Tips for First Time Angel Investors

As part of Boulder Startup Week, David Cohen and Brad Feld held a Q&A for prospective Angel investors at the TechStars Bunker yesterday.  David is a serially successful entrepreneur, Angel investor and current Founder and CEO of TechStars, arguably one of the most successful mentor-driven seed stage investment programs for Internet startups.  Brad is a successful entrepreneur, founding partner in Boulder-based VC firm Foundry Group and co-author with David of Do More Faster.  These two guys know a thing or two about successful Angel investing in Internet businesses.  And as a prospective new Angel investor, I found the session pretty informative.

Here are a few tidbits of advice for those interested in becoming Angels from David and Brad.

First things first, be honest if Angel investing is really for you?  If you don’t have the ability to today write 2-3 $25K checks each year for the next 3-5 years, then don’t do it.  If you can’t lose every penny written from those checks without having a pit in your stomach, then don’t do it.  For you math wizards, that’s having between $150-$425K in cash sitting under your mattress today such that if your mattress spontaneously combusted it would be no big deal.  Why does all that cash need to be accessible today?  Because you will need to make follow on investments in the same companies over time, essentially committing that cash today or putting yourself at risk of not getting a sufficient return on your early investments.

Once you commit, determine the “volume and velocity” of your investments.  There are 3 variables you need to determine up front that must jive with one another:

  1. How many total dollars are you committing to Angel investing?  Example: $600K
  2. Over what time horizon?  Example: 3 years, so $200K per year
  3. How many investments per year do you intend to make (assuming that each investment requires 2 funding rounds over the period)?  Example:  If each investment requires 2 rounds at $25K or $50K total, then you can afford to do 4 investments per year totaling $200K per year, or $600K over the 3-year period.

How does a new Angel get exposure to quality deal flow?  This for me seems like the biggest challenge as I contemplate jumping into investing.  The “best” deals with the most accomplished teams inevitably get funded by the highest profile Angels and VC investors.  And the most discerning entrepreneurs of course prefer experienced Angels with solid reputations and a track record of not just writing checks, but helping their portfolio businesses succeed.  Oh well, gotta start somewhere I guess.  David’s advice was to create a single-page investor profile – type of companies, investment criteria, size of investment, professional accomplishments, references, etc. – and distribute to a few well-connected and accomplished Angels and VC’s as an offer to co-invest with them.  The other way is to join an Angel Group.  But…

Beware of Angel Groups, they can be effective, but do your diligence.  There are good and bad angel groups separated by how active the individual members are at actually writing checks and making investments.  Ask how many investments the group has done in the past year?  What % of the membership is writing checks?  How do they qualify Angels?  If you are considering a group that charges entrepreneurs to make a pitch or for sketchy “boot camps”, run for the hills, its supposed to be the other way around folks.  Innovative groups such as the Open Angel Forum started by Jason Calacanis were created to truly serve the entrepreneurs and put these “bad” Angel Groups out of business.

Determine how involved you want to be in the target company – Leader/Active, Follower/Advisor, Everyone else/Passive.  There is no right answer, this is a personal choice based on how involved you want to be with the management of the target company and helping them raise the rest of the money they need.  If your investment strategy is to make 2 investments per year, then you are likely to take a more active role than if you are making 20 investments per year.  The key point both David and Brad make – be transparent and upfront with the entrepreneurs about the level of involvement you intend to have with the company.  Don’t have company leadership believing you will be actively advising if you intend to write a check and disappear.  And it goes both ways, a meddling or overbearing Angel can put entrepreneurs in difficult and distracting positions.

And finally, in order to be an Angel that doesn’t suck for the entrepreneur, follow these 5 simple rules.

  1. Make a decision on your investment within 24 hours
  2. Take the entrepreneurs phone call, especially when they are upset
  3. Tell 3 other prospective Angels/friends about the Company (to help them close the round)
  4. Clearly communicate your intended level of involvement post-investment
  5. Directly contribute to solving 1 out of the top 3 challenges that keeps the entrepreneur up at night.

Crafting Your Startup Pitch

I participated in a session today during Boulder Startup Week hosted by Jason Mendelson, a Partner in Foundry Group.  The audience was a group of entrepreneurs in various stages of fund raising activity.  Jason had some great advice for the group as a long-time Venture Capitalist who sees over 1,000 pitches per year.  Of the 1,000 he sees, 500 of them are immediately discarded to to bad grammar.  Really?  Of the remaining 500, 300 have an ineffective or even no “Elevator Pitch” – which Jason claims is the most important thing an entrepreneur has to get right to get initial investor attention.

