Wed, 1 April 2020
296: How Invitation Homes CEO Dallas Tanner Scaled a Multibillion-Dollar Home Rental Company at Breakneck Speed
CEO Dallas Tanner on the breakneck creation and growth of multibillion-dollar home rental company Invitation Homes.
Like a lot of successful businesses, Invitation Homes was a seemingly overnight hit that had been in the making for many years.
“We bought the first 30,000 homes in the first 18 months,” says CEO Dallas Tanner, of the single-family home rental company.
Based on that burst of early success, it might seem as though Tanner did the impossible—come up with a brilliant idea, instantly get buy-in from an investor, and reap immediate rewards.
But long before Invitation Homes launched in 2012, Tanner had already cut his teeth in the home rental business. During college, he bought a couple of houses with his dad and managed them while going to class. He later founded the Treehouse Group Companies, which focused on workforce housing in the Southwest.
So, when Tanner set out to start Invitation Homes, he did so with a large body of experience, knowledge, and accomplishments in his chosen field. That could have had something to do with the quick traction he got at Blackstone, his early capital partner and provider of funds for those 30,000 homes.
“High speed, low drag,” Tanner says of their initial goal. There was an intense focus on getting out there, scaling up, and achieving meaningful gain in as short a time as possible. Were they worried, though, that the swift pace might blind them to any turbulence ahead?
“If you’re building an airplane while flying it, there’s always a risk that you may miss a step. We were lucky to have no major issues and that’s because we were comfortable in the area we were building. We knew it and understood it.”
That early work and knowledge of the industry paid off. In 2017, Invitation Homes went public with an initial share price of $20. Two years later, it hovers between $29-30 per share, a 48% increase. Blackstone sold its remaining shares (11%) of the company in November 2019 for $1.7 billion, bringing Blackstone’s total profit from IH to $7 billion.
Systemize to Scale
Tanner attributes much of the company’s success to its fast, effective scaling. “Economies of scale give us a really strategic advantage in terms of the services we can provide residents, and establishing predictability of the experience.”
Cases in point: Each of the 80,000 homes in the company’s portfolio is visited by one of its 300 technicians every six months, whether there’s a known issue in the home or not. Customer care is offered 24 hours a day. Day-to-day management and communication are provided by local teams of 10-15 people or, as they’re called at Invitation Homes, “pods.” Each pod has 3-5 maintenance technicians to service its portfolio of properties.
And the system seems to work. On average, Invitation Homes residents stay for about three years. More than 80% of them take advantage of another system innovation—online auto-pay.
Tanner is constantly reviewing data, though, to ensure they’re being as efficient as possible.
“As we think about our business, we’ve gotten more and more efficient here in year seven,” he says. “We’re focused on the kinds of things that deliver a really good customer experience but make us as optimized as possible.”
For example, the inaugural days of the business found technicians switching out locks each time a home got a new resident. New tech eventually provided the option of electronic entry, which Invitation incorporated into its homes. Now, when a resident moves out and a new one moves in, only the code needs to be changed. This made the move-in experience that much smoother for new residents and saved time for the team.
Knowing What to Hold Onto
Crunching data is also how Tanner reviews the performance of each property and whether it’s time to sell. Their typical home is a three bedroom, two bath with 1,800 square feet, which will rent out for about $1,800/month, depending on the market.
Invitation Homes sometimes sells off certain properties that either aren’t performing or have experienced such increases in value that a sale presents a better gain for the company.
“Just like any good asset manager,” Tanner says,” you look at the data and make these decisions in real time.”
And, true to form, he’s even created a system that kicks in when the decision is to sell. The “Resident First Look Program” allows the home’s current resident to consider purchasing before the home goes on the open market.
Dallas Tanner’s Advice for System Creation
Tanner is firm in his belief that fine-tuned systems allow for the best customer experience and most efficient performance within the company. So what’s his advice for others who are looking to create systems that allow for scale?
That last point is crucial. “If you’re not capturing data from an early stage, then you’re kind of playing with one arm behind your back,” Tanner says. That early information provides keen insight and helps you make sound decisions about best practices in years two and three.
Remember, though, that the quest for good systems shouldn’t overwhelm everything. “You’ve got to spend your time being as efficient as possible, but driving growth at the same time,” Tanner says. “It’s always a balancing act.”
For Invitation Homes, the priority is to find long-term residents and put them into homes in markets and submarkets that are the most appealing and as efficient to manage as possible. This priority steers decisions and interpretation of data at the company. It defines how the company and its people best use their time.
