Mark Loranger of Braavo Capital

    We Spoke to Mark Loranger of Braavo Capital on How to Rebuild in the Post COVID Economy

    As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing Mark Loranger, Co-founder and COO, Braavo Capital.

    Mark Loranger is the co-founder and COO of Braavo Capital, the global leader in non-dilutive financing solutions for mobile apps and games. Since launching in 2015, Braavo had deployed over a quarter billion dollars to fuel sustainable, predictable growth for the $300B app economy. Throughout his career, Mark has operated at the intersection of technology, entrepreneurship and finance — aiming to design solutions to efficiently start, build and scale technology organizations. He previously held roles as COO at Updater and VP at Square 1 Bank.

    Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

    My career path has been pretty nonlinear, but the common thread is that I’ve always been within an arms-length of early-stage entrepreneurs and technology companies. I’ve helped launch businesses from within universities, run a startup division at a venture bank, made direct equity investments in seed stage companies, and been a co-founder and COO at multiple startups. These experiences all helped shape my perspective about how technology businesses should be built, and relatedly, how founders should think about what “success” really means for them.

    This brings us to my current company, Braavo Capital. My cofounder, Sergei Kovalenko, and I were introduced by a shared connection in the NYC startup ecosystem who thought we might “hit it off”. He was right. Despite coming from totally different backgrounds, Sergei and I share a similar worldview, vision, and values. As it relates to Braavo, we both believed that too many entrepreneurs are focused on raising venture capital, and the general over-reliance on raising venture capital is problematic for 99% of the founders out there.

    We started Braavo to provide an alternative option to technology entrepreneurs, with a focus on mobile app and mobile gaming businesses. We have a fully data-driven funding model based on operating metrics like revenue, LTV, and user retention. This removes the bias that founders might encounter when trying to raise funds through traditional sources. At Braavo

    We’re proud that the majority of our customers are based outside of the major US tech hubs. In fact, more than 50% of the half billion dollars in capital we’ve deployed since launch has been received by female-led businesses.

    Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

    Realistically, it’s difficult to laugh about any mistakes — even in hindsight — when you remember how every little mistake seems monumental in the early stages of company-building. But the mistake that seems funniest now is that we operated with a “placeholder” company name for over a year before we settled on Braavo Capital. Even our actual customers at the time couldn’t remember the name or how to say it or spell it (it was a made-up word). So you can imagine it wasn’t much help for marketing purposes.

    Even today, I see the old name occasionally in our database or tech infrastructure and chuckle because it feels like an inside joke among us that only our earliest team members and customers (some of whom are still with us) would understand.

    The lesson, if it isn’t obvious: your company name is critical! So, you might ask, why did we choose Braavo? The answer starts with a question: what do people cheer to “reward” a great performance? Bravo! Our funding platform is built to reward performance by providing funding based on the data that actually matters. It’s positive, affirmative and uplifting.

    Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?

    My career is an important part of my life, but I don’t necessarily read or listen to podcasts with a focus on career development. Learning is a lifelong process, so it’s hard to pinpoint a single book that had a disproportionate impact on me. But there are two books that have had a profound impact on me: The Agony and the Ecstasy, a biography of Michaelangelo, and Team of Rivals, a biography of Abraham Lincoln.

    The Agony and the Ecstasy provides inspiration and admiration for what a human can accomplish, and it’s written in such a compelling way that even as a disconnected high-school student (me, when I read it for the first time!) couldn’t put it down. As for Team of Rivals — I’d need a few more pages to describe the lessons and takeaways. But most importantly, it reinforces the belief that diversity of opinion, perspective, worldview, etc. — and the conflict and competition therefrom — can lead to the greatest successes.

    Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?

    Our mission at Braavo is to provide an alternate path for a more diverse set of entrepreneurs to be successful. “Path” is intentionally broad, since we provide multiple funding products as well as analytics to help our customers make better business decisions. Success for us is completely aligned with success for our customers — however they may define it.

    Do you have a “number one principle” that guides you through the ups and downs of running a business?

    Be authentic. Say what you mean, and deliver on what you promise.

    Thank you for all that. The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?

    As a company based in NYC with our second largest office in Barcelona, our team members were living in ground zero for the explosion of the western hemisphere’s COVID-19 experience. Aside from the health and safety concerns we all faced, the uncertainty of the future has been very difficult for many of us to deal with. Our Head of Product referred to it appropriately as “existential dread.” The advice I gave my team members was to solve for the things in your control. For myself and my family, that meant moving abruptly to New Hampshire in late March. We are fortunate to have a great network of family and friends in NH, but of course we were extremely sad to leave our home in NYC without a clear idea of when or if we’d be able to return.

    Short-term living arrangements aside, the pandemic has forced us to question what “normal” really means. It also makes it very difficult to plan for the future, when you really don’t know what that future looks like.

    Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?

    We are a venture-backed company, and although we’ve been very conservative from an equity funding perspective, we will likely need to raise more equity in the future. Furthermore, we rely on institutional credit partners to provide the debt capital that we use to fund our customers. When COVID-19 hit, VC investment dried up and the credit markets turned upside-down. In the context of both markets, you can’t price uncertainty. So we’ve needed to make planning adjustments to our budget, capital raising & valuation expectations, debt pricing and availability, etc.

    It’s also forced us to reconsider what KPIs matter most for our business. That’s meant shifting from a bias towards growth to a bias towards efficiency and profitability. Realistically, it’s been a healthy process and reminded us about why we started this business in the first place: we believe over-reliance on venture capital can be unhealthy for the technology ecosystem.

