786 Chelsey Roney:

We all know how hard it is for women entrepreneurs to raise venture capital … so it’s great to celebrate when a female founder gets the job done! Chelsey Roney found a path to funding through the accelerator TechStars, and shares today what it took to get her $1.2 million seed round in the bank, and what’s next for her collaborative mapping software startup Proxi.

MELINDA

Hi, I’m Melinda Wittstock and welcome to Wings of Inspired Business, where we share the inspiring entrepreneurial journeys, epiphanies, and practical advice from successful female founders … so you have everything you need at your fingertips to build the business and life of your dreams. I’m a 5-time serial entrepreneur and the CEO and founder of Podopolo, the interactive app revolutionizing podcast discovery and discussion and making podcasting profitable for creators. I’d like to invite you to take a minute, download Podopolo from either app store, listen to the rest of this episode there, and join the conversation with your questions, perspectives, experiences, and advice … Because together we’re stronger, and we all soar higher when we fly together.

Today we meet an inspiring entrepreneur who together with her co-founder successfully raised a $1.2 million seed round for her collaborative mapping technology business.

Chelsey Roney is the co-founder and COO of Proxi, and previously founded two other businesses. We get deep into fundraising and scaling, so don’t go anywhere because

What does it take to close a funding round for your business? Take it from me, a lot. With Podopolo just now finally about to close its first venture capital round, I know first-hand how many pitches it takes, how many rejections you get, how long it takes between getting a term sheet and getting the money in the bank.

For most women, venture capital is a whole new world, and one very much run on the power of existing relationships. So, if you’re not already in that world, it can be hard to break in. On top of it, it can feel like a whole other language is being spoken when you’re new to it.

So today we celebrate a female founded business that got funded with Chelsey Roney, the COO and co-founder of Proxi.

Chelsey shares how she did it, and it certainly helped that Proxi already had a lot of happy users after getting featured on Good Morning America.

Let’s put on our wings with the inspiring Chelsey and be sure to download the podcast app Podopolo so we can keep the conversation going after the episode.

Melinda Wittstock:

Chelsey, welcome to Wings.

Chelsea Roney:

Thanks for having me, Melinda.

Melinda Wittstock:

I’m excited to learn about how you founded Proxi and what made you interested in a collaborative mapping technology.

Chelsea Roney:

Yeah, so our story dates back to COVID, the beginning of COVID. It was October, 2020. Halloween was approaching here in the US and parents were hoping to give their kids a fun experience because much of the year had been so rough. But how were parents to do this? We still weren’t sure how COVID was totally spreading. So parents were searching for homes doing distance candy delivery, or not delivery, just putting it outside or sending it down a chute or something like this. And so my co-founder, who’s actually Melinda as well, yeah, she was a member of her neighborhood Facebook page. And a parent had posted, “Hey, if you’re doing distance candy delivery at your house, post your address. That way, all of us can find each other without wasting time,” I guess. And so hundreds of parents had posted their addresses to this comment thread, but she has a background in geospatial with the US Intelligence Agency.

And so when she saw all of these addresses written out, she was like, this doesn’t make sense. This isn’t how humans interact with spatial data. Humans need a map to interact with the spatial data. So she puts all of these addresses that were in the comments on a map and strings several tools together to make it such that people in the neighborhood could add their homes to this map. Now, it was pretty janky the way it was put together, but about 2,500 homes added themselves to the map. It went viral with about 500,000 views before Halloween, and then she was on Good Morning America.

Melinda Wittstock:

Oh my goodness.

Chelsea Roney:

Yeah.

Melinda Wittstock:

Lightning Strike.

Chelsea Roney:

Yeah, it was. And so we have been friends for about a decade since our time in undergrad. We both moved up to Seattle for different reasons, and we both have an interest in business. So whenever she discovered this need, she called me up and said, Chelsea, we need to explore this. What’s going on here? And what we found was that there was no “crowdsourceable” mapping tools in the market. And so that’s what we built is a “crowdsourceable” mapping tool, to get the community, any community, to surface information that they need to spread around. So it could be like garage sales or trick-or-treat maps or Christmas light maps or HOA maps of areas that need improvement, things like this.

