The Exchanges

Q I heard, I read about who you talk to about structuring your company when you first launched it. And there were always these smarter people around you who you're turning to for advice. What about peers, other entrepreneurs who you can have conversations with about how to structure your debt or, or whether to take on, uh, another round? Who do you talk to and how do you do it?

A Well, I found a few groups of, um, three groups to be particularly helpful. I joined EO, which is Entrepreneur's Organization, in 2005, which is a group of entrepreneurs under 40 with more than a million dollars in annual revenue. Very helpful to me. I was in a forum with seven other individuals, all of whom were peers, and I learned a lot from them. Um, I, secondarily, there's an organization, uh, called Young Presidents Organization, YPO, where it's a group of peers under 50, That have more than ten million dollars in annual sales usually. Um, and that is a group I've just recently joined, and has been a, a, I think it will be a good peer group in the future. And then finally, I've been part of a, a network you're probably familiar with of, uh, entrepreneurs called Summit Series, and through that I've met a number of other entrepreneurs, many my own age, that have built companies into the tens of millions of dollars, and have been able to create a network of folks that I can call on for advice anytime.

AI assessment note: “I joined EO, which is Entrepreneur's Organization... secondarily... YPO... and then finally... Summit Series”

Q Um, Sam Carpenter who wrote the book Work the System about how to create these systems said that you should also identify what your company stands for so that everyone else knows where these processes originate and how these processes should work. Did you do that? Did you, did you have a list of things that you stood for at eye contact?

A Well, we had originally a list of 10 company values, and we thought, you know, that we'd check the box on that, but really we had failed, and we had failed because we didn't know what they were. Uh, and they were very vague and abstract, and I even tried to say what they were as the CEO, and I could get to four. And so, in 2009, we went through a process to come up with five company values we call wow me, and they are to wow the customer, operate with urgency, work without mediocrity, make a positive wake, and engage as an owner. Um, and I'll be able to tell you that in 50 years, because it has an acronym that's memorable, that's pronounceable, And everyone in the company knew WowMe and knew what our values were and could relate all the things that we did in the organization back to the core values of the organization.

AI assessment note: “we had originally a list of 10 company values”

Q you about. So, First of all, thanks for doing this interview, ah, especially so soon after getting acquired. I know that's, that usually after getting acquired, you want to take a step back and, and not do media, and I appreciate you coming here and doing this interview. And second, for anyone who doesn't, who didn't see that wristband, can you explain what it was? What was on your wrist?

A Absolutely. Well, I'll, I'll show it to you now, because I still have it right here, and I had two wristbands on, ah, two years ago, and one said, make poverty history, ah, which is a passion of mine to use business and entrepreneurship to create sustainable economic growth in the developing world, and that's something I hope to pursue for the next three or four decades ahead. The other wristband said, one hundred million in 2012, eye contact. Um, and that to me was a personal goal to either get to a hundred million in revenue or, or get acquired for north of a hundred million, uh, this year in 2012. We started the business, uh, in 2003, and you're right, we did everything we could to keep expenses low, sleeping on futons, eating lots of rum and noodles, um, as we built up eye contact over the years to 70,000 customers, a little over forty seven million in annual revenue. Um, and over a million users in email marketing and social media marketing. And so it was a great adventure. Uh, but certainly having two primary life goals, uh, on your wrist, uh, is a very visible way of focusing your efforts on achieving them.

AI assessment note: “one said, make poverty history... The other wristband said, one hundred million in 2012”

Q How do you get those people to give you so much of themselves?

A It's a great question. You know, I, I, um, in, in my case, um, They were either the people that I hired as my, uh, C-level executives, or they were the folks that invested in eye contact, um, either as equity investors and angel investors, um, or as advisors. Um, and so I think it's, I think it's important to find people that are, have already achieved what you want to achieve and bring them into your life. Um, but in order to get the level of a collaboration, you often need to align economic interests in some way by allowing them to invest in your firm or by potentially paying them on a monthly basis for their advice. Um, and what I found is that by having, uh, a CFO who was, you know, in his mid to late forties when we hired him, had already been CFO of a company that exited for five hundred million plus dollars, uh, about 10 years ago, by having him as a mentor, Um, by having, you know, his name is Tim Oakley, our CFO, by having a guy named Buck Goldstein as a mentor, who'd been a venture capitalist, who'd been a public company CEO, um, by having Jit Sinha from JMI Equity and Carter Griffin from Updated Partners. You know, these were the people, along with my senior team, that really gave me the knowledge I needed to execute and build eye contact into a successful company.

