Incubating at Cogo: Finding the Right Fit

One question we hear a lot in interviews is “Where do the ideas for new businesses come from?” And the easy and short answer is “From our employees.” The reality is a little more complicated than that, of course. Starting a business, at Cogo or anywhere else, is a lot of hard work, and we don’t always get things right on the first try. 

While it’s not that hard to come up with a business idea—think Edison’s ‘ninety-nine percent perspiration’ quote—it can be very difficult to come up with a model that will succeed given the twin constraints of market reality and available resources. In the case of our consumer finance team, Uplift Financial, that meant co-founder Matt Albrecht had to explore multiple options before coming up with a path that was both economically viable and a good fit for the Cogo way of doing things.

Which brings us to an interesting question: What is the Cogo way of doing things? While we consider ourselves to be first and foremost a tech incubator, we’re definitely a little on the non-traditional side. Here are a few key things that set us apart from other venture-backed incubators:

  • We don’t solicit external applications. People often think of Cogo as being similar to Techstars or Y Combinator, but the reality is that we’re unique. Most of the companies that Link Ventures (our parent VC firm) invests in are either homegrown right here in the incubator, or opportunities we’ve discovered through research and analysis.
  • We emphasize revenue growth over funding. We’ve all heard about high-value “unicorn” companies having trouble living up to their promise in the public markets. Cogo Labs’ philosophy is far more revenue focused; we stress business development every bit as much as product development, which is how EverQuote has managed to pass a $100M run rate on a fairly minimal venture investment.
  • The incubator itself is self-funded. To accomplish this, Cogo works with a diverse set of agencies, networks, and direct advertisers to identify custom solutions for their traffic acquisition needs. We use the same expertise that helps us grow our own businesses and apply it to our partners’ goals, and this allows us to fund our own experiments with minimal investment from Link.

With Uplift, the second point went a long way towards informing the early business strategy. Matt’s initial research was in the area of peer-to-peer lending. P2P is a highly attractive model for a number of reasons. It addresses two specific needs by connecting borrowers—who want access to inexpensive unsecured credit—with lenders, who are looking for low-risk/higher-yield investment opportunities. So Matt, with the help of Cogo’s design team, put together a prototype website and began running a little traffic to it, and then went on the road to pitch the idea to outside partners. 

So far, so good: an idea, a prototype, and a set of experiments to ascertain viability.

The only problem was, while it was a good idea, and, we determined, a viable one, it wasn’t really one that aligned well with Cogo’s core strengths. Loan origination is labor-intensive, and not in areas in which we’re particularly strong. We can do traffic analytics and user acquisition better than anybody else, but lender diligence and financial regulatory compliance? Not so much. 

Faced with the rather daunting prospect of needing to hire twenty to thirty financial services experts, Matt realized that the peer-to-peer lending product was going to have to be put on hold while Uplift explored some alternate ways to build revenue. Following in the footsteps of successful Cogo lead generation (Course Advisor, Autotegrity) and online marketplace (EverQuote) companies, Matt and co-founder Jung Yub Lee decided to focus their efforts on creating a personal financial product marketplace.


“What we found when we started to do our testing and early site creation, is that there were ample potential partners who were struggling with acquiring consumers for their loan opportunities and credit card opportunities. Because we excel at providing a link between consumer and vendor, it was easy to translate that to a revenue-focused model.”

With that in mind, products were sourced, contracts were signed, and Cogo’s traffic acquisition engine was brought to bear on the project. Matt proudly sums up the company’s success to date: “Since our launch in May, we’ve crossed a million dollars in revenue. And we’ve done that with a team of four people.”

So is Uplift done with the idea of building a loan-origination product? Absolutely not. Only now, they have the revenue stream in place to pay for it, and they got there by sticking to the time-tested Cogo model: start small, and use revenue, rather than venture investment, to build your main product. 

Uplift Financial is growing fast and hiring.