Melinda Wittstock:

I think the first I ever really saw this was in the context of Waze, say for traffic.

Chelsea Roney:

Oh, sure. Correct.

Melinda Wittstock:

Right. And I always assumed that they would expand beyond that, that there were other use cases. So tell me about some of yours. I mean, beyond Halloween candy, what are some of the things that you do? Give us an idea of the different use cases for a business and how they could use you.

Chelsea Roney:

Right. So we’ve morphed from a crowdsourcing tool into something a lot a bit more than that. We had all of these customers requesting different features. So where we sit today is that businesses and individuals can use our product, Proxi, to create a brandable map that they can curate recommendations on in place based content. And once they curate this content on this beautiful visual, they can publish it to their viewers, readers. So basically they can embed it, they can share it using links, they can share it in email, things like this. Now, once the user goes to visit the map, they can get more information on each place by clicking into it and seeing what that map creator has written. And then the map creator gets analytics back on aggregate information about how many people are clicking and how many people actually show propensity to convert on those recommendations via buttons like get more info or get directions right now.

Melinda Wittstock:

So, what industries tend to use this most? Is it really brick and mortar type businesses or can it really?

Chelsea Roney:

No, it’s usually content creators, or a couple different industries. One is media. Publications, both print and digital, use our maps to supplement articles that they’re writing about top 10 things to do this weekend or the must eat at restaurants or your travel guide to this city or something. And they put all of this content online. Then they get information back about who’s doing it. And then, not only media companies, but also groups like hospitality organizations. So, Melinda, when you go to a new city and you land at this, you’re in a hotel, you finally set down your bag, you go downstairs and you say, “Hey, where should I go eat dinner?” to the front desk person? And that person either will give you a paper map or will seem kind of confused and be like, oh, go out the front door, turn right. There’s a sandwich shop. That’s not the best experience, right?

So they use Proxi to curate their recommendations and they can easily keep them up to date and provide the guests this map either on paper or via a QR code so that they can visit the map on their phone and then navigate the city in that way. And then also, local economic development agencies like Chamber of Commerce organizations or destination marketing organizations use it to organize local recommendations for their readership.

Melinda Wittstock:

So does it also work on mobile? Do you have a API for mobile?

Chelsea Roney:

Yeah, so it works on mobile. So it’s a web app and you don’t need to download anything to view the maps. We do have an API. We have several businesses that operate core pieces of their business on Proxi maps, and we have APIs so that they can do that as well.

Melinda Wittstock:

So lightning strikes. Melinda, your co-founder, is on Good Morning America. The whole thing gets going. Talk to me about the journey from there. Because I know that you got your pre-seed funding round about a year ago. Congratulations on that. What was the step and what did you have to do to close that first funding round? So many women struggle with this.

Chelsea Roney:

Yeah, it was challenging. Neither my co-founder nor I had been, we didn’t have connections in the VC space, so navigating at first was difficult. We evolved from our Halloween map to include many more features. And then we bumped into someone in the community who said, you really need to, this is really cool. You need to go figure out how to get funded. And I had had a couple businesses before, one bootstrapped, one debt backed, but I had never yet explored venture. And I was like, well, this sounds interesting. I would love to learn about it. Let’s do it. So Melinda was game. I sold my other business. She quit her PhD or put it on hold. And we actually went through and we were developing all these features, we were getting more customers. And then someone recommended that we apply to Techstars.

And for folks out there who don’t know what that is, it’s an accelerator that operates in several different cities across the world, and it gives you in the range of $100,000 to get started with your project. And what it does is it helps you understand what the world of VC funding is all about. So how you build a business that will scale, how you build those connections in your community and in the VC community across the US to raise that money. And so we used all of that knowledge that we got in the Techstars program to begin making connections in the VC community.