Finally, Tanner offered two key activities that he believes lead to success for startup entrepreneurs:
He acknowledges that it also takes some luck and good timing. “But, the only way those things go your way is if you’re head down and going hard.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Rebeca Seitz
Wed, 25 March 2020
Believe it or not, there are many parallels between the world of boxing and the world of entrepreneurship. Tim West is familiar with both.
As the founder of the fastest-growing global boxing franchise, 12RND Fitness, West has had his feet squarely planted in both realms for many years.
He started his journey working in brick-and-mortar fitness centers before jumping into tech entrepreneurship, and eventually launched 12RND Fitness in 2014, which quickly exploded across Australia and is now expanding globally. In fact, West is in the process of opening up their first locations in New Zealand, Singapore, London, and Los Angeles this year.
In this interview, West dives deep into his thoughts on the franchising model, his biggest lessons from working in tech, and his approach to overcoming obstacles. Check out the full conversation below!
Sun, 22 March 2020
As a founder, you’re likely feeling a lot of stress and anxiety around the current situation with COVID-19. While we hope your business isn’t being too heavily impacted, we want to let you know that we’re always here for you and want to help in any way we can.
We’ve been mulling over how we could be the most useful to the Foundr community and decided it would be incredibly valuable to sit down and talk to Steve McLeod. McLeod is uniquely equipped to share advice about the current circumstances for many reasons: he’s a business coach that has guided thousands of organizations through challenging situations (including Foundr); he founded his own company called Fire And Safety, which is now a $20 million business; and he’s a former firefighter who dealt with many disasters during his eight-year tenure.
In this interview, we touch on many topics—from managing cash flow reserves to communicating with customers to adjusting your mindset—that we hope you’ll find helpful as we navigate this unfamiliar territory together. Whether you’re getting ready to launch a new business or are already running a seven-figure company, the contents of this interview should be applicable for entrepreneurs at every stage.
If there’s any other type content you’d like to see that would be valuable to you during this time, please don’t hesitate to reach out at email@example.com to let us know.
Thu, 19 March 2020
Jim McKelvey needs to solve problems. “It’s not about money. It’s not about recognition. It’s not about anything you can measure. It’s just this burning need to fix something.”
That burning need is what sparked the ideas for all of his startups, including the massive small business payments company Square, and now his current project, Invisibly.
“I look for a problem that I care about,” McKelvey says. “I look for something that bothers me, something that angers me, something I will get up and bend my life into a pretzel to solve.”
In fact, the problem that became the catalyst for Square—which, by the way, has grown to a $34 billion market cap—evolved from McKelvey’s first profession as a humble glassblower.
That same unstoppable drive is something he’s seen in so many successful startups around the world, and it’s now the subject of his new book, The Innovation Stack. Someone sees a problem and, without experience or previous knowledge, they set out to solve it. For McKelvey, this is what true innovation is all about.
Mira Publishing: Turning Failure Into Opportunity
McKelvey’s first company, Mira Digital Publishing, solved two problems, actually. First, McKelvey wanted to create image storage and recognition software, something that was still in its infancy when he founded the company in 1990.
Second, he needed a way to break out of his own rut. He had graduated from Washington University in St. Louis in 1987 with degrees in computer science and economics. At 19, he’d published a textbook called The Debugger’s Handbook: UCSD and Apple Pascal.
But after he graduated, he was running at what he calls a “high level of mediocrity,” freelancing for IBM, blowing glass, and running a company that built storage cabinets for CDs.
In 1989, his mother died suddenly, and it made McKelvely reevaluate his priorities. “I just asked myself, do I want to be mediocre at everything? And so I decided that one of the things I had not done in my life was focus.”
So he gave up IBM and the CD cabinets (but not his glassblowing) and focused on starting Mira. Unfortunately, Adobe released Acrobat in 1993. “We got our heads handed to us by Adobe. … It was a giant mess.”
But while their imaging software failed, some good still came out of it all. That’s when McKelvey met Jack Dorsey, the future co-founder of Twitter.
The Entrepreneur and the Artist
McKelvey is a trained glassblower, who has even written a textbook on the subject. In the past, he’s used his studio to support himself while working on his startups.
“The cool thing about making a physical product is that you can do it whenever you want. So I could work on my technical companies during the day and head into the studio at night, make a bunch of work and stick it in galleries and make enough money to survive.”
For him, art and entrepreneurship go hand in hand, not just because one can fund the other, but because they are parallel endeavors that achieve the same outcome. McKelvey says he uses an archaic definition of the word entrepreneur, which broadens its scope beyond merely starting a company.
