For most of us, walking away from Microsoft with a few million dollars in the bank would be the end of a career, not the beginning of one. We’d consider a long vacation, at the very least. But after Microsoft IT Developer Martin Tobias left the company one Friday in 1997, he took the weekend off. The following Monday found him in his first meeting about his first startup.
Since then, Tobias has invested in 25 companies and built three of his own. The business models have been wildly diverse–online video followed by biofuels. This year, in Tobias’ third act, he founded Tippr, a daily deals site that is emerging as one of Groupon’s strongest rivals.
“I frankly haven’t had to work since I left Microsoft,” says
Tobias. “I’ve been doing all this entrepreneurial stuff because I
freaking love it.”
Tobias’ first company, Loudeye Technologies, quickly became one of the largest providers of audio and video solutions on the web. It went public in 2000, less than three years after its founding. With a successful IPO to his credit, Tobias joined Ignition Capital as a general partner, where he watched the tech scene–including Loudeye–stagger through the valley of death. (Loudeye was eventually bought by Nokia.)
Investment activity was so slow during the dotcom bust that Tobias was able to take a six-month break from Ignition and moved to New York City with his daughter. “I hung out, I went to some shows, fucked around, put my daughter in ballet classes,” he says.
Once the economy heated up again, Tobias got back into the startup hustle. He joined Imperium Renewables in 2004 when he invested in the company, then known as Seattle Biofuels. In 2005 he became the company’s CEO and was there in 2007 when they opened what was then the largest biofuel refinery in the United States, in Grays Harbor, WA.
In 2008, capital markets froze up once more. And once more Tobias quit and went on the road. He spent several months traveling the world surfing. Almost immediately, however, his entrepreneurial impulse began to twitch.
While staying at a resort on the Indonesian island of Sumba, Tobias was flabbergasted to learn that each gallon of diesel used to run its electrical generators cost $15, because of how isolated the island was. But all over the island you could see coconuts rotting away in the sun–when their oil could make a perfectly good biofuel. Tobias thought he saw the perfect opportunity to help set up a biorefinery on the Island. Why should the resort’s owner pay to import fuel when he could be paying local people to collect coconuts?
Hiring locals cost only $1 per person per day, and brought the price of fuel down from $20,000 per month to $4,000 per month for the owner of the resort, Tobias says. This arrangement also meant that wages would circulate in the local economy, instead of the money going off-island. It was a triple-bottom line idea: good for people, good for the planet, good for profits.
“I thought about going around the world doing that, but I guess I wanted to be back in the fun Internet stuff again,” says Tobias. Within the year, he was back in Seattle. Still, the idea of doing good on a local level stuck with him. That led him to his next venture, Kashless.org, a classified service that emphasized recycling and reusing goods, and sold ads to local businesses.
But he couldn’t guarantee skeptical companies a good return on their ad dollars. At the same time, Groupon was promising they could deliver customers to local businesses. Earlier this year, Tobias realized it was time to shift focus, and Tippr was born. Since then, it has become the third largest daily deals site in the U.S. after Groupon and LivingSocial. Tippr covers 13 cities, with more in the works.
Tippr takes advantage of the white label technology developed by Tobias and the Kashless team, which enables anyone to host daily deals on their own site. Tippr has inked deals with Yahoo, which displays Tippr deals on its Maps pages, and Belo Corporation, which owns 20 television stations. Because it amounts to a new platform, rather than a single site, Tobias thinks the value of his company could be far greater than Groupon (which recently walked away from a Google deal worth $6 billion).
The one common thread throughout Tobias’ entrepreneurial journey: a healthy dose of anger. With Imperium Renewables, Tobias was “personally pissed at the climate damage that oil companies were doing,” he says. “When I started Kashless, I was personally pissed that my friends in the local bar and restaurant business didn’t have effective ways to use the Internet to get people to walk in the door to their businesses. I’m saving small businesses that are run by my friends. That’s an incredibly personal thing.”
That kind of righteous fury, according to Tobias, is the secret to any startup. “Find a problem that personally pisses you off and solve it, and you’ll be a good entrepreneur,” he says. “The day that I wake up and I don’t have a hard problem to solve, I will
stop being an entrepreneur.”