FROM ADVENTURE RACING TO THE RACE FOR FUNDING - A WINNER'S STORY:

MEMBER SPOTLIGHT: INTERVIEW WITH KERI DEWITT,
PRESIDENT/CEO OF TERESIS MEDIA, INC.
Winner, "Best of Show", VentureNet 2004
Interview by Jennifer Beever

Founded in 2003, Teresis provides location-based digitizing, media management, and transcription services for unscripted television shows. With the boom in "reality" TV shows, Teresis is emerging to solve a critical need in the industry. We caught up with Teresis' President/CEO Keri DeWitt for this interview as she juggled pitches to investors, hiring interviews, a search for office space and the day-to-day running of her company.

What kind of experience do you have prior to starting Teresis?

My background is in systems integration, consulting, programming, application development - I rode the whole Internet curve. One of my first positions was with EMI Music Distribution, where I architected their North American intranet so they could put their sales reports online and save the costs of Fed-Exing materials. Later I worked for IKON Technology Services where one of the systems I developed for Toshiba America Electronic Division was nominated for a Lotus Beacon award. That got some notoriety, and I was recruited to the Bay Area to work for Net Objects and build a professional services organization with the Vice President of the Enterprise Division. She and I grew the division from a staff of 2 to 24 and $5 million in revenue in one year. I commuted about 100,000 miles that year, traveling to various customer sites helping sales. When Net Objects burned through its $75 million and sold off its Enterprise division, I saw the writing on the wall and took a position with VeriSign as a senior product manager in their International division.

How did you come to start Teresis?

In spring of 2002 Enron happened and the Internet bubble broke - I was laid off and there weren't any jobs to be had. I decided to wait out the recession and take the time to pursue something that had interested me. I came back down to Los Angeles, moved back in with a college roommate and enrolled in the Los Angeles film school. I studied everything I could - I was there twelve hours a day learning writing, directing, producing, cinematography, film and sound editing.

That same year, I did an internship at Fox, where they hired me as a production assistant making $500 a week - I was faxing, answering phones, walking the dog -working for 24 year olds. I think every executive should do that once in their career - where they come back and start over, go through the trenches and learn the particulars of multi-tasking. [laugh] The internship was great until they started shooting and all the tapes started coming into the office. They wanted us to log and transcribe them - there were six production assistants on the show. All we had for tools was an analog based system that was dependent on having a beta deck and a TV set hooked up to the computer - it was just prohibitively slow - it was taking us five to six hours to transcribe each 30 minute tape.

So, I came up with an idea and told the executives on the show that I could help them out by building tools that would save them time and money. By that time, they were so far behind on their schedule that they were running the risk of missing their deadlines. I called up a couple of friends and we whipped together the 1.0 version of what later became the Teresis Transcription Client. In one weekend, we got the show caught up. One of the executives came back to me and promoted me, paying me $50 more a week. [laugh] The creative director came to me and said, "You've really got something here, and I think you should pursue this as a business." I left the show as an intern, yet they continued to use that product and paid me as a vendor, so I was making a little money. Teresis saved the show about $30,000 over the course of that production.

After Fox, what did it take get your first customers?

I had applied all of my savings and credit cards to the project. A family friend invested $50,000. Talk about risk and fear. It's one thing to put your savings on the line and max out your credit cards and wonder when you're going to pay the utility bill, but it's another to take money from family or a friend who cares about you. And, to me, bankruptcy was not an option. My parents are deceased, and I didn't have any relatives to fall back on. I was really on a limb and trusting God. I made that $50,000 last a good six months, and we were able to get the product working in a 1.5 version. We did projects for a couple of clients - one for Showtime and one for MTV. I was it - I was the customer support person, the sales person, the marketing person…. About the same time, I started working with the angel investor groups trying to raise money. To say I was working about 21 hours a day was an understatement.

What was it like raising money?

In March of last year I was running out of the $50,000 that I had. A very large rental company in Los Angeles heard about the product and wanted to become the exclusive dealer of it for $600,000. Let me tell you, when you've only got about $3,000 in the bank and all your credit is maxed out that [$600,000] was pretty attractive. I think I aged about ten years that month. I ended up walking away from that deal, because the bottom line was it would have restricted Teresis in such a way that it would have put the company out of business. In essence, they would have been acquiring Teresis for $600k

It's interesting how things came together at the right time. A friend of mine introduced me to Chip Parker who runs the Keiretsu Forum in Long Beach. Russell Fine, a TCA member, gave me one hour of his time - the 101 of presenting to investors. I got through the screening at the Keiretsu Forum and got a little traction there. It was really the beginnings of being able to raise some money.

Someone at the Keiretsu Forum referred me to Rapid Text, a very large closed captioning and transcription company. They came in as a strategic partner and invested $110,000 in April. They saw an opportunity to gain penetration into the reality market, and they were getting more and more video handed to them. They liked the efficiencies that our tools would provide in their environment. Rapid Text had acquired a transcription company in Burbank, and they licensed 60 Teresis transcription clients from us to use at that facility. It was a good thing that I had waited and not succumbed to the earlier offer!

As I was pounding the pavement around that time and looking for investors - two or three people referred me to Dave Burkus. Dave is a very successful entrepreneur and the former Chairman of the Tech Coast Angels. Dave and I corresponded, and he came out to Rapid Text and saw a demo of the Teresis technology. He was interested in bringing us to Tech Coast Angels, but there was some "hair" that needed to be cleaned up first.

What is "hair"?

