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Explore your curiosity - Interesting people with fascinating stories.
Life consists of three things:
-The stories we tell others
-The stories others tell us
-The stories we tell ourselves.
Mike, welcome aboard to the show. Thank you so much for joining us today.
Speaker 2:I'm happy to be here. Thanks for having me on the show.
Speaker 1:Mike, you know, I I am so impressed by you. I don't think I you're definitely in the top, like, 10 people that would showcase the concept of curiosity. And I think our audience is gonna see this. I don't know. I'm excited about that.
Speaker 1:But because I'm impressed by you, I'm gonna give you a hard first question. Okay. What was the worst, absolutely worst moment in your entrepreneurial journey that you kind of still feel the goosebumps till today?
Speaker 2:Yeah, mean it transformational for me. I was a really good software developer, And then all of a sudden I was running a company and we had hired people and we, we weren't funded. So we were self funding through revenue. Then it was going great. And then we hit a wall and there was a day where like, couldn't make payroll and like, my co founder and I sat down, divided up the list of people and just went and laid everyone off.
Speaker 2:Like we each laid off half of the company. And that was so brutal. Right. Like it sucked personally because I felt terrible. Like they hadn't done anything wrong.
Speaker 2:And then it obviously sucked for the business, right? Like it was terrible for the business. And it actually forced me to recreate myself as someone who knew the financials and how to manage the business, which turned into like an entire company I started called Rocket Pro Form a, which was all about helping founders with their financial projections.
Speaker 1:So at that moment where you need to fire half the team, what's going through your head?
Speaker 2:Other than this is terrible? I I think there are a couple things. One is like, this is terrible. Two was I was trying to decide whether to stay with the business or let it die. My co founder left.
Speaker 2:So I felt I felt very alone and I felt very overwhelmed and I felt very in debt. Right. Cause no co founder, no employees. Actually, I kept one guy remote. So I had one guy remote who I would talk to, but we did have clients.
Speaker 2:We had good tech. We had customers. They just weren't paying and we couldn't sign new people. So I ended up borrowing. I ended up going further in debt.
Speaker 2:I borrowed some, some family money from a relative who I paid back, but then I did start to feel hopeful because like there was still a lot of good there. And I did rebuild the thing and it eventually we turned it into, I brought in a new co founder after a couple of years and we went and raised venture capital and turned it into a funded company, and we had an exit. So, it got good again, but it was bad and it felt terrible. I just felt alone and overwhelmed and in debt.
Speaker 1:How did you find that vision of a path forward? Was there somebody took you over that hump, that psychological barrier, or did you do it all on lonesome? And if it was alone, how the hell did you do that?
Speaker 2:I don't know. I mean, part of it is I'm really stubborn. Like if you ask my parents, they will both tell you I'm really stubborn. And actually my wife is stubborn and we have kids who have like inherited double stubborn from both of us. Brilliant.
Speaker 2:I think part of it was just being stubborn. Part of it was not knowing what else to do. Right. And part of it was like, I knew it could work. I just hadn't figured out how.
Speaker 2:Right. Cause we had fortune 500 customers. We had been paying all our own bills. Right? I had built a lot of the tech, so I felt good about the tech.
Speaker 2:Right? Rightly or wrongly, I felt good about the tech. But, like, I knew there was something there. It was just going to suck to get from here to there. I also, and this is kind of a startup y thing.
Speaker 2:I didn't know how to go get a job. Like, cause I was good at a lot of different things, but I wasn't great at one thing, if that makes sense.
Speaker 1:And you're, you've gone through this terrible experience and you're now self reflecting, which I gotta say is an amazing thing, not everybody does that. The jerk y thing to do is just blame everybody else. So that in itself is pretty damn awesome. And you're trying to analyze the situation. What are your conclusions and what are your decisions moving?
Speaker 2:My conclusion was I had been trying to build my way to success. Like the reason I started this company was I was good at building software. Right? And that turned into getting hired by the Discovery Channel to build a presentation tool that blew PowerPoint out of the water. Right?
