Frederick Hutson started his company, Pigeonly, in 2012 – pretty much directly after leaving prison, having served a 51-month sentence. Co-founded with Alfonzo Brooks, Hutson's fellow inmate, Pigeonly is now the largest independent provider of communication services for prisoners, with subscribers in almost 90 countries.
Hutson's success was no accident or stroke of luck – he achieved it through his own perseverance and entrepreneurial talent.
Securing funding
The early version of Pigeonly – then Fotopigeon, focusing only on providing a more convenient way of sending photos to inmates – was founded with Hutson's own savings and funds gathered from family and friends. The Fotopigeon site was built by a designer who had been Hutson's fellow inmate, and Hutson hired a freelance engineer to create a national centralized inmate database – the first of its kind.
Costs were mounting up fast and plan to expand the required additional money. Most companies are unwilling to employ ex-cons, regardless of the circumstances of their incarceration. It is therefore tough to imagine investors lining up to lay out money for an ex-con's business – which in itself is prison-related, as well. Luckily, this hadn't discouraged Hutson – where many would give up in the face of the odds piling against them, he persevered. He had to cast the net wide, approaching a total of sixty investors. Six chose to participate in Pigeonly's seed round.
Through his persistence – and the brilliance of his business concept – Hutson managed to get Pigeonly into NewMe, a Silicon Valley-based tech accelerator. Accelerators offer contacts, space, services, and employees to selected startups. NewME, specifically, is geared towards startups founded by underrepresented groups. Soon, in 2015, Pigeonly joined the more prestigious Y Combinator accelerator, leading to gathering $3.2 million in VC funding.
Proof of concept
At least partly responsible for Hutson's success at securing funding was the fact that he went in prepared. Aware that the problem he was trying to address with Pigeonly was unfamiliar to Silicon Valley investors – and therefore difficult to relate to and understand in practical terms – he knew he had to prove the real monetary value of his concept.
To this end, he started by mailing several hundred postcards advertising his services directly to inmates. This 'junk mail' approach rarely works, but Hutson was sure enough of the usefulness of his concept that he went ahead anyway. It was worth it – he gained over 130 customers in one month, seeing a 25% response rate.
Armed with this information and willing to share his own experiences in prison as proof of the viability of Pigeonly, Hutson found it easier to convince investors that his business was worth the risk.
To date, over 8 years of operation, Hutson's company has raised $6.6 million in funding. Through its unique database, gathering searchable contact information for inmates in all facilities in the U.S., Pigeonly has monopolized its niche. The additional funding enabled Hutson to add further services to the company's offer, including cheaper calls to prison using VoIP. Early on, when funding had seemed impossible to secure, Hutson could have easily given up. Thanks to his perseverance, though, his startup idea turned into a thriving business – one that helps disadvantaged groups in the U.S. experience less isolation.
