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					BUSINESS PROFILE

Tatango.com dances onto the national scene
Text messaging startup secures angel funding
By Tara Nelson
Photo by Mitch Moquin (L-R) Adrian Pike, Derek Johnson and Andrew Dumont have traded late nights at the bar for late nights at their burgeoning business, Tatango.com.

told him he couldn’t get into business school. Even with a 3.7 grade point average and extra curricular activities, school administrators told him they only had so many resources. Now, at age 23, Johnson is the founder and chief executive officer of Tatango, a Bellingham-based startup company that provides free Web-based group text messaging and voice call services from their Web site, Tatango.com.
The company is already the largest group text messaging site in the U.S. and is continuing to grow its user base to more than 400,000 users with 5- to 6 million text messages per month. Just three years ago Johnson was attending the University of Washington in Seattle, but switched schools when his counselor told him he couldn’t get into the business program there. So, at the age of 21, he moved to Texas

DEREK JOHNSON’S COLLEGE counselor

to attend the University of Houston, where he spent a year in a business entrepreneurship program. “That’s where I got the idea,” Johnson said. “I was having lunch with a friend of mine who was part of a sorority and she told me she was having problems communicating with the girls in her chapter. I went and looked online and there was nothing out there that could have met her needs. It just

kind of took off from there.” Instead of waiting to finish college, Johnson decided to enter the workforce, getting real experience on the job. He moved to Bellingham, where his family lived and had several business connections with the help of his father, a local business owner who once worked in marketing for a Fortune 500 company. From there, he and a friend – former business partner Matt Pelo – formed NetworkText, now known as

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“Once we kind of knew we had something, we decided to take some time off school and put in 100 percent. It was the best decision I’ve ever made.” Derek Johnson, Tatango.com

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Tatango, setting up shop in the basement of his parents’ home. “Once we kind of knew we had something, we decided to take some time off school and put in 100 percent,” he said. “It was the best decision I’ve ever made.” The two formed the initial groundwork with small investments from their fathers, both of whom had extensive business experience. Later, they were able to secure a second round of financing from a wider group of friends, family and business leaders in the community. Their most recent funding, however, came from the Bellingham Angel Group, a network of local business professionals looking to invest in startup companies. “Tatango is a promising company with a sharp team and a product with a lot of promise.” Bruce MacCormack, Bellingham Angels Group

part-time employees to their management team. They were also able to find a large office space on State Street owned by Exit Realty. “No one really wanted to rent to kids our age … Exit Realty, however, has been really flexible with us,” he said.
THE DAILY GRIND

Dumont said an average day consists of arriving at the office around 9 a.m. and working for several hours

straight. Lunches and dinners are typically eaten at various downtown restaurants such as La Fiamma, Boundary Bay, Bob’s Burger & Brew, Avenue Bread or Wasabi sushi. Around 10 or 11 p.m. the crew goes home to get some sleep. The schedule might sound grueling to some, but for these 20-somethings who sport jeans, polo shirts and consume several cases of Red Bull each week, it’s all part of their fun. They only recently created the rule they