    In much the same way we were forced to re-evaluate our strategy, our prospective customers have had to do the same thing. Out of respect to the millions of people worldwide whose lives have been fundamentally affected — or lost — due to this virus, I have trouble saying that anything “good” can come from it. However, it’s certainly not a bad thing if entrepreneurs are forced to educate themselves about alternative sources of funding and become more aware of the downside of over-reliance on venture capital.

    One of the most rewarding things I’ve experienced in building Braavo is having the opportunity to see how apps can have a positive impact on everyday life, particularly over these past few months. From meditation and mindfulness apps to mobile games and kids’ education apps, our customers’ products have been playing a critical role in helping people survive and stay balanced during these challenging times. It’s empowering to see the clients we work with support everyone from health care workers to normal people, and feel that Braavo has played a part in contributing to greater well-being worldwide.

    Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?

    Focus on things you can control. Doing your best to plan for the long-term while managing the short-term, and finding the right balance of both, is also important.

    As a founder, I’m always try to think years in advance. Butin the past few months I’ve been incredibly focused on the short-term. Between that protracted outlook and splitting daycare of our 17-month-old daughter with my wife, it never feels like I’m doing enough work — or the most strategic work that I’d like to be doing. That can be demoralizing, but then I remind myself that I’m still more fortunate than 99.999% of the world. A little dose of perspective can help get things back on track.

    Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?

    I am cautiously optimistic that there are tremendous opportunities within the mobile gaming and mobile apps industry as people spend more time relying on their phones and connected devices for everything from mindfulness and mental health to personal connections and entertainment. That said, it’s difficult to know how user behavior will change during and after the pandemic and quarantine. In general, however, expect that however people behaved prior to the pandemic will not be the same afterwards. Along with shifts and pulling back in ad spend by major brands, ad conversion rates and ROAS may also be very different from months and years prior.

    As it relates to venture capital and raising equity, I believe that the recent trends of raising massive rounds at crazy valuations based purely on growth (or investor FOMO) will be adjusted. Operating efficiencies will hopefully be rewarded by long-term focused investors, who know that resilience is an important trait for companies in an increasingly uncertain world. It may become more difficult to raise funding, especially for newer entrepreneurs. With tech companies working remotely, spending lavishly on perks will also be reduced. And, people migrate away from major US tech hubs. I don’t think Silicon Valley / the tech sector is done, but I think it will look different — perhaps fewer lavish parties and more tech focused on critical issues and needs now (e.g., grocery, health, cleaning, connectivity). In general, a turn to more sustainable businesses over the next few years, moderated in some of the lavishness.

    How do you think the COVID pandemic might permanently change the way we behave, act or live?

    I’d like to think people will place more value on person-to-person interaction and connectivity. I vividly remember the first time we got to “hang out” with my family in NH after quarantining ourselves — we sat in lawn chairs in my brother’s driveway and just talked for a couple of hours. But it felt really meaningful. When I take my daughter and dog for a walk these days, it seems like more people are saying “hi” than I remember in the past, and that’s not a bad thing.

    On a personal level, the silver lining to all of this is that I have a much richer relationship with my young daughter. I’ve spent a minimum of 4–5 hours with her basically every day since March, which never would have happened otherwise.

    As it relates to work, remote-first or remote-optional will become much more standard than it was in the past for companies that don’t require an employee’s physical presence. Braavo has always been partially remote, since our development team is in Belarus, so we are comfortable in that environment. But for many, this will be a difficult — but hopefully, ultimately rewarding — adjustment.

    Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?

    Our biggest priority is having a clear path to profitability. To get there, we’re focusing on fundamentals: improving operating efficiencies, reducing spend in areas of unknown ROI, creating more predictable (and profitable) systems for growth. These are the things that really matter when you’re trying to build a sustainable business. We’ve reconsidered our short and long-term goals, and are now in the process of reverse-engineering the strategy and tactics to get us there.

    We don’t have all the solutions yet, but having a strong decision-making framework is a good start.

    Similarly, what would you encourage others to do?

    I try to avoid giving advice without much context. But broadly speaking, it would be:

    • Optimize your circumstances for your mental health and well-being. That’s most important in the long-term, especially in an ongoing crisis.
    • Give your team and yourself the benefit of doubt if execution hasn’t been perfect over the past few months, since we’re all dealing with our “stuff.”
    • If you haven’t already, start thinking about how to repair or work on your company culture. In one way or another, it’s been fundamentally affected.
    • Seek profitability, or at least understand and model for the scenario in which you have a path to profitability. This is healthy, even if you’re certain that you’ll be able to raise the next round of equity funding. Think outside the box, and educate yourself on alternative financing options available that will support you on the path to profitability, particularly in a challenging market.

    Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

    About 10 years ago, my girlfriend at the time (now wife) gave me a card prior to running the Boston Marathon with the “Man in the Arena” quote by Teddy Roosevelt: “The credit belongs to the man who is actually in the arena.” At the time, I don’t think many people were familiar with the quote, but by now I think everyone has heard it in some form. In any case, it really resonated with me for a variety of reasons, whether related to athletic challenges like running a marathon (which in the previous year I failed to do because of an injury) or in the context of being an entrepreneur. Not long thereafter, I decided to relocate from Boston to New York City because I wanted to leave my comfort zone professionally and further challenge myself knowing full well that I could fail.

    Regardless of what choices you make personally or professionally, I think it’s important to continue challenging yourself, understanding that failure is inevitable. We learn more from our mistakes than our successes, after all.

    How can our readers further follow your work?

    I’d encourage readers to sign-up for our monthly email newsletter on our blog. We share unique data insights from our portfolio and news that matters for mobile app founders. They can also follow our company updates on LinkedInTwitter, and Facebook. Finally, for my own personal/professional updates and news, I’m on Twitter and on LinkedIn.