Marc Barros’ first startup crashed and burned. Now the University of Washington graduate is trying again with a new angle.
After he was fired from the company he started, Marc Barros found therapy in writing.
The entrepreneur and co-founder of Contour, a Seattle action-video-camera company, wrote about meeting his wife, starting a company when he was 22 years old and watching that company fall apart because of a much larger competitor in the market.
Barros wrote for nine months after he was removed as CEO of Contour in January 2013. He wrote while traveling to Italy and Brazil with his wife, Gina, and their young son. He wrote while he tried to decide what to do next.
Job: CEO and co-founder of Seattle-based Moment
Past jobs: CEO and co-founder of Contour
Education: Bachelor’s in entrepreneurship from University of Washington
Most influential mentor: “My dad. He came from Brazil with nothing and taught me about hard work.”
Favorite activity: Spending time with his wife and two kids, and anything to do with soccer
“It takes a while to get through all that emotionally,” Barros said. “Think of it like getting your heart crushed as part of a first love. First it’s frustration and anger and getting it out, and then it’s understanding.”
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When those nine months were over, and Barros had finally reached some level of acceptance, he chose to undertake the risk and strenuous hours of becoming a company founder again. This time around, he pledged to lead the company differently.
Barros is one of hundreds of serial entrepreneurs in the Puget Sound region, people who are “addicted” to starting companies, according to Seattle serial entrepreneur Sunny Gupta.
First ideas are rarely a hit, but serial founders surge forward, each time incorporating what they learned from failures into their next venture.
Barros launched his new company, Moment, in August 2013 with a team of three other co-founders. Moment makes lenses that attach to smartphones to improve picture quality and offer a way to give different dimensions to smartphone shots. The startup also makes a photo-capture app and a case that essentially makes phones act like full-size cameras.
Barros is no longer the 20-something who started Contour in his garage with a college friend. He is more relaxed, a bit more worn, and certainly more prepared.
“From the very beginning, the purpose of the company is much clearer,” he said. “We want to be the best in the world at one thing.”
Contour kept running full speed ahead even with the future of action cameras unclear and its chief competitor, the popular GoPro, taking a significant market share. Barros said he and the other Contour executives just kept churning the machine, thinking “we’ve got a good idea, we’ll work it out somehow.”
“We were running the company like we were No. 1,” Barros said. “But we were No. 2 in the market. A lot was just not understanding what it meant to be a No. 2 company.”
GoPro raised $80 million about the same time Contour raised $5 million. GoPro had the national recognition and partnerships with the NHL, snowboarder Shaun White and Foxconn. It won the market.
Contour eventually went bankrupt in August 2013 and 60 people were immediately out of a job. For Barros, who had left the company nearly nine months before, it was like a temporary relapse to watch his company fold and his friends get laid off.
Manufacturers shipped more than 1.3 billion smartphones worldwide in 2014, a 27 percent increase from 2013, according to market researcher IDC. During that same period, digital camera shipments saw a 31 percent drop.
Many factors have contributed to the decline in digital camera sales, and the rise of smartphones with increasingly agile lenses is certainly one.
Mobile photography seem to have huge potential, but Barros isn’t taking anything for granted this time. He doesn’t want to grow the business too quickly without doing as much research as possible.
After all, Moment’s product aside, cameras on smartphones are getting better with every release. There’s certainly no guarantee that people will need or want external lenses.
So the startup is collecting as much customer data as possible to see if it is tapping into something that will be a niche business or something with the potential to be a huge market.
Moment sells its $100 lenses and $70 case directly to customers solely through its own website. That way, the company can track customer demographics and buying habits.
Barros also insists that every new product Moment creates be crowdfunded on Kickstarter, even if the company already has enough money to make it.
Moment launched in January 2014 with a Kickstarter campaign seeking to raise $50,000. Instead, it raised more than $450,000 from 4,722 backers. A year later, Moment put the phone case on Kickstarter and raised $693,435 from 4,833 backers.
“You can spend four months prototyping but if people don’t want it or don’t (care), then you’re going to waste a lot of money on manufacturing,” Barros said.
Barros wants to be absolutely sure this time around that mobile photography will take off before the company takes a huge amount of money from investors. The $5 million Contour raised was insufficient, Barros said, for what the company was trying to do.
“Five million dollars was not the right amount of money to go build a category,” he said. “Our competition raised $80 million and we lost the category.”
Moment has raised $1.8 million, largely from individual angel investors, including Techstars’ Chris DeVore, Concur’s Steve Singh and Bonobos’ Andy Dunn. All the investors are people who knew Barros previously or who are uniquely interested in mobile photography.
While Barros is hesitant to jump into hyperspeed with the company this time around, he isn’t afraid to say that he thinks mobile photography could be bigger than action-video cameras.
Contour grew from revenue of $150,000 in its first year to $7 million by year four. Barros won’t give specific numbers for Moment, but he did say it is growing at a faster clip than the action-camera company. Moment’s revenue is in the six-figure range.
Barros may have found, as serial entrepreneur Gupta suggests, that controlling your own destiny through founding a company is addictive.
“You realize that 99 percent of the days are actually bad days in a startup as you’re raising money, hiring employees and building and selling products,” said Gupta, CEO of Bellevue-based Apptio and also co-founder of Vigor Technology and iConclude. “But the highs are so high. Once you taste success instead of failure … (you) can’t do anything else.”
The region is chock full of these entrepreneurial archetypes. Nearly half of new tech companies in the Puget Sound region had at least one founder who was a serial entrepreneur, according to a 2009 study commissioned by the Washington Technology Industry Association.
It takes a certain type of person, said Code Fellows CEO Dave Parker, who recently sold his company UP Global to Techstars, a startup accelerator with a large presence in Seattle The people who do it for the money, he said, usually don’t make enough and then don’t come back for a second or third time.
The repeat entrepreneurs who keep going are the ones who can answer the question of “why should I do this?” Parker’s favorite way of putting it — “You can build it. But should you?”
Barros says Moment should be built. More and more people use their phones solely to take pictures, and amateur photography is rising as a result. His passion for the product is infectious, and investors can tell.
“We think he’s absolutely right about the future of photography being smartphone-based and is approaching that market with a very smart combination of beautiful, functional hardware and supporting software and community,” DeVore said.
Besides, having one failed company on your résumé is seen almost as a badge of honor in this town. It attracts the attention of investors. More than that, as Barros has learned, it teaches you what you should and should not do the second time around.