AI assessment note: “you often need to align economic interests in some way”

Q You mentioned earlier having difficult decisions that you have to make on your own. Like what? Um, what's the toughest decision that you felt like you had to make and it was just you? Or the toughest decision in general?

A Yeah, I mean, ultimately, um, um, In 2000 and, uh, 10, April, sorry, April of 2000, November of 2010, we decided that we would launch a free version of eye contact, um, in response to some of the competition in the marketplace, having done that successfully, and, um, ultimately that was my decision. I went to the board, I advocated for what I believed in, I made the decision. Um, and when you have When, when, when a company gets large, it becomes more like a, a cruise ship than a speedboat. Um, and so changing the direction of cruise ship versus changing the direction of speedboat takes a hundred times longer. Um, it's very different for an entrepreneur who has a tendency to have a bias toward action and to act quickly, uh, to try and move an organization with 300 employees versus an organization with three or 30 employees. Um, and so I learned a heck of a lot in how to lead, lead a number of people in organizational groups through a strategic shift. Um, but, I mean, there are decisions like that. There's decisions to raise the forty million dollars from JMI Equity, which ultimately became my decision. Um, decisions to, you know, propose to the board that we go forward with the sale of the company. Um, you know, so these are decisions that ultimately you're, you're, you, you make, um, you know, staring out your window in your office, and it's, it's you making the final call.

AI assessment note: “we decided that we would launch a free version of eye contact”

Q Well, you did it. I have the quotes here from our first interview of what you were going to do, and here you did it. What's next? What's the next big goal? What's the next big wristband?

A Well, I am passionate about creating jobs in the developing world. I'm passionate about being part of, uh, ending extreme poverty in our lifetime. Um, I've been passionate about that for probably the last decade. Um, I still wear that white, uh, wristband that says make poverty history from 2005 from the one campaign and worn it now for About five or six years. Um, and to me, um, I went to Africa in 2008, to Kenya and Uganda for the first time. Since then, I've started investing as an angel investor in companies and in Kampala. What I plan to do with the next, uh, 25 years at least, um, is to become a great venture capitalist and a great private equity investor in companies and countries like Nigeria, Ghana, Kenya, Uganda, Rwanda, Tanzania, Ethiopia, Zambia, South Africa. Uh, and really sub-Saharan and middle Africa. Um, and I think through investing and providing capital to growing businesses, you can often make a huge positive impact and create long-term sustainable economic growth. So that's my passion, and I hope to see a world created in which every human being has access to basic human needs of food, water, and shelter. And I think we'll get there in the next 20 or 30 years.

AI assessment note: “What I plan to do with the next, uh, 25 years at least”

Q coming up with the right questions here. I'm really excited to be doing this interview, and it's showing in my voice. I should be so much more professional and so much more composed than I am right now. But can you give me an example of what's on the list? What kind of things would you have on the list beyond building a hundred million dollar company by 20 12?

A Sure. So it might be travel countries that I want to visit that year. Um, it be, um, personal traits and values that I want to, uh, sort of build into my character over time and work on improving. Um, it might be, uh, experiences. Uh, for example, last year, one of my goals was to go skydiving for the first time and check that off the list. Um, and oftentimes, uh, it sometimes might be educational. Um, and oftentimes many are within the realm of, of business, uh, and entrepreneurship, and, um, in terms of the process of setting the goals, you have those categories, you know, family, personal, experiential, educational, uh, and professional and business, and then you put in a couple goals for each, um, and, and it really doesn't take that long. It really takes maybe a couple hours to do at most, um, every, every year. Um, and then you, I have a personal wiki Which is a password protected sort of like Wikipedia just for me. Um, and I keep my, you know, goals going all the way back to 2002, uh, when I was 18 to the present by year, and then every couple, two times a week I go in and sort of do a journal update to sort of see how I'm progressing each week and whatever I'm learning. So that's the process I go through in the categories I have for the goals.