“The original meaning for the word entrepreneur was this crazy person who did stuff that hadn’t been done before.”
Square: Starting With a Problem
Dorsey started as an intern at Mira, and the two developed a bond that held fast over the years. After Dorsey was forced out of his position as CEO of Twitter in 2008, he reconnected with McKelvey and they decided to start a business together. They just had no idea what that business would be.
They brainstormed together and came up with a few ideas. They knew they wanted it to be something mobile. They started looking into a journaling app, until another idea came to McKelvey while in his glassblowing studio.
He tried to sell one of his glass pieces to a customer who wanted to charge it to her American Express card. But Dorsey couldn’t process her credit card.
He lost the sale.
“And so I called up Jack with the iPhone that I had in my hand and I said, ‘Jack, you know, it’s really stupid that this iPhone that does everything that I want it to do—it becomes a television, it becomes a book, it becomes a radio, a compass—but it couldn’t become a credit card machine. And this is stupid. We need to fix this.’”
And so, they came up with Square. They originally wanted to serve artists who couldn’t take credit cards or receive electronic payments.
“The tough thing about being an artist is, I make stuff nobody needs. Like, nobody has ever needed anything that I’ve made in the glass studio. So, you better be ready when they’re ready to buy and not make it too difficult for them.”
The challenge Square faced was serving a community that didn’t have the typical business setup.
“These little guys who didn’t have credit reports. Some of them didn’t have bank accounts. Some of them didn’t have credit scores. Some of them didn’t have mailing addresses. I mean they were weird outliers to the financial system.”
Even some of their bigger customers were still too small by the standards of the industry to process credit cards. So, they were forced to reinvent the entire process, from signup to hardware to pricing schemes.
And for McKelvey, that’s where real innovation comes from, when you are forced to improvise.
“Invention is something that has to almost be forced upon us. And people get inventive when they have no other choice.”
The Innovation Stack
A few years after Square launched, McKelvey and Dorsey learned that Amazon had launched a small business payments service that was nearly identical to theirs. For the second time, McKelvey thought he was done.
But then, an amazing thing happened. About a year later, Amazon shut down their service and sent all of their former customers a Square reader. For a long time, McKelvey couldn’t figure out how they had survived a direct attack from a giant like Amazon.
“I was like, well what’s special about us? What did we do to be still standing after Amazon comes after us? And I couldn’t answer the question.”
He talked to former executives at a number of companies Amazon had directly targeted. Some of them sold to Amazon, while others went out of business. None had survived.
“I was happy we won, but I couldn’t answer the question, why did we win? I knew we’d won, but I’d like to think it’s more than just luck, but I just couldn’t explain it. So I went on this two-year quest to figure it out.”
McKelvey found that Square wasn’t actually alone. Many companies had survived direct attacks from large competitors, and they all had one thing in common, what he calls the “innovation stack.”
He describes the innovation stack as a series of interlocking inventions that create something you can’t attack. Instead of one big innovation, the companies that survive are innovative in several ways that all contribute to the overall success of the company.
And that series of innovations is almost impossible to copy in their entirety. For Square, it was easy to copy the hardware, but that was just one of 14 different innovations that made the company different in the online payments field.
“So I talk about 14 things that we did differently. Every one of those was necessary for the system to work. So, if we’d done 12 and we hadn’t done the 13th and 14th, Square wouldn’t have worked.”
One of the 14 was their system for handling fraud.
Since Square is a company that handles online payments, McKelvey says, it got hit from day one. Three years later, when Amazon came out with its product, Square had already developed unique processes for dealing with fraud, something Amazon couldn’t replicate.
But, McKelvey says, even if every aspect of a company’s innovation stack is visible, it’s hard for large companies to copy it all successfully. Why?
“Organizational culture,” he says. When a startup comes along with a new way of solving a problem, it’s difficult for a well-established brand to pivot, to change its ingrained processes to compete.
His example is Southwest Airlines. They revolutionized the boarding process, turning a 45-minute process into a 10-minute one. And they did it by rethinking the whole process, right down to cleaning the plane.
With Southwest, even the pilots helped clean the cabins before boarding new passengers, something McKelvey says United or Delta Airline pilots would not be willing to do because they were already used to a certain organizational culture.
Because Southwest was new, they could set their own culture. “Let me tell you that the Southwest pilots, you didn’t become a Southwest pilot unless you were willing to play their game.”
McKelvey writes about Southwest and several other companies who shook up their industries in his new book, The Innovation Stack.