Speaker 2:It looked like television, but was editable like PowerPoint. PS, this was in 1996, like pre cloud. Right? This was when
Speaker 1:we were still on Skype, which is somebody something that
Speaker 2:doesn't accept We were sending presentations over CD ROM. We were FedExing CD ROMs to people for them to update their presentations, right? But it looked really cool. I had been trying to build my way to success. If I just build this product better and better and better, we're gonna win.
Speaker 2:What happened was I was faced with, That's not enough. Why
Speaker 1:was that? What wall did you run into? What was the kind of epiphany that just building great products wasn't enough?
Speaker 2:I mean, was laying people off. I'm like, this is not working, right? Like if I'm laying out, if my co founder's leaving and we're laying off the entire team, I this is not
Speaker 1:mean, clearly it wasn't working, what was underneath that?
Speaker 2:So what was underneath that was we weren't running the business well. And I was like, okay, if I'm looking at the puzzle and I know the tech is good and I know the customers are good and I know the employees were good, what's left? All that's left is the management. Right? So I needed to fix the management.
Speaker 2:So then it became, I'm going to stick with this. I'm going to rebuild it. I'm going to keep the customers happy. And it was literally like me. I was the sales guy.
Speaker 2:I was the training guy. I was the tech support guy. I did have a remote software guy, I did hire some more people eventually. But for a long time, was me. And I just remember, like, there was one day where we landed HBO as a sorry.
Speaker 2:When I landed HBO as a customer. And I remember just sitting up at my desk and going, yeah. And there was no one there. It was just me. Right?
Speaker 2:And eventually, brought it all back. But I was like, if I'm gonna do this, rebuild this whole thing, I need to be confident in my own management skills and my financial skills. Right? And the the real skill is like planning ahead. Right?
Speaker 2:So if I'm looking at QuickBooks or I'm looking at my bank account, I'm looking into the past. I need to be able to plan ahead so that I didn't end up out of money and firing everyone again. Right? So the unlock for me was I can't build my way to success. I have to manage my way to success.
Speaker 2:And then I have to evolve into someone who can manage a business.
Speaker 1:So let's take a little bit of a deep dive here, Joe, go down the rabbit hole. We think about seeing into the future, right? The crystal ball. There's the things that are easy, right? That's the expenses, the costs.
Speaker 1:You kind of know what you're going to spend money on, you know, to a certain degree.
Speaker 2:So we're going put that aside.
Speaker 1:The very difficult thing is to predict revenue.
Speaker 2:How do
Speaker 1:you go about predicting what's going to come into the company and if you're going to have enough coming in so you can actually pay what needs to go out?
Speaker 2:Right. The short answer is I've spent a lot of time on this. I actually started this company called Rocket Proforma. The seeds of it were planted. I ran a couple accelerators in the late 2010s and I had already built a tool.
Speaker 2:But when COVID hit, I looked at it and I was like, everyone is now stuck at home. They can't go to work. So many people either need to start businesses or pivot businesses. The way I can help people the most is by giving them a financial projections tool that they can very quickly map out the future in exactly this way. Right?
Speaker 2:So I I focused on that and created a bunch of different ways to try to project the revenue. Like, the revenue is the hard part. Right? The expenses are the easy part. And one of I'm just gonna talk about unlocks.
Speaker 2:One of the unlocks for me in that process was realizing both from a financial projection perspective and just a company building perspective, everything starts with sales. And this is a place where the bank account and QuickBooks fall down because they start with a dollar sign and the dollar sign is actually coming from sales volume. What I did in my financial tool and in all of my dashboards is I start with sales. So, that's the top line is like, are we selling this month? What are we selling next month?
Speaker 2:What are we selling next year? And in my tool, everything else effectively becomes a trailing indicator of the sales volume. And if I mess with the sales volume, all of the other costs and expenses, a lot of them will just adjust themselves based on the sales volume. Right? So then it becomes a elastic and a fun thing where I'm like, well, what does world domination look like?