AI assessment note: “for example, last year, one of my goals was to go skydiving”

Q How did your life change after you got, after you took some money off the table?

A Well, um, you know, I think there's a sense of, for me, the purpose of money is only that it enables me to do good things. It enables me to invest in other companies. It enables me to invest in companies in Africa, which is a passion of mine. Um, I don't really have, I'm not a material person. I don't care much for material goods. Um, I think the value as an entrepreneur of having a million dollars in your bank account, for example, is that it does allow you to think longer term. And to think bigger. And so I do encourage other entrepreneurs if they have the opportunity to take some chips off the table when they raise their second or third or fourth round of funding to do it, because it does allow you to de-risk a little bit, um, and, and focus on the longer term value creation.

AI assessment note: “It enables me to invest in other companies... allow you to think longer term.”

Q What do you mean? Do you have an example of a risk that you were able to take because it, you wouldn't be, you, because you took some risk off the table?

A Absolutely. Um, so in 2007, uh, iContact raised about 5.35 million dollars from Updata partners, and my co-founder and I were able to take some chips off the table, and we built the company up over the number of years, and then in 2010, we raised forty million. We would have never gone out. When, when you, when you raise forty million dollars of capital, um, the risk profile goes up. You might say, oh, well, you have more money in your balance sheet. That means that the risk is lower. The reality is, is that You have now taken forty million dollars of capital that is senior in the capital structure to all the common shareholders, um, only below debt. Um, and so. You said, uh, the connection went down only below the debt. You get, right. Uh, you, you end up getting nothing.

AI assessment note: “iContact raised about 5.35 million dollars... able to take some chips off the table”

Q that you do it to make sure that you're getting the most out of them instead of doing what most people do, which seems to be, um, just give the investors as little or as much as you have to, and then back, get them to back away so that you can focus on your work. What do you do to make sure that you're learning from them and growing?

A Well, I think the key is, is all is in the selection of the people and then ensuring that there's an ongoing process for you to spend a lot of time with them, to learn from them. Um, there are different types of investors. There are investors who don't really know all that much about operating a company, operations of a company. Um, and, and then they're, and they're not that value add and you really just sort of want their money and then not to talk with them again. And then there are investors like the ones we were fortunate enough to attract that, Not only provided, you know, 500,005, which you raised a total of fifty three million dollars over the last five years at eye contact, uh, not only provided money, but actually provided, you know, strategic advice, and every six weeks we would have a board meeting, um, or a board call, and I would get interaction on a formal basis, and then I set up a monthly call with our, uh, major investors from JMI Equity to make sure I was getting the feedback and the mentorship and guidance that I wanted, To ensure that I got, and then on the CFO standpoint, his office was next to mine, and so we would see each other every day, and then some, a tactical thing that we did with our senior leadership team, because sometimes teams get, ah, they're, they're bad at communicating. We had a daily, 9:46 a.m. huddle, where we got together for 10 minute…

AI assessment note: “I set up a monthly call with our, uh, major investors from JMI Equity”

Q of, uh, WP Engine said that I need to ask entrepreneurs more about the, the, the, the insecurities that go with being an entrepreneur. Specifically, he said, um, ask about the imposter syndrome, this feeling that everyone's counting on you to be great, and you have to project this sense of confidence, but at the same time, you have insecurities like anyone else. Do you remember when you felt that?

A Yeah, you know, I think, um, I'm a very self-confident person, and, um, I think that, that probably comes from my mom who, who taught me from a young age that I could achieve anything I set my mind to as long as I, uh, as long as it was something that would do, make a positive impact in the world, and, um, that I surround myself with amazing people, and so, you know, I think at times, um, you can lose confidence, but at the end of the day, um, you often know your business better than anyone else, Um, and the best thing you can do is to make decisions confidently and surround yourself with great people. So, you know, I think I was fortunate to, to not be affected by that syndrome, imposter syndrome as much as others, but you, you really do have to play a mental game with yourself to continually be confident in the face of challenging situations.