So there you have it, you can be in the top 20% of deals he sees just by 1) mastering the English language and 2) having a concise, well-articulated Elevator Pitch.

What comprises an effective Elevator Pitch?

  1. Proof of a massive problem. What problem are you solving and how big is it?  This should be easy to nail quickly.
  2. How your business solves the massive problem.  What unique solution has been developed or conceived?
  3. Why YOU rock! (as an individual and how you are different than everyone else).  VC’s invest in people, first and foremost, so don’t be shy about why you are the best at what you do and what gives you a special advantage to outlast everyone else.

And all of this communicated before the elevator gets to the 4th floor!

So now that you are in the top 20%, here’s the next set of deliverables to win your prospective VC’s heart and cash.

  1. 5-7 page Executive Summary in written form.  The days of 70-page business plans went out with 8-Track tapes and Betamax.
  2. Product demo or prototype.  Showing your product is ALWAYS the most effective way to get attention.  It shows passion, commitment and enables an investor to share your vision for solving big problems.  It does not, however, eliminate the need for the Executive Summary.
  3. Personal connection.  I thought this was a really interesting and refreshing insight.  In order for Jason to invest, he must build a relationship with the entrepreneur and he expects incredible energy from that relationship, energy that first emanates from the entrepreneur and that increases with each visit as trust is built.  Why?  Because when times get tough, the personal relationship is what gets you through it.  The trust is the fallback for difficult conversations and wrenching decisions.  Personally, I want my VC to act this way, I was super-impressed by this investment philosophy.

Where do most entrepreneurs fall short in their pitches?

  1. Inadequately evaluating or addressing the competitive threat.  Even if there is no one on the planet that is doing exactly the same thing you are doing to solve a particular problem, for you to obtain customers there has to be a compelling reason for them to allocate time to you v. whatever else they could be doing.  Literally, the Internet is your competition in this case.  Don’t ever tell a VC you have no competitors, its the Kiss of Death.
  2. Inadequate attention to Business Model – Both Revenue and Expenses.  The one fundamental truth about Revenue projections?  They are always wrong.  100% of the time they never come true, the business will learn, iterate, pivot and generate revenue in ways that weren’t originally contemplated.  But its OK.  They key is to understand the drivers of revenue – # customers, page views, $/customer – those things that if you can scale, even a few of them, it drives revenue.  Expenses, by contrast, better always be right.  They are controllable and need to be well-thought out.

Finally, how does the entrepreneur find investors and get their attention, particularly VC investors?

Jason’s advice, as someone who is regularly spammed by entrepreneurs who blast out wildly to VC “lists” having done little to no research on the VC’s investment criteria –  do your research in a targeted way and wrestle ONE VC to the ground first.  Get personal, find common ground, ensure they invest in your sector, follow the directions above and generate interest and dialogue.  Once you have one that is responsive, cross-reference what other firms your one firm has co-invested with in the past, which are in the same sector or stage of development from an investment standpoint and create some competition for your stock.  Just don’t delay a deal by trying to create an auction!

And my favorite quote of the day.  Asked how long an entrepreneur should expect funding to take, from “first date to wedding”.  Jason’s answer?  “It depends how hot you are”.  Quick on his feet, very quick.

Your Phone Will Control Your Home

We knew it was coming, but Google finally today announced Android@Home, Google’s new open framework to allow your Android mobile device to (eventually) control everything in your home – music, lighting, security, cameras, doors, appliances, you name it.  I think the “home” is a next big frontier of unexplored opportunity and is going to create an entire new ecosystem of startups and companies focusing on the intersection of mobile and home.  While Microsoft (Kinect), IBM and HP have been in this home sensor space for years, Google has a history of changing the game and bringing new technologies to the masses through their open development platforms.  Google Chrome OS, with 160M users and Android, with exponential growth and now the leading mobile operating system in the world, are two examples of Google’s ability to create explosive products and platforms.

Over just the past decade, we’ve seen a migration in opportunity from initially web only, then to mobile smartphones, then to mobile connectedness to others through applications and social media, which by the way is not nearly fully exploited yet.  It seems with Google’s announcement today, at least one next evolution of connected technology is our mobile device as a true connector to everything in our lives – people, home, car and every activity that fills our day.

