CEI client companies had the privilege this week to hear from #yesphx legend, successful entrepreneur and investor Pat Sullivan. During the hour long conversation - part of our business incubator’s monthly client-only meeting - Pat shared some of his biggest lessons (usually learned the "hard" way) to help the next generation of Phoenix entrepreneurs. Here is what he taught us.
"Hindsight is NOT 20/20. You don’t know what would have happened if you had done something different…"
What a great nugget! Too often entrepreneurs get lost in the haze of "would have," "could have," and "should have" thoughts, but you can never assume that a different course of action would have improved any given outcome. Simply make the best decisions you can based on all the information you have and don't look back.
"Capital is here [in Arizona]. It will come to good ideas and good management teams…"
There is a common misconception that financial support in the state is as dry as the Phoenix landscape in the summer, but that’s simply not true. Indeed, venture capital is not easily or readily available here by most accounts, but there are plenty of angel groups and early-stage investors pumping money into young startups; and it is growing every day. However, the most important point to note about Pat’s remark is the “good management team” qualifier. Investors truly want to know the characteristics and skill sets that position your team as the qualified unit to grow the business and ultimately provide them with financial return.
He went on to add from his own investor experiences that he seeks entrepreneurs that are "formidable:" "Does this person have what it takes to get through the inevitable ups and downs and pressures of doing a startup?" This just reinforces the "team" perspective of startup investors.
"We wanted to be part of the conversation...some people think Ryver and Slack are the only players in the team communication marketplace…"
It’s always fun hearing seasoned entrepreneurs explain their thought process behind a certain decision. In this case, it was Pat’s decision to directly confront the dominant force in team communication: Slack. As he was piloting his new product, Ryver, adapted from his previous startup Contatta, he knew he had to make a splash in the industry. This meant targeting promoted content and ads toward the Slack community, addressing their volume and feature limitations or "trip wires." For him, he wanted to be as direct as possible in attempting to draw visibility toward Ryver, and it worked! He garnered numerous conversions from Slack users and additional sign-ups to launch his product.
"With regards to Minimum Viable Product, I put the emphasis on VIABLE. It has to solve a problem…"
Pat believes venture capitalists in particular look first and foremost for proof of concept. Is the product or service something that the market and potential customers a) need in order to solve a problem and b) are willing to pay for? He described his previous company, Contatta, and how his team had built an MVP that was much more feature-rich than what his potential customers were asking for - something he tried to correct when developing Ryver. "We were doing the right thing based on the wrong assumptions. You have to constantly challenge your assumptions." Along those lines, as we like to emphasize to our clients: get out of the office and go talk to your customers.
"The CEO’s job is to connect the dots...and make sure you never run out of money...and you have to be able to sell…"
At three separate times throughout the meeting, Pat talked about the role of the CEO within a growing company. Obviously he emphasized the need for that person to be able to understand and manipulate the big picture as well as keep the company financially stable, but the notion of "able to sell" seemed to speak directly to our entrepreneurs. Our clients are led by hardened men and women who have spent years developing products and innovative technologies and who now need to get out there and make sure the marketplace knows about it; or give investors an incentive to buy their way in; or convince an outsider of the career opportunity about joining the team. The bottom line is: you are always selling, and the leader of the organization has to have a predominant skill in that area.
Disclaimer / Shameless Plug: The Center for Entrepreneurial Innovation (CEI) is a proud user of Ryver for our team communication. It has truly helped us streamline our internal correspondences with one another and given way to better overall awareness of team projects, objectives and deliverables. That said, we invited Pat Sullivan to speak to our clients because we think he is one of the most badass entrepreneurs in this state. A BIG THANKS to him for taking time out of his busy schedule to pass along his knowledge and experience.
Want more lessons from well-known entrepreneurs like Mark Zuckerberg and Steve Jobs? Check out our SlideShare presentation, "Terrifyingly True Tales from Famous Entrepreneurs" to hear how they dealt with certain startup situations.