Demo Days Highlight Big Apple's Diverse, Booming LGBTQ Startup Scene

Published in collaboration with StartOut, the LGBTQ Entrepreneur Community. To join Start Out, click here.
StartOut Spotlight is sponsored by Silicon Valley Bank Foundation.

From healthcare solutions to e-commerce to an app that helps musical directors manage their choirs, StartOut's New York Demo Days were an empowering success for a range of promising startups.

The event's success is a reflection of the city's thriving LGBTQ startup community-home of the country's second largest StartOut Chapter. "You can look to New York to see where Silicon Valley should be in terms of diversity," says Wasim Ahmad, veteran entrepreneur and StartOut Mentor and Advisor.

"As you look across the New York spectrum, you see a lot more diversity. While it's still true that if you join a Silicon Valley startup, it will be 95 percent 'bros.' In New York, that's not necessarily the case. There are far more women in tech here."

Another key difference: "People don't jump at huge risky ventures in New York," he says. "The approach here is let's take it step by step."

Eleven exciting startups participated in the recent Demo Days in New York, with more than 200 others in attendance. The event provided "real-time" exposure, funding and networking opportunities and feedback from industry leaders, Ahmad says. "The criteria was how well was the business-strategy articulated," he says, adding that "fundability," "traction," "potential" and "passion" were keys as well.

A Powerful Mix of Startups

Three winners of the event were:

QSpaces, which is transforming LGBTQ healthcare by sharing community-sourced ratings and reviews.

Dolphin AI, Software with integrated computer vision algorithms to analyze aerial imagery from drones, satellites, planes for P&C insurance companies to use for claims processing and underwriting.

Presentr, Mobile app that helps people share their ideas with passion and confidence through real time automated feedback on their presentation skills.

Other 2017 entrants and New York startups include:

Alfrea, allowing businesses to grow, eat and enjoy fresh grown food as employee benefit.

Caper, Delivering an online shopping experience to physical stores in an affordable, profitable manner for owners, and smooth and faster for customers.

Chorus Connection, choir management software.

Restaurant Reason, a training platform for full-service restaurants.

SkyMode, a mobile e-commerce platform enables brands to engage and transact directly with consumers, and

Translator LLC, offering tech solutions to help companies and organizations implement, scale, and measure Diversity & Inclusion efforts.

Winners and competitors share their stories and ways in which StartOut contributed to their success.

Bringing Fresh Food to Hospitals & Communities

After a career as a financial analyst in alternative and green energy technologies and as a subcontractor to the DOE, David Wagstaff founded Alfrea after seeing how poor food choices were impacting the health of his older parents.

"About 50 percent of healthcare expenses in U.S. are food related, including cancer and type-2 diabetes," says Wagstaff, who now has close to 6,000 clients in metropolitan Philadelphia and Southern New Jersey, including hospitals and medical facilities, providing fresh foods for employees, for patients as they leave the hospital and for the wider community of Camden, New Jersey, which has a high rate of diabetes. "It's a food desert. There are no grocery stores in downtown Camden."

"Hospitals are paying for employees to have access to a full suite of services for more than 4,000 employees," he says.

Wagstaff has participated in a range of StartOut programs. "I connected with StartOut about three years ago; I'm a gay founder. At first I signed up for a trial membership, then a paid subscription. I've been both a mentor and been mentored," Wagstaff says.

Software Simplifying Chorus Management

28-year-old Jacob Levine fused his love of choral music and background in tech to create Chorus Connection, software that makes it easier to handle all aspects of choir management in one place. A programmer since high school, Levine chose business over law school; he was developing construction management software with a friend when he realized his passion was to use his gifts for something he truly cared about.

"I was really enjoying the process, but had nothing in common with people we were trying to serve. While intellectually stimulating, wasn't excited to go to work every day."

A smart entrepreneur and member of the New York Gay Men's Chorus, Levine also realized choirs -- unlike construction -- offered a large, underserved market.

StartOut helped Levine reach out to mentors, advisors and other entrepreneurs for input. "For about eight months I was in my own Startup cave. I was trying to educate myself but missing dynamic advice. StartOut was first place I found a real mentor and they're the reason I've met two of my three business mentors."

For 2018, he sees a second round of funding to develop a scalable marketing plan and grow faster. "There are 300,000 choirs in the U.S. alone. Right now we have 132 clients and 50 of 200 LGBTQ choirs around world are using our software."

Training Restaurant Staff Right

Starting in the restaurant industry at 16, Restaurant Reason Founder Dana Koteen has been in the industry just over half his life, writing his first training program at 19 and working in different aspects of HR and hospitality. Leaving the corporate world two years ago to pursue the business full-time, he's created an SaaS platform for full-service restaurants to deliver effective staff training and increase profitability.

"The software evolved out of my pain-point as a manager in the business, performing the act of training in restaurants. I was frustrated with the way to create a solid system of training. You had to do all this administrative work. I was stuck between a rock and hard place," he says.

"My philosophical stance on training is that there isn't another way to drive revenue. It improves performance and retention," he says. "Everybody has to be trained but to do it right takes more time than you have (as a restaurant manager). So either people don't do it or they do it and it's just halfway."