Consistent with other Google applications, Android@Home is an open platform that encourages any developer to create applications that operate on the platform.  Google with their worldwide influence, has a unique ability to define and lead game changing technologies by first defining the platform standard, then opening it up for developers everywhere to create applications, increasing consumer adoption and ultimately leading to exponential scale.  Google’s vision in this case is to create a “smart home” by having millions of developers building applications that over time will completely automate your home through your mobile device.  Pretty cool George Jetson stuff that he might have developed at Spacely’s Sprockets!

I’m excited to see what will happen over the next 12 months in the home automation space now that Google has officially entered the market.

Now, if only Google could create a platform for increasing home values to 2005 levels, I’d really be impressed 🙂

The Founder Conference

I attended The Founder Conference this week in Mountain View, CA.  I don’t really attend many conferences, but every once in a while I’ll go to an event if there are a few speakers I’d like to see.  This one had two and it was a decent event, with about 500 entrepreneurs in attendance to hear some startup luminaries like Guy Kawasaki and Naval Ravikant speak about startup funding and delighting your initial customers.  Additionally, Phil Libin, CEO of Evernote, gave a killer talk about the success and growth of his company and how he did it.

I intended on summarizing some of the key points, but there’s someone else who did a stellar job, even shooting video of the event.  See Dan Odio’s Founder Conference Blog Page for a re-cap and great video.

For the highlights, I suggest the following:

  • If you are interested in raising money for your startup or understanding what is happening in the VC/Angel marketplace right now, definitely watch Guy & Naval’s talks.  Guy Kawasaki is a serial entrepreneur, former Chief Evangelist for Apple and author of Enchantment.  And he’s a great, engaging speaker.  Naval Ravikant is also a serial entrepreneur and recent founder of AngelList that brings together founders with Angel investors – about 1900 of them!  He knows a thing or two about what’s happening in the marketplace for startup funding.
  • If you want to hear a great startup success story and be awed by how to really track performance and understand your customer’s needs and behavior, then watch Phil’s talk on Evernote.

These 3 presentations I thought were the best, most useful of the day.  Enjoy!

Engineer = Rock Star

It’s good to be a developer in this job market.  Really good.  And not just in Silicon Valley, although SV really is the center of the universe for mobile and web technology.

At TrueCar, we’ve been really aggressive with hiring for both our LA and SF offices, including offering relocation packages from anywhere in the U.S., even for junior engineers.  We’re selling our story hard.  Here’s what we’ve been up against over the past year:

  • Google recently gave every employee across-the-board 10% raises – up from already strong compensation.
  • Large Silicon Valley companies like Google and Facebook are actually acquiring small startups, in some cases only a few months old, to gain access to the development team.
  • Poaching talent from competitors has become a fine art, escalating signing bonuses to extreme amounts for top talent.  As incredulous as a $500K retention bonus sounds, the economics of that decision for a company like Google makes perfect sense based on the shareholder value that lead engineer will create.  Oh, and 15% of Facebook’s employees have previously worked for Google.
  • In Boulder, a consortium of companies are pooling money to fly in engineers from around the country to attend Boulder Startup Week beginning in a few weeks on May 18.

Compounding the challenge is the fact that its probably the best time in tech history to be an entrepreneur and start your own company.  There’s efficient access to capital and mentoring through firms like AngelList, YCombinator and TechStars and valuations are soaring, encouraging top technical talent to do their own thing, which is exactly what is happening, effectively removing top engineering talent from the labor pool.  How crazy is it that top engineers leave Google, start their own company, get acquired within a year and end up back at Google as an employee?

It’s a downright war for talent right now.

My Favorite Twitter Follows

I wanted to follow up a prior post on my favorite startup blogs with a post on a handful of my favorite Twitter follows.  These are a group of folks, most of whom I only know by reputation, that have something to say or news to share about technology, startups or entertainment.  As I mentioned previously, Twitter has become a go-to source of news and insights for me, an incredibly efficient way to absorb a lot of information quickly.  Enjoy!

