B): Our two major challenges will be culturally focused, appropriate growth, and recruiting diverse talent to support this growth.
(David): The creative collaboration and support that in permeating the start-up environment. I have been fortunate to experience first-hand, inspiring examples of people and companies working together to solve some really large challenges. When people let down their guard, focus on a cause bigger than the success within your four walls, great things can happen for all.
(B): Chicago is internationally known for food; from the meat packing history to our world class restaurants. I am excited about leveraging the city’s immigrant-friendly reputation and its food history with technology – highlighting a grossly underserved segment of our community.
(Dugan): This is going to be CatalystXL's breakout year in terms of getting our product into the market and growing revenue into the 7 figures. When we close our Series B later this year, I will celebrate…for a day or 2, maybe 3, and then get back to work. And-- I'm excited for the political election to be over; because regardless of who wins it should take uncertainty out of the market.
(Chip): “Hopefully, up. But worried about the city and state’s barrage of regulations and taxes. From the (anti-tech) cloud tax to (rising) property taxes to the (skyrocketing) price of a downtown Uber trip—not to mention the (economy-killing) prospect of a progressive income tax for the state—it’s becoming untenable.”
(Laurence): “A significant funding gap has emerged not only in Chicago, but nationwide for investing in engineering and science-driven innovation. Along with a few peers, we are all addressing that gap—investing in entrepreneurs tackling big problems.”
(David): The impact of focusing on building a people and product first business over a profit first business. Although important in all businesses, the heightened competition of both the talent and innovation/market penetration in the tech industry makes this approach a requirement for success. Tech companies that prioritize the focus on building a strong culture of performance, accountability and collaboration combined with an innovative end user product obsession will outperform their peers who are constantly staring at the bottom line.
(Dugan): “In general I think the tech market in Chicago will continue to be a slow burn in a positive way, slowly improving over the next 12 months. I don't see it suddenly taking off any time in the near future, or ever for that matter. I don't think it will ever catch up to the coasts, which is fine. It's still a great place to start and grow a tech company if you have access to capital and can find good employees.
From a capital perspective it's improving very slowly, I can still count the number of quality VCs in Chicago (or even the Midwest) on one hand, maybe 2, and there doesn't seem to be many new VCs popping up. But even if you add up all of the VC in Chicago, it's not even a drop in the bucket compared to the West Coast cities, or the East Coast (NYC / Boston). Chicago is first and foremost and private equity town which drives the low risk investment culture here. I feel like some VCs really behave “PE light” firms; they want you to have millions in revenue and be profitable. They don't have the appetite for early-stage risk…
I believe the human capital in Chicago's tech market is way ahead of- and improving faster than the capital market here. As an executive who has been growing tech companies and constantly hiring for the last six years, it definitely feels like a candidate's market even with the increasing amount of talent here. I talked to a friend recently who runs a large staffing company in Chicago, and the rate at which employees quit without having another job is at an all-time high. However, to my earlier point, we've been able to find some great hires over the past twelve months; you just have to go in knowing you're going to pay market rate (or above). That, and you need to rely heavily on your current employees' network, or a recruiter; the latter of which quickly gets expensive but is an efficient way to find good candidates- and quickly.
My last point, the city and state need to stop making it harder for small companies in Chicago and in Illinois. We struggle every day/week/year to survive, and the more expensive you make it to operate a business here, the harder you make it to operate and grow a business here. The Chicago Lease Tax comes to mind. But what scares me even more is the "head tax" that seems to be getting more popular on the West Coast. I think it's ridiculous that for every job a company creates, and employee it currently has, that it would have to pay tax…Anyone can work from anywhere these days. My aunt writes code for Citibank from a sailboat in Palau – and the weather there is slightly nicer than Chicago's weather...
(B): I see the Chicago Tech becoming a bowl of gumbo… disparate parts of the community working together and congealing. Chicago has been overlooked for some time. I see the tech scene in the city looking inward, redefining tech and how it can work for people.