Koteen discovered StartOut through his involvement with the young leaders council of New York's LGBTQ Center, as well as the networking group "Out in Tech." Restaurant Reason is gaining traction with New York restaurants, working with upscale, service-oriented clients like Craveable and Union Square hospitality groups.

Leading a Healthcare Revolution

Fed up with discrimination and incompetency in healthcare, Catherine Hoffman and wife Nic Anthony (a medical student) formed West Philadelphia-based QSPACES to provide the resources necessary to "help the LGBTQ community get great healthcare," Hoffman says. Their website is operating for Pennsylvania zip codes, with plans to expand by state or region as markets allow.

Hoffman says QSPACES is using a two-prong approach to transforming LGBTQ healthcare:

QSPACEShealth.com for the LGBTQ community to find, rate, and review health and wellness providers, and

QSPACEStrainings.com is services for providers, practices, and health systems to increase their competency and friendliness in regards to LGBTQ healthcare. We just launched our LGBTQ competency trainings for providers.

"I joined the StartOut community in early 2017. I've used their Forum to connect with other entrepreneurs. I am now a Premium member to connect with investors. There isn't a chapter in Philadelphia so New York is my closest option. The Demo Day was my first in-person event, and it was a huge success," says Hoffman.

Speaking Out

With 20 years as a trainer, Tim Wikstrom has seen how intense trainings could have positive impact on participants, who left feeling empowered and ready to take on the world. However, once they went out into the world to use their newfound skills, without consistent feedback bad habits returned and the polish wore off.

His "ah-ha" moment came when he saw his friends' kids playing "So You Think You can Dance?" The game provided "instant, impersonal feedback," and their progress was impressive. Presentr was developed based on this model, providing immediate feedback based on pre-determined criteria. Launched in 2014, it's a mobile app that helps people share their ideas with passion and confidence through real time automated feedback on their presentation skills.

Professionals -- gay and straight -- love Presentr's approach to presentation critique. Speakers can practice, check their scores and then try again, turning the process into more of a challenging game and less of a situation in which they feel 'judged' by a coach, Wikstrom says.

Most of the Presentr team is based in New York, but Wikstrom lives with his partner in Kansas City. "I didn't have a gay business network there. I'm a firm believer in collaboration with like-minded individuals and I found StartOut to be a really motivating format."

He adds, "This wasn't the first time I've attended Demo Days, but it was the first time I've applied to pitch. We approached Demo Days for funding, to find new new customers to pilot and help us build software along he way."

Developing shopping carts that integrate artificial intelligence (AI) isn't a new idea, but, up until now, prototypes have fallen short of industry demands. Sbot Technologies Inc., the team behind the Caper Cart, believes it's solved most (if not all of this riddle). New York grocery stores like Key Food are jumping at the opportunity to host pilot programs.

"It's a shopping cart with artificial intelligence. Ninety-eight (98 percent) of grocery shopping still happens onsite; so this is an untouched market," says Director of Sales Eduardo Sanchez-Iriarte.

Once its fully launched, the carts will not only facilitate grocery shopping -- allowing shoppers to check out through their cart rather than waiting in line or coping with awkward self-checkout -- but serve as both a market research goldmine (recording shopper preferences in a database) and shopping facilitator, offering recommendations based on past purchases.

"The cart will recommend products related to what you typically buy," he adds. "You scan the products with the cart, weigh products with the cart, pay and checkout (through the cart) and then bag your products and walk out of the store."

Like any proactive sales director, Sanchez-Iriarte brought StartOut to the attention of his otherwise straight team. "They're not gay, but I'm gay for sure. So why don't we take advantage of this opportunity?" He adds, "I like this organization a lot. It offers so many things to help business owners."

Though it applies, the term "on steroids" is so overused; we prefer to refer to SkyMode's mobile platform as e-commerce with a "jetpack." Launched in 2013, the platform enables brands to engage and transact directly with consumers through one-touch offers that increase conversion rates by 3x.

"The disparity gap is that while 70 percent of users look at products on mobile devices, only 20 percent are spending," says CRO Dave Siegfried.

Skymode is working to tap into this almost infinite potential market of browsers by cutting through the usual e-commerce shopping steps, often taking users seamlessly from offer (probably delivered via email) to purchase. "For example, suppose a brand sends you a personalized offer for a coat you want; they know you're interested because of other purchases you've made. Instead of directing you to the vendor's website, Skymode moves users directly into the purchase experience using a web-based platform," he says.

Siegfried is bicoastal, frequently traveling from Seattle to New York to meet with potential clients. "A good friend of mine suggested I join StartOut about a year ago, but there isn't a chapter in Seattle. So I've been engaging with the San Francisco and New York Chapters. I joined primarily to engage with other gay entrepreneurs and most of my interaction has been online." Today Skymode has eight clients representing over 50 brands, and they've set an ambitious goal of $1 billion in process transactions by 2020.

All of our thriving startups prove that networking, mentoring, access to best practices and funding opportunities with like-minded professionals pays off-across a wide array of industries.

EDGE Media Network and Start Out, the LGBTQ Entrepreneur Community, have teamed up to profile members of our community who are building exciting new businesses. To join Start Out, click here.

This story is part of our special report: "StartOut Spotlight". Want to read more? Here's the full list.