AI assessment note: “fortunate to, to not be affected by that syndrome, imposter syndrome as much as others”

Q pot. People didn't care about the business. He didn't care about Coming into work because the culture just was, was not corrupt, but it was, it wasn't exciting. It was, there was, there was a problem with the culture. Did you have to wait till there was a problem in order to jump on this and say, yeah, we should define our values, we should explain what we stand for?

A Well, Tony, Tony Hsieh is, um, you know, I've met him a number of times in person, and through his book, he's sort of been a, uh, someone I look up to in the world of creating a great, amazing, inspiring, creative culture for a company, and I think at the end of the day, once you get beyond 10 or 15 employees, your success is entirely dependent on the Set out some of your employee base and their inspiration to come into work and be motivated every day to value and achieve. And you just can't create a great company if you have hundreds of people walking around that are not inspired to give it their all every single day. Um, and so we passionately cared about the purpose of our business. We passionately cared about the employees and our whole team. We passionately cared about our community. And we passionately cared about our customer base that we served every day. And through that passion and that emotion, The emotional side of the balance sheet instead of the financial side of the balance sheet. We were able to create substantial assets that often could not be seen in, in, you know, a simple, uh, pro forma profit and loss statement. And so I believe that you should invest once you get beyond a handful of people, um, in creating an amazing culture at your workplace.

AI assessment note: “I believe that you should invest once you get beyond a handful of people”

Q seed fund, but a company that was generating solid revenue, a company that was going somewhere, a company that kept building up customers. You weren't like, like a lot of the people who we read about on TechCrunch. You weren't like a lot of people who you might've gone to school with. Where did you find those people who made you feel like this is okay to think this way?

A Well, building a company is a lonely journey at times, um, and you have to have a lot of self-confidence in yourself, and you certainly have to have the perseverance to get through tough times. Um, you know, at the end of the day, while, you know, there weren't that many folks who were in their twenties building companies at the scale that eye contact has reached. Um, there are many, many people out there, um, that are, are often 40 or 45 or 50, and if you're able to get into those networks and, and really surround yourself with people 10 to 15 years your senior, if you're a younger entrepreneur, you can often get a network of peers and mentors that have been there and done that. So, you know, there are thousands and thousands of public company CEOs in, in the United States alone, and, Probably tens of thousands that have done it over the years, and so they are out there in every community. It's just up to you to find them and to bring them into your peer group.

AI assessment note: “surround yourself with people 10 to 15 years your senior”

Q books? You're someone who just loves to learn. I look past, uh, I, I read our The transcript of our past conversation, and you kept referring to books and how they change your life, right, from an early age. How do you read books different, do you think, than the average person might be reading, might be reading books, who's not getting as much out of them as you are?

A I think, um, the successful entrepreneur is often a voracious reader. The successful person is often a voracious reader. Um, and for me, it was the formative years of my life where my, my teenage years where I really was exposed to through my parents, some really important books. And I remember mentioning to you Think and Grow Rich, Rich Dad Poor Dad, How to Win Friends and Influence People. Um, and then there's, you know, some others that really inspired me. Um, but those were the three that really opened my mind to personal development and personal finance, which ended up being critical to my later growth and success. Um, I read, I don't read, you know, that much more. Maybe I read two books a month. It's not that much. Um, but you know, I don't watch TV. Um, I might watch a total of a half an hour of TV per month. I don't even have, I don't have cable. I don't have an antenna. So if I want to watch TV, I have to go out to watch TV. And I think that is an important characteristic I find in other similarly, uh, ambitious people that they focus their time, uh, and their efforts on doing the things they love and what they're passionate about and, and not being sort of sedative in one place, watching information come to them.

AI assessment note: “I don't read, you know, that much more. Maybe I read two books a month.”