Speaker 2:What does it look like if we're out of money? What does it look like if we're not making any sales? What if it looks normal? Right? So I can very quickly start to scenario build in a really cool way.
Speaker 2:And then I think also we live in the age of for most businesses, we age in the age of inexpensive tests. Right? So when we and this was true even we raised money for SlideRocket in 2,009, and we had a 20,000 person waiting list, and that helped us raise venture capital. Right? So at the very least, right, we can do that.
Speaker 1:I'll be remiss if I don't ask. How did you get to that waiting list? What was the process?
Speaker 2:We did a lot of
Speaker 1:The users That's pretty amazing in itself. Right?
Speaker 2:Was it
Speaker 1:purely marketing or what was the process?
Speaker 2:It was purely marketing. Oh, wow. We did a lot of like blog posting and teasing and, and we were hitting the right pressure point. Right. I will also say that, a couple of things went right with slide rocket.
Speaker 2:I had been building custom presentation software for ten years by the time we started doing that. So I knew what people wanted. And the co founder I brought in was just crazy good at develop both building software and user interface. So pretty quickly, had something that could do all kinds of cool stuff, but was easy to use. And it was interesting for me because I made the shift from being the technical co founder of a non funded company to the non technical co founder of a funded company.
Speaker 2:Right? But when we were at pitching, we were using my financial projections. And when we raised the money, we were using, you know, the budget that was 90% made. So it's like I could see that I had made the transformation.
Speaker 1:This is, this is brilliant. I don't think I've ever heard a story quite like this. You kind of hear people, even in the entrepreneurial community, right? You're the techie, you're the techie for life. The finance, you're the finance for life.
Speaker 1:Just love the curiosity and learning and change. It's, absolutely beautiful.
Speaker 2:I love learning. Appreciate it.
Speaker 1:Let me ask you this difficult question. Going back to, you know, an 18, 19, 20 year old trying to decide I'm going to corporate, I'm going to entrepreneurship. Is there a clear answer or, and I'm assuming the answer is no. So how do you decide like what's the path to you? You know, if I'm this, that or another, don't be an entrepreneur.
Speaker 1:What's your insights? And what we should also reveal is that nowadays you're investing and you're meeting these founders on a day to day basis, and some of them are quite young.
Speaker 2:Yes. Which also feeds into the curiosity thing. I love learning. I am always curious. So for me, having a role where I just get to go meet people and ask them, Show me the cool stuff you're working on is so much fun.
Speaker 2:What's the best way to say this? I wanted to be an architect, not a software architect, but a
Speaker 1:In bricks and mortar
Speaker 2:retrospect, what I really liked about it was there was an engineering piece and there was an art piece about how do we make it look good and how do we make it usable by humans so that humans feel comfortable and understand how to move through the space. Right? So I liked that piece of it. What I didn't like about architecture was that it was very slow. You know, it took years for me to see my first actual thing in real life.
Speaker 2:Right? And you, you needed to get licensed. Right? So there was a whole other piece of school I was going to have to do. And then there was no money in it.
Speaker 2:Right? So there was a day I had been working for this architect for like a year. And I went in and I think I was making like $10 an hour and I wanted to raise to $12 an hour. And I'm whatever, 22. And he's like, Well, for the extra $2 an hour, I can get a licensed architect who's been practicing for ten years.
Speaker 2:And I'm like doing the math in my head and I'm like, I quit. That is not a good ROI. And I think also I just didn't love it enough. And I had gotten back into software development. I grew up with a dad who was very into computers, and this was in the seventies and eighties.
Speaker 2:So when I was young, he used to take me to he, was in graduate school and he would take me into like the mainframe with the punch cards. Right? So we always had computers growing up. I had learned to program computers, and I kind of put it down. But right about that time, I had gotten back into programming, and I was magically good at it, I guess because I had a background in it.
Speaker 2:And I could just create things pretty quickly, And it had those pieces from architecture that I liked. Right? It was engineering plus design and usability, but I could do it right then. And people were paying me good money. Right?
