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Wednesday, May 18, 2022

Matt Coffin: New Wave

When Matt Coffin was hit with a high mortgage payment and $1,300 cell phone bill in 1999, he got an idea for a company to help alleviate financial woes like his. Family and friends liked the idea, so he started LowerMyBills.com, a website where people can compare rates for home refinancing, TV services and other household expenses. The company survived the dot-com crash of the early 2000s and made Coffin one of the most successful young technology entrepreneurs in Los Angeles when it sold to Experian for $330 million in 2005. In the years since, Coffin has become an active angel investor in L.A. tech companies. He’s put money in more than 30, including Mahalo.com and Ad.ly Inc. And he recently had healthy returns from Demand Media Inc., which went public at the beginning of the year, and Hautelook, which sold to Nordstrom in February. Coffin returned to his entrepreneurial roots last summer by co-founding FamilyFinds.com, a daily deal site specializing in local products and activities for families. The company has already expanded into Chicago and plans to offer deals in more cities by the end of the year. Coffin recently sat down with the Business Journal in his sparsely furnished office at FamilyFinds headquarters in downtown Santa Monica to discuss his two children, the challenges of running a tech company after the dot-com bubble burst and why Jan. 11, 2005, was among the most important days of his life.

Question: Have you purchased any of the deals that FamilyFinds has offered?

Answer: Yes. There is one deal that my daughter does not stop talking about. It’s a product called Label Daddy, where you personalize a label with your name and a picture.

Did the inspiration for FamilyFinds come from your children?

I spent a lot of time watching the success of Groupon and generally this local deal market. But I was seeing things that weren’t really relevant to me. I thought, “Wow, there should be something more geared toward the things that my wife and I are thinking about as it relates to our children.”

Tell me about your kids.

I have two children. A 6-year-old named Orchid and a 2-year-old named Sky.

Those are interesting names.

Thank you. Like most good ideas, they came from my wife. An orchid is my wife’s favorite flower. And, because we love the outdoors and wanted something sort of organic, we chose the name Sky.

Where did the idea for your first company, LowerMyBills, come from?

My wife and I had just bought a house in Beachwood Canyon. The same day we moved in, I received the first mortgage bill and a cell phone bill for $1,300. I was thinking I had to do something.

From that idea you decided to start a company?

I talked to my wife and friends, and everybody really like the idea. Then I dialed 411 in L.A. and New York and asked the operators if there was a company called LowerMyBills or something like it. Both operators started laughing and said, “No, but I need that so if you find it, call me back.” I felt like the idea resonated so I decided to quit my job at a magazine publisher. The worst thing that could have happened was that it failed and I had to go get a job.

That’s ambitious.

This was prechildren. So I quit my job; my wife had quit her job. At the time it didn’t seem like a big deal.

Did you have experience running a company?

I had started a magazine in New York that was undercapitalized. I learned not to start a business in a consolidating industry. When I quit my job, I was working for a magazine publishing company here in Los Angeles.

Was it tough to start your own shop?

Not really. Everything just felt very natural. The hard part was really more that I was suddenly thrust into leading, managing, envisioning and selling for the company simultaneously.

How did you survive the dot-com crash in 2000?

We had a great team back then. We just got focused on what was important. And we got very focused on profitability. If something didn’t make money, we didn’t do it. We were running out of money despite doing better every month.

Sounds like a rough time.

We were really living the LowerMyBills mantra.

How so?

At one point, we really needed to move out of our office in North Hollywood. We were so crowded that our conference room was a huge couch in the hall where people also ate lunch and did job interviews. We had a shower curtain up to separate things.

Were you able to find a bigger space?

I was convinced that we could get a killer deal because companies were imploding everywhere. I gave an offer for space in a building on Wilshire. I told the guy that since we were an Internet company, we were probably going to go out of business. I’d write him a $100,000 check and buy the furniture the last company left in the office for $1 so he wouldn’t have to pay to move all of it. He told me I was an idiot.

So you didn’t get the space?

An hour later he called me back and said we had a deal. Twenty-four hours later, after I moved in, I liquidated half the furniture and made back my $100,000. One week later, I rented out part of the space to what became Myspace. That was the first profitable month that we ever had.

What was the hardest part of those years?

Probably the toughest part was when I would huddle with my head of finance and think that we might be done. Then I had to go out in front of the company, put on my game face and be happy and optimistic.

What did you learn from that experience?

Getting through the Internet implosion and surviving was a turning point. It showed me I could do it, that I have the ability to persevere and to generally make the right decisions.

Why did you decide to sell the company?