News, Technology & Startups

  • @TrueCar – of course.
  • @TechCrunch – the leading startup blog, news feed.  Good iPhone app too.
  • @TEDNews – news source for incredible human innovations
  • @venturehacks – Startup advice
  • @nytimes – Also on my iPhone
  • @cnnbrk – CNN Breaking News
  • @GOOD – An association of “pragmatic idealists” focusing on issues of Good in the world
  • @Oxfam – An international group of 15 organizations across the world developing solutions for poverty & injustice.
  • @bfeld – Brad Feld, VC and prolific blogger, highlighted in a prior post.  Highly active on Twitter.
  • @msuster – Mark Suster, Entrepreneur turned VC, very active blogger and on Twitter.
  • @sacca – Chris Sacca, Entrepreneur and early investor in Twitter.  Highly active.
  • @Bill_Gross – Founder of Idealab and 100 other companies over 30 years
  • @tferriss – Tim Ferriss, author of “4-Hour Work Week” and “4-Hour Body”.  Interesting and unique.
  • @fredwilson – Highly regarded VC and daily blogger.
  • @cdixon – Chris Dixon, entrepreneur founder of Hunch.
  • @davemcclure – Founder of 500startups, a seed fund and startup accelerator.
  • @hnshah – Hiten Shah, Co-Founder of KissMetrics, great insights for entrepreneurs.
  • @bhorowitz – Ben Horowitz, Founder of LoudCloud turned VC.  Phenomenal blog that I inadvertently left off my previous post.

Entertainment & Other

  • @SudsNYC – Sudhir Kandula, a friend and top 3 finalist in “America’s Next Great Restaurant”.
  • @playgrounddad – Connecting modern dads with products/events that help them spend better time with their kids.
  • @StartupJesus – Fake Jesus, runs a startup that is “going to change the world”.  Of course it will.
  • @ConanOBrien – love his humor and his show.
  • @BorowitzReport – Andy Borowitz, hilarious quips on current events.  King of the one-liners.
  • @donttrythis – Adam Savage, host of Mythbusters
  • @TheOnion – America’s finest fake news source
  • @bobsaget – ever since he appeared on Entourage, I can’t get enough of him.
  • @shitmydadsays – Justin who lives with his 74-year old dad.  4-letter word alert, but freakin’ funny.

What are some great Twitter follows that I missed?

Why Most Startups Need a “Business Guy”

I read an intriguing blog post titled “What the Hell Does a “Business Guy” Do? by serial entrepreneur Rob Walling.  The basic premise of his post is that the only compelling reason a “technical founder” should bring on a “business founder” (BF) as a partner is if that BF has “successful marketing experience”.  While I agree that marketing, specifically customer acquisition, is probably the most important and difficult problem to solve in a startup’s early days, I believe there are other important aspects of both building a team and a foundation for scaling the business that technical founders (in my experience) don’t always possess.

Of course I’m biased, because I represent the BF that Rob discusses.  Having been on the ground floor of 3 startups as the lead business and operations person, there are a few consistent areas of value that I’ve seen critical to early stage success, in addition to the marketing/customer acquisition skills Rob mentioned.

I would define these areas of value in the context of what I believe a BF profile must look like.  In my opinion, a credible BF needs to have demonstrated operational success in a startup environment, from early product development through financing, rapid growth and scale, including:

  • has been through multiple early product fails and iterations
  • has a high tolerance for ambiguity, chaos and daily priority changes
  • can contribute immediately in at least one critical business functional role at the outset – Marketing or Biz Dev ideally
  • has navigated a financing from external investors
  • has built a cohesive, uber-talented team that are the best at what they do AND that share similar culture sensibilities and work ethic (this is hard to do)
  • has successfully acquired and scaled customers, partners and revenue
  • has established metrics for tracking business success and a way to reliably measure and adjust
  • has battle scars, fail stories and an ability to articulate why the same fails won’t happen again.

So, this BF is not just a strategist or marketer, but a true partner to the entrepreneur who has a unique ability to take the entrepreneur’s vision and build a real business out of it.  The importance of this experience should not be underestimated.  True visionary entrepreneurs typically have an “anything’s possible” belief system and won’t be deterred.  Balancing that perspective with someone who can implement and tolerate that kind of ambiguity and chaos is paramount.

If the technical co-founder has experience in all these areas, then yes, I agree with Rob that partnering with a non-technical founder may just represent unnecessary equity dilution, but I’d venture there are lot’s of new businesses being created right now by super-developers without these important experiences under their belts.

Some might argue that all of these skills don’t have to be wrapped up in one person and that they don’t have to all be present at the earliest stages of a company’s development.  It ultimately comes down to the skills and experiences of the original founder, but having a BF partner who has been through the “business building” process successfully can ensure the correct sequencing of process, people and technology and let the entrepreneur focus on high value creation – strategy, product and funding.

