Startups are not for the faint of heart. That is not a problem for Michael DeFranco, founder and CEO of Lua, a young company that provides real-time communications software. Inspired by his Hawaiian heritage, DeFranco took the company's name from an ancient martial art practiced by warriors in the 18th and 19th centuries.
As DeFranco tells it, the warriors trained mostly at night to keep their techniques secret. The intense practice sessions were designed to build strong teams that could "move as one and fight without individual warriors seeing each other." DeFranco, who has been known to kick off meetings with Hawaiian war chants, thought that was an apt philosophy for his company.
Lua has more going for it than a cool name. Founded in early 2011 by DeFranco and co-founders Eli Bronner and Jason Krigsfeld, Lua was selected to be a member of the Techstars, a program that provides mentorship and seed funding, in March of 2012. Participation led to a $2.5 million seed fund round led by IA Ventures in August of 2012, which Lua used to build out its sales and marketing staff.
Lua released its product, a communications platform for mobile workforces, in April of 2013. It attracted clients like Team Rubicon, which uses it to coordinate disaster relief efforts; eBay Now, which uses it to help personnel meet targets for its experimental same-day delivery service; and the Alvin Ailey American Dance Theater, which uses it to keep its touring schedules running smoothly.
According to Lua, its customers see an average of eight sessions per day, per user and enjoy a 94-99 percent read rate on messages, with most users spending 45 minutes to an hour in the app each day.
In May Lua raised $7.5 million in a Series A funding round. It now employs 20, up from a staff of seven two years ago.
Early Entrepreneurial Influence
Early seeds for Lua's product were planted when DeFranco, as a high school student working with his parents' company iMapData, helped out with software combining maps with data layers that was used by disaster relief teams following Hurricane Katrina. DeFranco credits his parents, entrepreneurs themselves, with teaching him many important lessons about running a startup.
A big one, he said, involved finding a passion for your product. In his case, that passion is built upon the idea of using technology to solve real-world problems. "I became very passionate about applying technology in ways that can help the world. My core mission is building things that help," he explained.
According to family lore, his father visited his mother's hospital room shortly after she gave birth to DeFranco, put a laptop in her hands and said, "We need to finish these features we've been building." Yet DeFranco remembered times when his father would take a day off to go to a baseball game with him. "He was passionate about what he did and spent a lot of time doing it. But when he wanted to go to a baseball game with his kid, he could do that. I wanted to emulate that lifestyle."
DeFranco saw firsthand the need for real-time coordination among dispersed teams while working on a film shoot as a student at Wesleyan University in Connecticut. Film crews, with multiple units like transportation, hair/makeup and catering, have "a core coordination problem" that Lua's product is designed to address, DeFranco said.
His parents advised him to begin building his product even before graduating from college, telling him to "fail early and fail fast" and get as much feedback from users as he could. DeFranco took the advice to heart, having seen how his parents had weathered ups and downs with their own company.
Lua still works with clients in entertainment, "a highly mobile industry that is very dependent on real-time data," he said. In its earliest iteration, Lua's product also featured a map-based system, but the company began focusing more closely on real-time communication after garnering feedback from early customers.
Getting the Software Right
Among the earliest lessons learned, DeFranco said, were the importance of basic yet often-overlooked details like connectivity and battery life. Noting that not all clients had WiFi connectivity, DeFranco said Lua optimized its software "for one bar or half a bar." Optimizing battery life was another key, because "no matter how great your tool is, it's not going to work if your employees can’t use it," he said, adding the software is designed to "work using as little battery life as possible."
Lua's product was also one of the first pieces of mobile software to receive certification under the Department of Defense's Information Assurance Certification and Accreditation Process (DIACAP), which DeFranco said happened when Lua came into contact with the DoD "in the right place at the right time," shortly after the government agency had signed a cloud partnership agreement with Amazon."We were able to get the right annotations in our code base because we knew we were going to go through that certification process," he said.
Lua strives to involve clients into the development process whenever it can, DeFranco said, bringing them into its New York City office for frequent feedback sessions. He related an anecdote involving Lua client the Barclays Center. Lua's CTO and his wife attended an event at the stadium wearing shirts with the Lua logo. Spying the shirts, a security guard pulled out his phone, opened the Lua app and asked a few questions about updating his profile photo. "The next day the CTO came in with ideas for changes on doing file uploads for profile pictures and shared them with the engineering team at a meeting."
That kind of interaction with clients is important, he said. "We're able to drive more value by having that kind of a give-and-take relationship with our clients. We're getting better ideas every day because of that."
Mobile Edge and Future Roadmap
Lua's closest competitors are products like Salesforce.com's Chatter, Cisco's Jabber and Microsoft SharePoint, DeFranco said. While they are "great tools," he said, none of them were architected for mobile devices. Lua's mobile focus gives it an edge.
"We had mobile DNA built in from the beginning," he said. "The back end of our Web app is architected exactly like iOS and Android. When you try to develop mobile and serve the same tool set on the Web, you often end up with a bad experience switching between platforms. We deploy our Web and mobile software at more or less simultaneous intervals and try to update our software every seven days."
All of Lua's clients use the company's Web app in parallel with the mobile app, DeFranco added, usually deploying information out from the desktop and pushing it out to staff in the field.
Lua's software integrates with Dropbox, Google Drive and Box. While integrations with other services will come later, DeFranco said it's most important "to create standalone value for enterprises to take advantage of before you move any further."
He hopes to emulate Salesforce.com, which started with strong standalone applications before building out its Force.com development platform and AppExchange ecosystem. Box co-founder and CEO Aaron Levie is pursuing a similar strategy with the Box OneCloud platform.
"Our first iteration allows you to understand our feature set but also sync into those services so you can upload a Google Drive file or a Box file," DeFranco said. "Ultimately you'll be able to add new features from different platforms."
Quick Facts about Lua
Co-founders: Michael DeFranco, Eli Bronner and Jason Krigsfeld
HQ: New York City
Funding: $10 million, with investors including IA Ventures, Abundance Partners, BoxGroup and Social Starts.
Product: Real-time coordination software for mobile teams. Features include conference calling, group messaging and file distribution.
Customers: eBay Now, Alvin Ailey American Dance Theater and Team Rubicon, among others
Ann All is the editor of Enterprise Apps Today and eSecurity Planet. She has covered business and technology for more than a decade, writing about everything from business intelligence to virtualization.