So here’s a funny little story. My daughter was born at 8 a.m. on Jan. 11, 2005. At 6 p.m., I got an e-mail from the company that we had our first $1 million revenue day that day. And at 8 p.m., I walked from the hospital to Jerry’s Deli to look at a term sheet for an offer from Experian to sell the company. It all happened in the span of 12 hours. It was insane.

Did having a child factor in to your decision?

Yes, my daughter being born was the turning point. I loved the business. Many of my great friends were working there. But having a daughter really got me thinking that I really had a life-changing experience that I could take advantage of. So I did. It was with mixed emotions that I sold the business.

Who have been your biggest influences?

My wife is No. 1. Most of my good ideas are probably hers. Steve Jobs has been influential in terms of how I think about stuff. And probably my friends, many of whom are entrepreneurs.

How did you start angel investing?

I started doing a little bit of investing while I was still at LowerMyBills. My goal was that I’d make two or three investments.

You didn’t stick to that plan.

Yeah, roughly 30 investments later I’m still talking about only investing in two or three. I love investing. I want to help other entrepreneurs achieve some of their objectives. I love the naïve entrepreneur who thinks he can get something done despite everything tell him that it’s impossible. In many ways, I was a naïve entrepreneur, too.

You’ve had some good results from your investments. How do you choose what to invest in?

I’ve been lucky. The thing I’m looking for is ridiculous passion around what you’re doing and some sign that your customers actually care about what you’re doing. I want an entrepreneur who is a decent listener who is interested in what you have to say. And I look for people who are serial entrepreneurs who still have a ridiculous burning desire to make a ton of money or create a good product.

So did Demand Media and Hautelook make you a bunch of money?

Yes. I invested early on in both businesses and I would say, primarily due to great teams at both places, the outcomes were terrific, ranging from five to 12 times my investment. My expectation is that a number of my other investments in the L.A. Internet industry will result in 10-times-plus returns in the next six to 36 months.

What advice do you give young entrepreneurs?

Focus is everything. You’ve got to be focused. Communication is really tough and way harder than you think. And raising money is not an outcome. No entrepreneur should think raising money is the win. The win is building a great product and generating profits.

How do you juggle your own company with your investments?

Right now I spend 80 percent on FamilyFinds and 20 percent on the other companies. I’m not waking up every day and looking for an investment to make.

What do you do in your free time?

I like to do things. I’m very activity oriented; everything outdoors. I surf, ski, fish, boat and play basketball. Having kids was a big change. So now I spend lots of time with them doing everything from crafts to reading books.

Did you always want to be an entrepreneur?

I was always interested in starting my own business. That’s why I ended up at Babson. I saw that they offered this entrepreneurial studies degree.

Were your parents a big influence?

Growing up, my parents ran a hardware store. I saw how that went and how great it was to be in charge. But I also saw how stressful it was. I used to always question my dad when we would be halfway home and he’d turn around to go check if the front door was locked. But I realize now that I’ve done that. Tech companies don’t have a front door in the same sense, but I find myself checking on the company in the same paranoid way.

Did you grow up in a small town?

It was tiny. There were about 2,500 people.

What was that like?

As a kid, I couldn’t wait to get out of there. But as I got older and had a family, I started to realize how beautiful it is there and how nice the people are.

What brought you to Los Angeles?

My wife had been running a model agency in New York and decided to leave. We always loved California for the warm weather and the palm trees so we came.

What part of town do you live in?

We’re house-hunting. We’ve moved all over the place.

Do you have a memorable spot?

When I started LowerMyBills, I realized I would never be going on vacation because I’d have no money and be working long hours. I said to my wife, “Let’s go down to Malibu and live there. Sundays will have to be our vacation.” So I rented a little duplex. It was the cheapest, most inexpensive thing I could find. It was great.

Why’d you move?

Eventually I just couldn’t make the commute to North Hollywood. The day we left, my wife was crying because she was upset that we were leaving the beach. So I told her not to worry about it, that we’d come back and buy a house here one day.

Did you?

I really just said it to stop the crying. But when I sold LowerMyBills, I went back to Malibu and bought a house. I fulfilled the promise.

Matt Coffin

TITLE: Chief Executive and Co-Founder

COMPANY: FamilyFinds

BORN: Baltimore; 1968

EDUCATION: B.A., finance and entrepreneurial studies, Babson College in Wellesley, Mass.

MOST INFLUENTIAL PEOPLE: His wife, Natasha; Steve Jobs; entrepreneur friends.

CAREER TURNING POINT: Surviving the dot-com crash of the early 2000s at LowerMyBills.com.

PERSONAL: Married with two children, Orchid, 6, and Sky, 2.

ACTIVITIES: Surfing, skiing, fishing, boating, spending time with his family.

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