Being a novice at raising money, I had gotten mixed up with some advisors/consultants who were basically attempting to milk [my] company dry. There are many people that seem to approach you with the intent to be helpful, but they really have their hand out and want to get hooks into your company. In my situation where you're desperate for anyone to take interest and to get some traction going and not having a lot of experience, it was hard to discern whether these consultants were going to be helpful or not. Fortunately, we didn't have contracts in place and so that made cleaning it up a lot easier I learned a lot through this process.

I went back and very gingerly cleaned up this "hair" that was in the company, and I brought on another investor that I met at the Keiretsu Group, Eric Meyer. Eric was the CIO and co-founder at NetFlix. Eric helped me clean up some of the mess. Richard Koffler and Dave Berkus of Tech Coast Angels also helped me to recognize these potentially harmful relationships and advised me on how to clean them up.

What's it like working with Tech Coast Angels?

The first screening I had was in Los Angeles, and they had just implemented the grading system. Over the course of the summer and presenting at all three of the TCA groups (San Diego, LA, and Orange County), Teresis achieved the highest ranking. There were many meetings and due diligence sessions that led to a term sheet with TCA and a lot of investor interest. It also opened the door to the Pasadena Angels and the Software Council's VentureNet 2004.

What was the biggest challenge in gathering information for the business plan?

The business plan was like a term paper that would just not die. I didn't think I would ever get it completed. I think I did 67 revisions on that document. I worked with Eric Meyer to create a real financial model, did the marketing research to support it, all at the same time of supporting our customer and continuing to do product development.

Dave Berkus, Russell Fine, Richard Koffler of the Tech Coast Angles would give me advice , and I'd just go out and do it. I had worn a lot of hats at my corporate jobs, but I had never had been privy to the financial aspects. But the people I met a Keiretsu and the Tech Coast Angels provided me with that coaching. For a young entrepreneur like myself, it really helped me to prepare the company for due diligence.

My whole life I've been an athlete. I was first successful in softball, and then I went on to get an NCAA division one scholarship for basketball. That is what brought me to California from Missouri. Then, post college I've been an adventure racer, and now I'm embarking on triathlons. I'm currently training for the Ironman in Canada next summer. I've always had great relationships with my coaches and bosses. I have found the same sort of great coaches and mentors within Keiretsu and TCA. It is these relationships that will help me to take the next step in my career which is to grow and run a company.

You worked at big companies - how do you like being an entrepreneur?

Of all the jobs I've had, the one that I had the most fun with prior to Teresis was at Net Objects when I and a VP were building the professional services group. We had the benefit of a safety net of being in a broader organization, but we got to do all the same entrepreneurial things. When I worked at other jobs, there was such a bureaucracy - so boring. No one could make a decision and it was hard to feel or see that I was really making a contribution.

When I was at VeriSign, I knew in my heart that some way, some how, I needed to change careers. In the fall of 2001, I wanted to do a big adventure race. Someone posted a need for teammates for the Eco Challenge. I jumped on the opportunity and got on the team. VeriSign actually sponsored me. When I got to New Zealand, it turned out that we were on a focus team - this was Mark Burnett's entrée into television. He chose five teams to follow with television cameras, including ours as the rookie team. While racing day and night, I picked the brain of the camera person that was traveling with us. It was then that I got a glimpse of the television industry and thought that there is a whole other world out here that I would love to have exposure to and that somehow I could start a company that could be a part of that.

What's been the biggest win for you?

There have been several - the friend investor from last fall, being able to present at Keiretsu Forum, meeting Russell Fine, Eric Meyer, Dave Berkus, Jan Smith and switching attorneys and working with Sheppard Mullin - you really need to have people around you that you can trust and who really know the company.

I think the biggest win was the momentum within Tech Coast Angels and being able to participate in the due diligence and presenting structure. It's a very organized and practical, efficient way to move a company through the process.

What was it like presenting to so many people at VentureNet?

I'm normally not nervous, but that day I was so nervous - I had gone to the VentureNet screening, where I got a lot of great ideas for how to improve and keep my presentation to ten minutes. I didn't have time to make the changes ahead of time, so I made them that same day. I had to relearn the presentation right before I presented.

What's your next step?

I presented at a new Tech Coast Angels screening in Santa Barbara recently and Pasadena Angels are completing their due diligence. We're hoping to close this round in the very early part of November. At the same time, I'm interviewing people for key positions and looking for a real office space. Soon I'll be able to delegate the many hats that I've been wearing to team of employees and we'll be able to ramp up and go after sales.

As a manager, I'm absolutely striving to build an environment that is fun where we trust each other, work well together, and have the same vision: where we'll work hard, but we're really enjoying it. I want to recreate that same feel that I had a Net Objects. When you work that hard and put in that many hours, the environment needs to be a place where you can have fun.

I'm striving to build a company of integrity - it's ultimately a reflection of who I am and my reputation. I want to be viewed as a person of my word and who delivers, and that's what I want the image of our company to be. I want our company to be viewed as a company that is reliable, a great company that will work with customers - not a company full of ego, but one that says let's figure out what the right thing is and then do the right thing.

What's your long term vision - will you want to stay on as CEO?

I want to build a good company that is profitable and a landmark in the industry and I also want to provide a great return for all the investors. After Teresis, I personally would be so blessed to get the opportunity to go out, build another business, and do it again.

 

Teresis Media, Inc. is located in Burbank, California. For more information, email info@teresis.com or call 310.595.4236.

Interviewer and Software Council member Jennifer Beever spent 14 years in the ERP software industry prior to founding her marketing consulting firm, New Incite, in 1997. Jennifer helps companies create and implement systematic, planned marketing strategies. Contact Jennifer at 818-347-4248 or jenb@newincite.com.

 

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