And we went all out. Our product is great, and we had a lot of users so those were good, but we also had good timing. And that’s a lot of it in this world, as you know. And so we got funded right before this economy kind of dipped a little bit. And so we went out and we had dozens of meetings with different VCs. We refined our story and eventually we found a lead for our round. And for those listening, if you don’t know what a lead is, it’s the investor who will set terms for your round and they will also help you, in some cases, bring in other investors to fill out the rest of the round that you’re trying to raise.

Melinda Wittstock:

Getting a lead is so important and it’s also difficult. So a lot of investors out there who are kind of like, yeah, I’ll follow. Let me know when you have a lead.

Chelsea Roney:

Yeah.

Melinda Wittstock:

Did you have a lot of that?

Chelsea Roney:

Yeah. So that was a common thing that we heard. Yes, absolutely. Finding the lead is really key. And really it’s all about finding someone who is willing to make that first bet on you and go through that diligence process and really commit. Because a lot of other investors, it’s not that they don’t want to do the work, but once someone else has social proof that they believe in you, it becomes a lot easier to follow on.

Melinda Wittstock:

Gosh, 100%. So much of this is kind of chicken and egg, right?

Chelsea Roney:

Oh, it is, yes.

Melinda Wittstock:

What did you learn, as you went out and pitched VCs for that first round, how did your pitch change? What were some of the things you learned to make it more effective?

Chelsea Roney:

Oh God. Well, when you’re pitching, your deck changes just about every day.

Melinda Wittstock:

Yes.

Chelsea Roney:

It’s so frustrating. It’s the hardest thing. I’ve done a lot of hard things professionally, but this is definitely up there with it.

Melinda Wittstock:

Oh God. Yeah. Painful.

Chelsea Roney:

You go in, yeah, you go in with one deck, you listen to feedback, you read the room. I think EQ is really important in these situations. And you kind of make notes on when people draw back, when people aren’t asking questions, when people aren’t leaning in. And you’ll find those parts of the story to really be a home run.

Melinda Wittstock:

Now, you were doing this just in, I’m sorry to interrupt, but you were doing this in person so you could kind of read the room. And how do you do that on Zoom? I know we were getting a lot of our fundraising on Zoom and you couldn’t really tell, you know?

Chelsea Roney:

Yeah, we did probably 50/50, and yeah, you’re right. We do get more declines when you’re on Zoom. We love being in person. You can just connect with people easier and you don’t get straight down to business necessarily when you’re in person. And that helps when you’re building a relationship. It helps build trust, it helps build rapport. Because so much of funding is based on the team and how much they trust you as a team to operate the business.

Melinda Wittstock:

It’s really true. I mean, it comes down to developing those relationships. And I think this is a challenge for a lot of female founders because they’re not, like you were saying, you and Melinda weren’t really in that whole VC community, so you didn’t have the relationships already, which definitely gives a certain group, Stanford graduates in San Francisco, for instance, a significant advantage.

Chelsea Roney:

Yeah, no, it really does. It’s all about who you know, and I’ll leave it at that. It truly is all about who you know.

Melinda Wittstock:

So you got to get out there and network and develop relationships. So obviously Techstars are probably introducing you to people, you had Demo Day, you did all those things, right?

Chelsea Roney:

Yeah.

Melinda Wittstock:

And then when you were prospecting to try and find, okay, so who’s really into maps and AI and who’s going to get this, how did you figure out who are the most likely investors that would be interested?

Chelsea Roney:

Well, it has been tricky, to be honest. There aren’t a lot of mapping startups out there, so there aren’t a lot of VCs that list mapping or navigation or whatever you want to call it in their thesis online. So that is more difficult. I don’t have a great answer for you, Melinda. We’ve tried to narrow it down to a couple of different areas, like people who are really interested in consumer companies, because Proxi needs a lot of users to grow. Eventually one day we would like to compete with Yelp and Google Maps to be the premier space to figure out where to go and what to do. And we’ll use, we have a unique thesis on how we will approach being better platforms. So we’d look for companies that look for mass consumer adoption, if that makes sense, or VCs that look for mass consumer adoption.

Melinda Wittstock:

And so, what’s the business model? How do you make money?

