A VC-Turned-Entrepreneur Lands a Star Cofounder – and Several Million Dollars


Growing up in Palo Alto, Adam Marchick lived in a world that’s largely occupied by venture capitalists, entrepreneurs, and philanthropists. Maybe it’s not surprising, then, that Marchick wound up bouncing around the tech industry as an adult, mixing stints at Siebel, Facebook, and the call center consulting firm Aayuj, for example, with numerous years at Menlo Ventures and Bain Capital Ventures. Marchick even formed an 8-person nonprofit, called Glow Foundation, along the way.

But Marchick may be done trying on new hats for now. In May, Marchick left Bain Capital to start his own Palo Alto-based startup, Kahuna, which has already raised “several million” dollars and attracted as cofounder the founding CTO of SugarCRM, Jacob Taylor. Its tagline: “Harnessing the power of big data insights to deliver business value to mobile application developers.”

I talked with Marchick this morning to learn more about Kahuna, how teaming up with Taylor came to pass, and how he’s transitioning from life as a VC to that of a founder. Our conversation has been edited for length.

Why did you feel compelled to start this particular company right now?

I kept talking with friends who were running mobile business units for their respective companies, both Fortune 500 companies and small companies, and I kept hearing, “Holy crap, we launched a mobile app with just three full-time engineers and it went from [accounting for] 30 percent of our business to 80 percent of it.” Then I’d start asking about usage patterns and [those same friends] didn’t know much. They didn’t know how many users they had or how many users had been active but had recently started to fall off. And they kept referring to these existing Web analytics tools that now have mobile [versions] but weren’t giving them the insights they needed. So I kind of knew there was a problem.

What happened next?

I was kind of sitting there in January and knew in my gut that there was an opportunity, so I started talking with friends who I really respect and who are really tapped into tech people, including [managing director] Josh Stein at [Draper Fisher Jurvetson], who I grew up with in Palo Alto. And as I told him what I wanted to build – a mobile insights company that’s trusted by Fortune 500 companies—Josh said the first guy to get was Jacob, who has 12 years of [customer relationship management] tech experience, is an awesome data systems guy and a big picture person. So we met at Starbucks and starting working together a week later. I lucked out big time.

Knowing what you do about venture capital, will you raise a round soon or bootstrap the company for now?

We were both very open to bootstrapping. One of the very cool things about Jacob is that a lot of engineers want to work for him. But they also want a good salary, so we wound up raising some money to start, a seed round of several million.

That sounds like more than a seed round. Are you disclosing who your investors are?

We’ll do that in the first quarter because we don’t necessarily want that to be the headline [right now]. And we consider it seed money. Just because you raise it doesn’t mean you spend it. We’re just four months old at this point. We launched in June, hired our first engineer June 2, closed our financing round June 6, and launched the product on July 10.

Who are your customers, and is the product ready for prime time yet?

Right now, we have a handful of great, early adopter customers who are sort of in co-development with us. The [software] is ready for one-on-one interaction and we have a very slick demo, but it feels like Q1 is when we can launch it [publicly].

What’s a part of your experience as a VC that you’ve found helpful as you’ve transitioned into a founder?

I’ve been fortunate to be around VCs who’ve funded companies that went public and to see how the things you do right now [in the earliest stages of a company] determine whether you can build a lasting company of not.

You also see a lot of articles about party rounds. I call that the roommate problem. When you have one roommate, you know who has dirtied the dishes; when you have 30 roommates, you don’t. I expect my VCs to have an impact on the cap table, and in fact, every single person on our cap table has introduced me to a customer that I’ve closed. I’d guess that 1 percent of companies can say [the same].

What challenges were you not anticipating?

There are plenty of them, no question. But I have friends I can reach out to. I have a CEO coach, who is the first guy I reach out to when I have a question with a non-obvious answer. And a group of 15 Stanford [educated] entrepreneurs meets every month for what’s basically an off-the-record conversation, where we can really talk about setting a culture and the real challenges we hit. Not reinventing the wheel is a big deal.

Logo: Courtesy of Kahuna.