Speaker 2:So it became very quickly. I was just off and running and then it wasn't. And then I did get a job. I got two jobs. So one job was building an instructional like an educational CD ROM based on real earthquake data for students.
Speaker 2:And then the second job, like, was at this fast paced New York City multimedia custom development shop, except they were terribly run and they went out of business. Like, they basically paid me to sit in a room and they didn't have anything for me to do. And then they went out of business, like, three months later. And so I just, I had already started doing some consulting projects and I like, I'll just consult for a while and see what happened. And then pretty quickly I had, like, I'd hired two people and then the discovery channel hired me to build this thing that turned into a product.
Speaker 2:And I was like, I was just off and running and I loved it.
Speaker 1:Amazing.
Speaker 2:So I don't know that it was conscious. Like, I wasn't planning. I was like going after the things I loved, but then kind of I was along for the ride in a weird way.
Speaker 1:You know what? I I think a common bias, psychological bias is for us to, in retrospect, say that it was all master planned. I love the humility in like, yeah, I was just on this ride, and thank God it turned out well. So, I appreciate
Speaker 2:it. My wife, I have married a master planner. I am not a master planner. I see her and I now know what a master planner looks like and that is not me.
Speaker 1:You know what, I am the master planner and I was always critical of the people that didn't have a plan, and then at a certain level of maturity I was like, like he has no plan and yet it's kind of working out, so there must be another way to look at the world, so it's okay, there's other perspectives there, so I do appreciate that nowadays.
Speaker 2:I'm good with strategy, I'm not good with like knowing exactly where we're headed.
Speaker 1:Fair enough. And you know, in fairness, you know, no plans are ever right. It's really the act of planning that is valuable. It's not the plan itself. So, nowadays you're investing, you're working with entrepreneurs.
Speaker 1:Let me ask you a simple question. What's the biggest red flag when you meet a new entrepreneur and you're like, Nope, this is not going to work.
Speaker 2:I think the two biggest red flags. One is if it's just an idea, we can't really invest. I I don't know. Anything I say, there are certainly caveats too. But in general, if it's just an idea, it's probably too early for us.
Speaker 2:Like, we like to see some data that it's working. So that's one thing. I think the second thing is, and this is my bias. You've just heard me tell this whole story. If it's all product people, I get nervous that no one's going to know how to get a customer in there.
Speaker 2:The extension of that is I had a friend call me up and be like, hey, do you know anyone hiring for tech jobs? And I was like, Sure, but didn't you just raise like 2,000,000 for your startup last year? And he said, Yes, we spent it all building the product. And then we went to raise money to find customers and we couldn't raise the money. So to him, was like the investor's fault, right?
Speaker 2:Or the economy's fault or something. To me, it's like you built this for no one, right? Like it's $2,000,000 that have been spent building a product that no one wants to use. Right. And unfortunately, I see that over and over again.
Speaker 2:Right. So I get nervous. I just get nervous when there are any customers just because no one can predict well how people are going to behave. So I'm much I'm I feel much more comfortable if people are in the system and we can at least see how they're behaving. And there's some proof that A, they're willing to change their behavior, which is really hard.
Speaker 2:And then B, they're willing to keep changing their behavior. And then we can get to monetization after that.
Speaker 1:So, I mean, that's a brilliant comment about the structure of the team. Is there anything about the individual entrepreneurs that just turns you off? And on the other side, what gets you excited about the entrepreneurs themselves?
Speaker 2:I mean, I like, I certainly like people who are building cool stuff and are very passionate about it. Right? I get excited again. I get excited when there's a complete package, right? When there's tech and sales and marketing that could be in one person that could be in, you know, two or three people.
Speaker 2:Right? So, yeah, don't know if there are turn offs for there's not really like a turn off for me for people. Like, I I love giving people the benefit of the doubt. And I think a lot of the time when I'm being pitched, I'm just assuming that the people can build good tech. Right?
