On a spring-like February evening, the Denver Founders meet up once again converged and those in attendance were enraptured by the story of Ryan Sullivan and Parkifi. If the maxim “it’s better late than never” ever yielded an idea like Parkifi, then well… few have ever heard about it.
Parkifi is on a mission to revolutionize the way people park. In essence, the idea is to use sensors to detect, in real-time, whether parking spots are available. Clearly, the idea has some wheels, as the company just finished its Series A round of funding, landing $7.5M from investors in San Francisco and Washington, D.C.
But that’s where things stand today. It hasn’t always been that way. Our story starts just a few years ago, when Sullivan was working as the Head of Project Management at SendGrid. Sullivan admits that the primary reason he targeted SendGrid was to get a line on then-CEO Jim Franklin. Sullivan viewed Franklin as a potential mentor, which is why he sought him out.
You see, Sullivan had already tried two different startups, and failed miserably. Who wouldn’t want an app that gave parenting advice, from a single, childless, young man?
While working at SendGrid, where he also met his co-founder Rishi Malik, Sullivan was late to a meeting and blamed his tardiness on his inability to find a parking space in time. Although this is something that has happened to countless people, the light bulb went on for Sullivan, and he decided to do something about it.
The original idea involved a type of parking cone with an LED light on it that would indicate parking space availability. Sullivan sardonically dismissed this initial concept and focused on the inevitable pivot that followed.
He ended up meeting with a private lot operator in the Denver area who helped to open his eyes on the pain points of the parking industry. The revelation centered on the fact that parking is a supply and demand issue, but no one ever knows what the supply inventory is. Another revelation at this point was that parking operators had a revenue problem, whereas the average person just had a convenience problem. Focusing on the operator side made a lot more sense.
Data from parking meters provide some information, but it’s all post-facto. Surface lots can be even more challenging. One way to get information is to track tickets for illegal parking, but that’s even more hit-or-miss.
Sullivan conceded that he’s not the first to tackle this issue, but other solutions ran to $350 per parking space. At that price point, mass adaptation was pretty much doomed. But with the right technology, Sullivan knew that Parkifi could help operators track their inventory and improve their revenue streams.
Between cities, municipalities, and private operators there are tens of thousands of parking spaces in the Denver area. Private operators control anywhere from 60–75% of these spaces. Combine that volume with the pace of business, not to mention the red tape that comes with dealing with public entities, and Parkifi focused most of their energy on private operators.
Of course, this doesn’t mean they’re abandoning public operators either. But the focus on the private sector allows for faster testing, feedback, and iteration of their product. Plus, Sullivan mentioned, it’s not like these devices are permanent. “We can always take them out,” he said, “it’s not like we’re digging potholes and charging people for it.”
Hardware and Software
For seasoned software engineers, getting that aspect going was a known unknown. The sensor that made the whole thing go was an unknown unknown though. In order to satisfy their hardware needs, Parkifi hired a hardware ace. How did they get so lucky on that hire?
The company hired a recruiting firm and their man’s resume was in the stack. It was nothing more than luck and being in the right place at the right time, according to Sullivan.
Parkifi is currently in the discovery phase of their hardware development. They’ve developed a sensor about the size of a hockey puck. The idea is to drill a hole in the middle of a parking space and install the sensor there.
At this point the device uses a magnetometer sensor that detects changes in the magnetic field above it. This is a differentiator, as other solutions have multiple sensors, but this is also why they’re so expensive. By reducing the power requirements, Parkifi can make a more efficient sensor. Thanks to “black magic voodoo,” Sullivan said that as of today the batteries in their devices last about five years.
The sensor functions on a point-to-point network, much like a cellular network. Opting not to go with a mesh network also helped increase sensor battery life. Sullivan designed light sensor firmware, opting instead to put all the horsepower in their cloud infrastructure.
Navigating the highways and byways of entrepreneurship is never an easy task. Sullivan and his colleagues applied to a number of accelerators before deciding to go with Boomtown. Given its location in their proverbial back yard, or parking lot as the context warrants, it was the natural choice.
The goal in working with Boomtown was to expand his network in the startup community. The experience also resembled the startup equivalent of a forced-march or Sherman’s march to the sea. Sullivan called it a “pressure cooker for three months.” Although this meant regularly working 18-20 hour days, he said the experience was vital because having a finite window of time to get something substantial done really forced him to get things done. Outside of that context, it’s easy to make excuses for putting things off, he noted.
When it came to finding mentors and getting plugged into the scene, Sullivan remarked that it was easy to get introduced to people. The real challenge lies in finding mentors that are the right fit at the right time. He also advised his fellow entrepreneurs to be tactful with all potential mentors, even if it’s a terrible match. “I realized that my name and Parkifi are synonymous,” he said, “so what hurts me, hurts Parkifi.”
With a cache of mentors now available, the question of how to manage those relationships emerged. Sullivan reminded the attendees that not every mentor is needed at all times. These relationships are much more fluid. Some mentors are a constant presence, bob in and out of the picture as their expertise warrants. This is another reason it’s important to at least remain cordial with potential mentors.
Sullivan pointed some of the best advice he received about mentors is to find and lean on those who understand that they are just one of several inputs on a project; that their opinions are just that. It’s not the job of a mentor to find solutions. This is helpful to keep in mind when dealing with mentor whiplash, which is when two people advise you to do completely different things.
Meanwhile, some of the best advice he received from a mentor was that “you get told a thousand times that being CEO is the loneliest job. But it doesn’t sink in right away. Somewhere along the line it switches.” Sullivan can pinpoint the day when he became aware of that switch. It happened when a co-worker commented on his health (he had been sick) and it dawned on him that he’s the representation of the company and everyone is always watching him.
The Winding Road of Fundraising
When the conversation shifted to fundraising, Sullivan wryly referred to it as a “special task.” Courting investors involves spending a lot of time away from the day-to-day operations of the company. This is a marked contrast to the Boomtown experience.
Sullivan noted that, on the bright side, venture capital firms tend to not drag you along during the process. It’s either a yes or a tactful no, i.e. the fated “I’ll pass.” A good strategy to figure out whether a potential investor is stalling or not is to ask them to do something for you, he said. If they play ball, they’re probably still interested.
The funding game resembles a rollercoaster ride; it’s a series of highs and lows. “No” is much more commonplace than most people are used to hearing. The key to surviving this process, according to Sullivan, is to know that this will happen and to plan for the eventuality. Having raised your banner high, it’s much easier to weather the storm of negativity. As Sullivan noted, “don’t give up because the next rise could be the one.” Therefore, with a steeled spine it’s much easier to say “this is not the day we die.”