Chelsea Roney:

Yeah, eventually advertising. So Proxi is a really unique advertising opportunity because we will know, based on the map that you’re looking at, quite a bit of information about you, because the maps end up being titled things like Dog Parks in King County, which is where Seattle is. And we know you’re in King County, we know you like dogs. We can infer a whole bunch of other things probably based on other maps that you’re looking at. And then we can serve dedicated ads to you based on that and allow different map sponsors to be there and things like that. But really, the money here, as you know, is in conversion. So it’s all about who ends up making a booking, who ends up getting directions to that place. Those types of clicks will result in more revenue for us and also really good outcomes for localized advertisers.

Melinda Wittstock:

Right. And so what have been some of the biggest challenges, I guess, along the way, apart from fundraising, because that’s a challenge for everybody, the men, and especially women, and especially women of color.

Chelsea Roney:

Oh yeah.

Melinda Wittstock:

But having survived at least that first round, what were some of the other challenges or unexpected things that happened where you’re like, oh my God, we didn’t think of this. How are we going to pivot around that, or whatever? What happened along that journey for you?

Chelsea Roney:

Yeah. Well, we’ve been pretty lucky to have a really similar vision today as when we started. And I think that’s fairly unique in the startup space. A lot of times people pivot because they found a problem like you’re alluding to or whatever the case may be. So we’re lucky not to have those types of problems right now. But we have experienced a problem around, one, growing a little bit too fast with our newest product, MapsGPT. That product is where people can come to that website, they can fill out a Mad Lib prompt and receive an AI generated map back. We’ve had a lot of adoption there, and that is sending, it just sends variable costs up. And so while we’re so lucky to have that usership and find an area people are interested in, that has been a challenge this month that we are attempting to mitigate.

Another challenge that we’ve gone through is we have many, we’re a technology enablement platform, right?> We don’t see ourselves in the content creation business. We will host content, but we don’t create content ourselves. We enable businesses to get local content out there. We enable individuals to get local content out there. So given that we do provide services across an incredible breadth of people and interests, everyone has different feature requests, if that makes sense? And so one of our biggest talking points internally is figuring out what is a priority and what is not? What to spend resourcing on, what to spend design time on, and what to actually implement, and making those bets on what will actually move our usership and product forward the most? Because a lot of suggestions that we get are really good. So sifting through recommendations and making them meaningful and getting them into the roadmap is definitely a challenge.

Melinda Wittstock:

You’ve mastered this sort of co-creation with your customers.

Chelsea Roney:

Yeah. Yes.

Melinda Wittstock:

Which is so valuable on so many levels. Obviously you’re just going to learn from your customers. You’re more likely to delight them, but the added benefit is they feel part of a mission, they feel like an ownership.

Chelsea Roney:

Yes, that’s exactly it. We always try to get back to people and say, all right, we’ve been able to execute on what you wanted and here’s the finished product. So that’s been really fun.

Melinda Wittstock:

Yeah, that’s huge. So it sounds like also there’s a real growth marketing aspect to what you’re doing. I mean, how much are you running with inspired ideas and how much of them originate really through looking at the data? Or is it a combo?

Chelsea Roney:

Oh, a combo for sure. We look at data every single day internally, and we study conversion rates on buttons. We study heat maps on where people are clicking. We study colors, we study everything about the design and features that are working and what’s not working. Yeah, so it’s really a delicate balance between internal development based on the data and the feature suggestions we get. So people write into us via email or via chat, and we ask them clarifying questions. We record all of the requests, and then we kind of have a system where we up vote them or down vote them based on different factors.

Melinda Wittstock:

Where do you see yourselves in five years’ time, say?

Chelsea Roney:

Yeah, in five years we will be the app people are opening to figure out where to go and what to do because we deliver nuanced results for you and nuanced personalized results that platforms like Yelp and Google Map suggestions don’t provide today. So think about when you go to Yelp and you search for restaurants near me. Yes, you mean restaurants near you, but you mean so much more than that. Melinda, you might mean a bougie cocktail bar.