Speaker 2:We'll do some tech diligence and we'll make sure, but let's just assume that you're awesome at building tech. Show me the business. Right? Like, that's the piece where a lot of things fall down. Like one of my favorite pitches I've received in the past month was a guy who sat down and started talking about how they got 40,000 people to prepay for the first month of service for a product he hadn't released yet.
Speaker 2:Right? Like, that gets me excited.
Speaker 1:My dad, when he I was young, we were helping him run his business. I was about seven years old and he shows me this website which has like we built it for him and it had 40 books on it. And he's like, I already shown my brothers like how many of these books have I written? And he's and I'm like, well, obviously you've written all of them because you made us put them on your website.
Speaker 2:Uh-huh.
Speaker 1:And and and this changed my life forever. It was like, haven't written any one of them. When somebody buys a book, I will write that book. And I was just in shock that changed my way of thinking forever. So I appreciate your comment.
Speaker 2:Sorry, say it again. It changed your thinking because
Speaker 1:So this idea that you have to have the product in order to sell it, that's a very basic thing. Like, that's kind of like, okay, like you're selling something you have, right?
Speaker 2:Right.
Speaker 1:But obviously no, like there's another way. You know, was right there in his contracts. Oh, there's a lead time of three months. And he knew he could write a book in three months and he knew that he would limit the amount of orders that he would take in, so he knew that he could basically write according to create according to demand and that that kind of philosophy of thinking about market demand as opposed to what you fell in love with was fundamental for me. So your points resonate very, very strongly You with know, we think about Tesla and how he had these pre, you know, down payments on, I can't remember how many hundreds of thousands of Teslas.
Speaker 1:It's that kind of thing, it's brilliant. Okay.
Speaker 2:Yeah, think Sam Aldman just canceled his Roadster order after waiting seven years.
Speaker 1:Hey, fair enough, fair enough. Mike, what an absolute delight. We are running close to the end of the show, so I want to wrap it up with our last question. It's a difficult question. It's difficult because it's personal.
Speaker 1:If you had to go back to the most difficult moments in your life, being an entrepreneur isn't always roses, sometimes it's actually the interaction with family how we manage our relationships. What would be the piece of advice that you would go back and give yourself?
Speaker 2:That's a good question. I think the biggest piece of advice I would give myself is really figure out the co founder thing. Like really take time figuring out who to start companies with. Right? Some of the people I picked were awesome.
Speaker 2:Some of the people I picked were terrible. Some of the people I picked were awesome for a while and then it fell apart. Right? But like, I think I don't want to start. I wouldn't want to start another company by myself, but that co founder pick is, you know, it's transformational if you do it right.
Speaker 2:It's also transformational if you do it wrong. So like, that's the piece I would really focus on.
Speaker 1:Is there any specific unlock that you can kind of point to, like, make sure you don't make this mistake when picking your co founder?
Speaker 2:So I think a couple of things. I think one, I'm a big fan of trial periods. It's hard to know what it's like to work with someone until you've worked with them. So actually, Palantir, I was just reading today, they do this intern program where they tell kids not to go to college and come do this intern for a summer. And at the end, the good ones, they just offer a job right there and then, and you just skip college and go work for Palantir.
Speaker 2:Right? But they spend the summer working with all of them to see which ones they want to give the job to. Right? So I certainly think picking, spending some time getting to know what it's like to work with someone is really important. That's why vesting schedules are great at startups, right?
Speaker 2:If someone has to leave, they don't take all the stock with them. I think another thing, and this is harder to test for, people behave strangely when there's lots of money and when there's no money. And that is hard to test for because a lot of the time there's some money and like everyone behaves normally. And then there is these moments where people just completely flip into someone else. And I, I have not developed a good test for will this person go crazy if we make a bunch of money or if we run out of money, but that's another challenge with the co founder.
Speaker 1:Mike, what an absolute pleasure. Thank you so much for joining the show today. This has been wonderful.
Speaker 2:This has been great. Thank you.