Jenny Zeszut knows what it’s like when things don’t go as planned.
Today, Zeszut is the CEO of Beckon, a two-and-a-half-year-old San Francisco-based marketing analytics software company that helps customers like Converse, Nokia, and BSkyb transform messy data inputs into useful insights about their marketing efforts.
But Zeszut’s future didn’t always look so rosy. Back in 2006, Zeszut cofounded Scout Labs, among the first startups to harness social media as a tool for companies looking to better understand and engage their customers. Writing for TechCrunch in 2007, Michael Arrington called it “one of the more interesting startups” to launch that year.
The problem was, Scout Labs was growing up inside Minor Ventures, a venture fund started by CNet founder Halsey Minor. Minor’s expensive tastes coupled with the economic meltdown of 2008 were bankrupting him and making it impossible for Scout to pay its growing number of employees. More, his involvement made raising capital from other investors more difficult, suggests Zeszut. (Minor has famously battled with many VCs in the past.)
When Javelin Ventures and El Dorado Ventures stepped in to give Scout a lifeline, Zeszut was relieved. In 2010, when an opportunity arose to sell the company, she seized it. (Lithium Technologies paid $20 million to $25 million for Scout, which had raised $9 million altogether.) Zeszut knew she and her startup had dodged a bullet.
Investor Ron Palmeri, who was a managing director at Minor Ventures, has told me he thought Scout Labs could have become a much bigger company under different circumstances. “If anyone knows marketers and their needs, it’s Jenny,” Palmeri said yesterday in an email.
Talking with me yesterday, however, Zeszut didn’t sound remorseful. Though she loved Scout, four years of ups and downs had made “an early-ish exit more attractive than sticking it out over the long term,” she says. The experience also taught her plenty of lessons that inform how she’s running Beckon today.
The biggest lesson she learned was that it pays to be nice. When Scout wasn’t able to pay “a big team of employees, almost with no notice, I told them to go home. But they stuck with us,” says Zeszut of herself and Jochen Frey, her CTO at Scout Labs and now Beckon’s CTO and cofounder. “They took money from their 401(k)s to pay their nannies.” Almost everyone on that team is now at Beckon, which has 27 employees. “I’m probably more proud of that than any exit,” she says.
It turns out that this lesson applies to investors, as well. “One thing you learn is that the biggest decision isn’t who your cofounders are but who your investors are, because you’re [stuck with them] unless you sell your company.”
When I ask her if she resents Minor, she maintains her equanimity. “There are no hard feelings there,” she says. “It’s a bummer, what happened. But he gave me an amazing opportunity; I might never have had a chance [to become an entrepreneur] if he didn’t.”
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