Innov865 Week is a week-long series of events, taking place September 19-23, 2016, to celebrate and showcase Knoxville as a great place for entrepreneurs to start and grow businesses. We have partnered with the Innov865 Alliance to bring you stories of innovation born in East Tennessee. Today, we’re talking to Bryan Crosby, the founder of Maryville, Tennessee-based FunLPro Technologies, which walked away a winner at last year’s Startup Day competition.
FunLPro is, in short, a no-hassle funnel. When you entered last year’s Startup Day, were you selling the product yet? What can you tell us about the company and where it is today?
I was in the process of finishing up my MBA and finalizing our sales channel development and funding strategy; we were not selling at that time. We are currently in 61 retail stores and growing every day. We have both our integrated caps (where our closure is pre-packaged onto containers and available at point of sale) and our retail caps (sold in packs as an add-on item to use in tandem with consumer packed fluid products) on the market and selling. They are selling very well and we are continuing to improve the engineering behind our integrated caps. We have been nominated by Plastics News, the biggest trade journal for packaging, for the inaugural Closures Innovation Award as one of four finalists. This will be very big exposure for us and will ensure all our major targets have seen and are aware of our cap and our IP.
What impact has your MBA and focus in entrepreneurship and innovation at the University of Tennessee made on your ability to successfully launch the company?
The curriculum within the MBA certainly helped prepare me for the task at hand. More importantly, the infrastructure and network in the city of Knoxville and between UT, UTRF, the Anderson Center and the Knoxville Entrepreneur Center allowed us to make the types of connections and relationships we needed to identify the best paths to take and how best to execute. It saved us a lot of time and money.
How important is an education like that? There’s almost something romanticized about starting a company with no higher education (or dropping out of college to do it), but where do you stand on the importance of education in entrepreneurship?
I was actually fortunate enough to receive the entrepreneurship fellowship, which meant I was able to work on my business full time outside of the curriculum requirements and have my tuition covered. There is certainly something to be said for having the vision and belief to bet on yourself as an entrepreneur and this is the case regardless of education. This is what sets entrepreneurs apart from 9-5 employees. However, I was lucky enough to be able to have unbelievable mentorship provided within the E&I program at UT—both academic and real world—and leverage my network in many ways that not many people get the opportunity to do. I can absolutely say in my case we would not be where we were today without my MBA and the experiences I had at UT. But that’s certainly not the case for everyone.
Let’s talk about winning Startup Day, which gave your company a $5,000 boost. Are there also some intangibles that come from winning something like that? Credibility with funders, motivation, something else?
Absolutely. Startup day was a tremendous experience. The timing of the competition coincided with the end of my MBA and acted for me at least as a capstone on all of the work I had done over the prior two years. It was wonderful validation. The competition required me to think through our entire model, our projections, staffing, exit strategy, and most importantly, how much cash we really needed to be able to hit our projections. We were also fortunate to have been a two-time winner of the Boyd Venture Fund at UT, winning $22,500 and honing our pitch and business plan skills. We used the $5,000 to front inventory from startup day.
How have you funded the company? The $27,500 you just mentioned, of course, but where else has funding come from?
We have also sold shares in the LLC to an angel investor in the amount of $100,000 to fund early R&D, machinery, and pay for some initial patent-related filings. We have one issued and two pending regarding IP.
What’s next for FunLPro?
Major distribution for our retail caps and continual process improvement regarding the manufacturing, supply chain management, engineering capabilities and IP management of our company.
What has been the biggest mistake you’ve made as a founder? And how did you fix it?
Not beginning to focus on our retail cap segment earlier on. Our margins on these products are very good and we are cash flow positive with even one major retail customer, whereas our integrated model is geared towards licensing agreements, which have a very long sales cycle and can be tedious from a legal standpoint to come to a mutual agreement. This model alone would require investment whereas retail model may provide us the opportunity to cash flow without additional equity sold in the company.
Will you be at this year’s Startup Day? And, what is your best piece of advice for founders who will be pitching?
Yes I will be. My advice would be to think big picture regarding what you want your company to look like. My biggest challenge has been to nail down what our organizational structure will look like one, two or five years down the road. How many employees are needed? What can you realistically outsource and be confident it will be done at a high level? Can you use brokers or distributors to act as your sales force or do you need a traditional sales model? All of these have a profound impact on cash flow (which is often overlooked of the three financial statements but without a doubt the most important of the three for a startup) and being able to tie all of that in to your funding strategy. This will give you a better idea of the nature of investment you could potentially take on so you can understand what investors are really looking for in terms of payback, timeframe and ROI, and if you’re more attractive to angels or institutional investors.