What do you think?

The Incredible Business of Water

I read a really interesting article yesterday in Fast Company, one of my favorite publications, about the world’s use (and misuse) of our most precious commodity – water.  There are two aspects of this story that I find really compelling.  First, some of the statistics on water use are truly staggering.  Second, there are enormous business opportunities not yet fully exploited around the data analysis and management of water, which I’ll explain further.

First, some data.  Most of us arguably take water for granted, but there are some statistics that are shocking to me –

  • 4 out of every 10:  People in the world that have no access to clean water or must walk to retrieve it.
  • The U.S. uses more water in a day than it uses in oil in a year.
  • The U.S. uses more water in 3 days than the world uses oil in a year.
  • 5,000:  Children who die from lack of water or from waterborne disease each day.
  • 528 Gallons:  Amount of water required to raise and process food for 1 American’s diet for 1 day.
  • 250 Gallons:  Amount of water necessary to generate 1 American’s electricity for 1 day.
  • Intel and Coca-Cola include water use and the risk water scarcity represents to their businesses in their Annual Financial Reporting.  Intel addresses water issues on its website.

According to the article, despite these statistics, there has been little focus by big business on the economic value of water, meaning the value of things we can do with water – brew coffee, grow wheat, process microchips.  Because the price of water itself, especially in the developed world, is so low, we act as if clean, on-demand water has zero economic value – it has indispensable usefulness, but rarely has a significant price – at least, so far.

This leads to the second compelling issue for me – there might be real opportunity to develop systems, software, analytics, etc. to help businesses measure, track and ultimately reduce water dependence and cost, particularly if water is not the core business, but rather an input that is likely getting ignored.  In my experience, what you don’t measure and track is likely inefficient, costly and lacks innovation.

Take the case of Coca Cola, a business where water IS a focus, is diligently measured and teams are created to focus on minimizing water use.  It actually takes 5 liters of water to produce each 2 liter bottle of Coke, which is a 9% improvement over just 5 years ago, or 8 billion gallons of water per year saved.  Still seems like a lot of water use for the end product to me, but goes to show the opportunity.

And the article discusses how “water is not smart”, meaning a water network moves water, but very little information about it.  And water is typically not measured in a way that allows you to manage or optimize its use.  IBM estimates that of the $400B industry water represents, the “smart-water” information technology sector could be worth up to $20B annually, and there’s currently very little innovation in this sector.

Sounds like a great new startup opportunity!  What do you think?

What Kind of Leader Are You?

There are so many different kinds of leadership & leadership styles.  A broad categorization might include People leadership (management) and Subject Matter leadership (expertise).  Then there are various styles of leadership – inclusive, authoritarian, hands on/off, etc.

I would like to talk about People Leadership in this post, and specifically leadership in a startup or early stage organization where innovation, speed, energy and passionate engagement need to be the life blood of the organization.  My leadership style for direct reports is very much one of inclusion, collaboration, and support to enable people to perform at a high level.  But it all starts with the team composition and quality from both a skills and personality standpoint.  This will be an oversimplification, but I see the “process of people leadership” something like this:

  1. Ensure the individuals on your team are the most skilled at what they do.  I’m specifically talking about pure intellectual horsepower and subject matter expertise.  Every individual that works in my current organization goes through skills testing, both general intellect and functional specific.  There are homework assignments that are evaluated in a panel/presentation setting by a group of the prospective candidates peers and hiring manager.  This is an area I simply won’t compromise.  True story – I interviewed over 100 individuals for a critical VP Analytics/Statistician role I was trying to fill.  The skills test was nearly impossible, taking a consultant 3 months to solve.  Most candidates fell flat, some solved 10% of the problem.  My eventual hire solved the problem and recreated the statistical model, in its entirety, over a weekend.  Find the best no matter how long it takes.  The best team wins, always.
  2. Direct reports must have the right personality and cultural sensibilities to gel with your leadership style and culture you desire to create.  This is really important and I think often overlooked.  Team dynamics and how they operate as a team, not as individuals, will define the success of achieving organizational objectives.  I look for team members that share my philosophies on desired culture and management styles.  This does NOT mean, and this is important, finding “yes” people to agree with you all the time.  Quite the contrary, I explicitly encourage feedback and dissonance to create healthy debate.  The best idea should win, not the strongest personality or the person with the most authority in the room.
  3. Show up credible as a manager, leader and problem solver. I must inspire confidence in my team as a leader.  Have I provided a clear vision for where I am leading them (strategy)?  How do I treat people?  I often participate in even the most technical conversations outside of my experience, there is likely an angle to the problem that has not been considered.  My suggestion:  Inspire your team through your engagement in their work.
  4. Recognize what each individual needs – rewards, support, level of autonomy. Knowing this and responding to it on an individual level I have found will  maximize productivity, engagement and happiness.  I have also found that every individual can be widely different on these requirements.
  5. Become a master at conflict resolution and personality management.  All of us are different and respond differently to varying personalities.  It’s human nature.  I have also found that highly intelligent subject matter experts who are the best at what they do have a high degree of confidence that their way is the right way.  Getting different personalities to work together and facilitating the flow of information & communication in a way that creates a highly effective team environment is a lot of what I do on a daily basis.
  6. Encourage risk taking and let people fail. While I often hear this in organizations, I’ve rarely experienced a real commitment to it.  People may be given a second chance, but often the reputational damage discourages further risk taking.   A culture of innovation through a tolerance for mistakes and failures starts at the top of the organization, plain and simple.
  7. Make sure each individual knows clearly how success will be measured for the organization and for themselves.  This is an important point that I see too often misguided.  By setting rigid, documented objectives for individuals and tying compensation directly to these objectives can often result in undesired behavior, particularly in a startup or early stage organization where the continuous need for flexibility and adjustment for things as core as strategy and business model are paramount.  Don’t get me wrong, I see a need for written objectives and planning, but I also am explicit about how objectives can and will shift along the way and that there is no substitute for close and ongoing communication with direct reports.  I simply don’t get overly dogmatic on this point, especially since there is always a subjective nature to the review process.  A fully objective review process will undoubtedly lead to undesired behavior if there is even the slightest shift in objectives.
  8. When times get tough, real leadership begins.  I’ve been through some tough segments in organizations that I’ve run and you really learn about people when we go into “self-preservation” mode.  More than ever, I try to lead by example during tough times.  I over-communicate.  I really try to treat people with integrity and honesty through the challenging times and I’ve found by doing so it increases people’s tolerance for uncertainty, inspires confidence and increases loyalty.
  9. Don’t be a dick.  Seriously, this is a simple tenant but one I constantly review so as to not abuse the position of authority.  How are you perceived?  I have witnessed “dick” behavior destroy the culture of an organization almost overnight, morale sinks, motivation wanes, and at 6pm every night the place is a ghost town whereas before everyone was passionately working and collaborating long after the sun went down.

Airport Security – CLEAR

Today I flew back to LA from Denver and noticed the CLEAR program being marketed heavily in the security line with 4 or 5 kiosks, yet very little traffic going through the CLEAR line itself.  I was there at 5:30am and it looked like largely a leisure crowd going through an already steadily increasing security line.  Perhaps a bit early for the road warrior Monday morning folks.

I couldn’t help thinking that if I lived in Denver this would be the first thing I would do (after purchasing a new set of skis) – enroll in this program if the price point was reasonable, say $200-250 per year.  My experience with DIA is always greeted with long security lines because security is centralized in one location for the entire airport.

Once I actually landed in LA and dug into the research, this is actually a re-brand and launch of the failed Clear program across 18 airports that ended in class action lawsuits and bankruptcy back in 2009.  A new investment and management group has purchased those assets and is attempting to revive the program.  There are only 2 current participating airports (Denver + Orlando) but their presence at DIA security was prominent – multiple kiosks, attendants – you couldn’t miss it.

The program is $179 per year with an additional $50 family plan and this program is completely privately run, using biometric identification, same as before.  I think its a great idea provided there is a large enough ACTUAL time savings from the first class security lines to offset the cost of the program for the target consumer, which I assume is the frequent traveler – who will likely have access to first class security lines.  Perceived benefit I’m not sure gets you there, it’s gotta save time for the business traveler.

I think Denver is a great place to have this program.  Problem is, the only way I’d join the program is if my resident airport participated.  It will take a load of $179 subscriptions to pay for the operation I witnessed today, I’d like to see behind the curtain on those economics.  Particularly for airports where security is NOT centralized, like LAX and dozens of others.  The additional cost of hardware for convenient placement in a distributed airport, with more than 5 disparate security locations, has to quickly add up.  Well, I hope it works out and that LAX is next on the list!  Check ’em out at www.clearme.com

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