Melinda Wittstock:

How did you know? How did you know me?

Chelsea Roney:

But I might mean a restaurant where my two toddlers can throw pizza on the floor. There’s so much more to what you’re really trying to get at, and I think people have been trained to search and filter based on these basic terms that your paradigm has been shaped on based on current tech companies shaping them with their features. Now, this process could be so much better. What if you open up your phone and obviously it already knows you much like Pinterest or Instagram or something like this, or Spotify even, and you receive recommendations based on your demographics, based on what you really want to see, based on where you’ve been before.

Melinda Wittstock:

I understand this so well because this is what Podopolo does for podcasting.

Chelsea Roney:

Yes. Exactly.

Melinda Wittstock:

That specific thing, right? Because we know a lot about, and increasingly more and more and more thanks to the AI, but also what people tell us about their preferences, what their friends are listening to, this and this and that. So it becomes more and more personalized. And it’s so interesting in all the conversation about ChatGPT now together with Bing completely taking on Google. And it was interesting that you mentioned Google there because I’ve found of late the search results are terrible.

Chelsea Roney:

Terrible.

Melinda Wittstock:

They’re really bad.

Chelsea Roney:

Yes. Yeah. Oh man, I totally agree with you. I could get going on this for quite some time, but it has been really just Google’s search results aren’t nuanced. And they’re not personalized and they’re not curated for what you really are trying to find.

Melinda Wittstock:

Which is so surprising.

Chelsea Roney:

People already, given this AI change and given people’s experimentation with ChatGPT, I think it has opened up consumer sentiment to a new way of search and discover, which is what you’re talking about and what I’m talking about. You’re talking about it on a podcast platform, I’m talking about it with location based search. But I think we’re about to hit a new and advanced way to navigate your life and navigate how you spend your time, whether that be podcasting or locations and really exciting,

Melinda Wittstock:

All of it.

Chelsea Roney:

Everything.

Melinda Wittstock:

All of it. And it’s extraordinary to me because, did you ever get asked this question? Oh, how are you going to compete against Google Maps? Right? And you’re like, well, I’m going to guess your answer would be, well, they can build it or buy it. I mean, a lot of investors assume that these big giants are continuing to innovate, but clearly not.

Chelsea Roney:

But clearly not. Clearly not. That’s our answer. You’re right. I mean, there’s no two ways around it. A big company, I kind of have a rant about this, but a big company could do these things, and I’m sure you get asked that about Apple or whatever. But they’re just not. They’re not showing interest in that. And so the small guys have to go out and do it, and then the big guys can either do it or buy it, and you kind of just hope that you get the usership and the thought leadership in the area such that you become the market leader in that.

Melinda Wittstock:

Well, congratulations on all the progress, and I know you’re getting into fundraising mode again. And is it series A next time around or a bigger seed?

Chelsea Roney:

Yeah, we’re looking at a bigger seed. So hopefully this would allow us to launch our consumer app, which would allow you to save maps, allow you to favorite places, allow you to come back to them, follow map creators, things like that, as well as get into some of that, not, I don’t want to say turn on revenue in a full sense of the word, but start doing experimentation with revenue as well.

Melinda Wittstock:

Got it. Amazing. So Chelsey, I want to make sure everybody knows how to find you and work with you and also use Proxi. What’s the best way?

Chelsea Roney:

Yeah, if you want to find Proxi, navigate to Proxi.co. P-R-O-X-I.co. It’s like proximity. If you want to find me, I’m out on the internet and be happy to chat. I’m at Chelsea Roney pretty much everywhere. Yeah, I’d love to hear your thoughts and get your feedback as we build out the next new way to navigate your world.

Melinda Wittstock:

100%. Well, I’ll tell you what, just in the context of Podopolo, it’s kind of interesting. I’d love to explore your API. I mean, because so much of our platform is increasingly social and connecting people around their shared interests via podcast, so really interesting what you’re doing there. So I will follow you and stay in touch. Thanks so much for putting [inaudible 00:25:57].

Chelsea Roney:

Thank you.