Bellingham Angel Group Chairman Bruce MacCormack said after Tatango presented at the Bellingham Angels’ February meeting, five members decided to invest in the company following a due diligence process. “Tatango is a promising company with a sharp team and a product with a lot of promise,” MacCormack said. “It is a pleasure to be able to invest not only in a vibrant new company, but to invest also in our local economy and our community at large.” In 2007, Pelo, however, decided it would be best to finish college and sold his shares back to the company. Johnson has since hired two new fulltime employees – Western Washington University sophomore Andrew Dumont, 20, who is vice president of business development; and recent Western computer science graduate Adrian Pike, 23, who is now chief technical officer. They also added three
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BUSINESS PROFILE
must take one day off per week. “Sometimes it works but not always,” Johnson said. “I don’t make them work, it’s just that we love working and there’s so much to do.” Dumont agreed: “Taking off work is one of the hardest things. It’s like a bug that bites you. A lot of people we know can’t handle it. But for the people that really like it, it’s perfect for them. It’s a different kind of lifestyle.” Advice from Derek Johnson for young entrepreneurs
1. “Start small and you will be able to quickly see if you have something interesting before you look to expand. Don’t think you’re going to go to a bank at our age and get financing. We started Tatango with almost no money in my parent’s basement, with borrowed desks and our computers from college. You have to start small and you need to stay focused, and work hard to prove to others that you have something worthwhile. Young people have dreams of starting off big, but it takes time to build something of quality.” 2. “Always be available. The whole Tatango team is available and taking calls 24 hours a day, seven days a week. In an age where a lot of other companies just aren’t there, that sets you apart. And listening – our users have given us a great amount of feedback, and are the sole reason why we keep launching features that users love and our competitors copy.” 3. “Our generation hardly ever asks for help, but in our company, we thrive on advice and feedback. It’s easy when you’re our age, everyone wants to help and lend you a hand, which makes it a no brainer not to ask for it. In addition, we have an advisory board of nine volunteer members that advise us on legal, accounting, business and marketing and have been a great asset to the company.” 4. “Don’t waste time in getting rid of employees that aren’t working out. I find it’s relatively easy to find employees that have the needed skill set to get a job done; the real challenge for us is to find employees that fit within the culture that we have created at our company. Be extremely picky and focused in hiring, and this will lead to a strong core team.” 5. “No matter what problem you are experiencing or challenge you have in front of you with your business, you aren’t the first person. Seek out advice or guidance from someone that has gone through the same thing you are going through, this will save you from making a lot of costly mistakes in the future.”

“I know it sounds ridiculous, but this is fun. I would rather be working than going to bars with friends. And we’re getting a lot of respect from adults and business community.” Derek Johnson

TARGETED AUDIENCE

The three young business professionals agreed part of what has made Tatango such a success is its universal appeal. Customers range across the nation from Seattle to Florida. Whatcom County customers include Bellingham bars and nightclubs, businesses, restaurants, sports teams, including Western Washington University’s basketball team, and a variety of student groups. “Every single person in the U.S. has a group they can use, whether it is family, youth group, church, your business, your fishing buddies; it applies to every type of group,” he said. A strong belief in protecting users’ privacy is another key feature. Johnson said spamming users with unsolicited messages is strictly frowned upon. What’s more, the service is completely free to users and revenue is generated through advertising – each text message displays a short ad at the bottom of each message. Their premium service also allows users – often businesses and churches – to have the advertise-

ments removed or implement their own ads. The basic service for most users, however, is free. “We’re extremely careful on user privacy,” he said. “There is also no way for a leader to get people into their group without people opting in.”
FUTURE GOALS

Johnson said in the next three to five years, he hopes to be looking for an exit strategy and getting several more startup companies off the ground with the team he currently has. “We’re still young enough and we still have a lot of energy,” he said. “Maybe we’ll take a few weeks off but the spirit is kind of ingrained in us. We can’t just sit still. “I just see myself doing what we’re doing. I’m one of those people who likes to build things up and then build them up again. I’m not one for maintaining things.” Dumont added they are focus-

ing on building up their client base and expanding internationally, starting with Canada and the UK. Within the next four to five months, they will also be looking for another round of angel funding or venture capital funding and perfecting their new voice message calls network, which is currently in the pilot phase. In the meantime, however, kids will be kids, or at least young adults. “We’re not some super geniuses, were still kids,” Dumont said. “Our friends are out playing Playstation on the couch. When our friends are on the way home from the bar, it’s Friday night at 1 a.m. and we’re at work because that’s what we like to do. “I know it sounds ridiculous, but this is fun. I would rather be working than going to bars with friends. And we’re getting a lot of respect from adults and the business community.”

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