No Experience Needed
As he researched his book, McKelvey noticed something else about these innovative companies. Companies from Southwest Airlines to the Bank of Italy all began the same way he did—by solving a problem for a previously ignored segment of the market and having no idea how to do it at first.
He came to the realization that starting a business isn’t about the market needs, but rather the needs of a small, even fringe group of people. “I don’t think you should choose a big market. I think you should choose a big problem,” he says.
From Southwest, which figured out how to make flying affordable, to the Bank of Italy, which started out giving loans to farmers and immigrants when other banks wouldn’t, they were all sailing in uncharted waters.
And because of that, none of their founders had any kind of expertise in their field.
“I looked throughout history and I saw all these people who had basically no qualifications for what they did.”
That included himself and Jack Dorsey. While McKelvey holds two degrees, he finds neither relevant to what he does today. As for Dorsey?
“So, like, Jack’s professional credential, he has one professional credential. He is a massage therapist. I mean, you’ve got a glassblower and a massage therapist and they start a payments company. We knew nothing about payments. We didn’t know a thing.”
The Innovation Continues
McKelvey still sits on the board of directors for Square, but his focus is now on his new startup.
With Invisibly, he wants to change the way publishers monetize their online content. The current model, where ads pop up in the right rail, across the top of the page, and even on top of the content you’re trying to read is infuriating to McKelvey.
“Our attention is being bought and sold without our permission or knowledge. So when you watch something or read something, you’re essentially trading your attention to advertisers in a system that is largely biased against you, and in many ways subverts your interests.”
And, he says, ad blockers are not the solution, which is essentially saying to journalists, “Starve to death, guys, because I’m not paying anything.”
So he and his team at Invisibly are working on a way to allow users to control the ad experience.
McKelvey has also founded a nonprofit called LaunchCode, which trains programmers for free and helps place them in jobs. Oh, and he’s also a deputy chairman for the Federal Reserve in his hometown of St. Louis.
McKelvey has built his success by solving problems. “If you have a problem that has never been solved, man you probably want me around.”
And he’s seen other people create world-changing companies by doing the same, and by building innovation stacks that all but guarantee their success.
He looks at entrepreneurship, not as the process of starting a business, but as an art form, a means to bend and mold an industry to create something no one’s seen before, something that makes life a little better for everyone.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Laurie Mega
Tue, 10 March 2020
292: From LearnVest to Inspired Capital: Alexa von Tobel’s Mission to Help People Find Financial Stability
We’ve all heard the motivational mantra that if you love what you do, you’ll never work a day in your life. But Alexa von Tobel sees things a little differently.
“If you love what you do, you’ll work every day of your life,” she says, “and it’s because I’m so passionate about what I’m doing.”
The mission that gets von Tobel jumping out of bed every morning is one that impacts every one of us—finding financial stability. Without it, whether you’re a working family or a creative new startup, it’s near impossible to plan for the long term and ultimately thrive.
Von Tobel came to this understanding after graduating from Harvard and beginning a career on Wall Street, when she realized that, while she was great at managing the business finances of others, she was woefully unprepared to manage her own. And she quickly discovered that she was not alone.
That lit a fire underneath her to improve financial education, inspiring her in 2008 to launch LearnVest, a digital financial planning business that teaches investment and finances. The award-winning company became wildly popular, especially among women.
She ended up selling that business, but in 2019, van Tobel decided to take her passion for financial advising in a new direction. Today, she manages Inspired Capital, a $200 million investment firm that’s supporting early stage startups.
This massive new undertaking is all rooted in van Tobel’s desire to support ambitious entrepreneurs and help people achieve financial stability. That, and a deep love of math.
Freedom to Think Bigger
Von Tobel says she was an entrepreneur from day one. She’s always been drawn to the toughest problems, outside-the-box thinking, and bringing joy to others. And when she recognized her own problem with managing her personal finances, she suspected that this could be a cause worth taking on.
Von Tobel says that 78% of all Americans live paycheck to paycheck and that the average person doesn’t even have $400 in a savings account. And the crippling anxiety that comes from mountains of debt and living one medical crisis away from going broke? She firmly believes it holds people back from concentrating on something bigger.
“If you’re living for tomorrow, you can’t think long term,” she says.
Despite her lifelong love of math and her driven personality, she’d never been taught how to manage her personal accounts, invest her money, or plan for retirement. It became clear that many of her peers had not either.
“I think it’s insane that it’s not taught in every high school, college, and graduate program in America,” von Tobel says. “I mean, it’s not that dissimilar to basic hygiene.”
From von Tobel’s perspective, money is a basic lifeline that enables people to care for themselves. Therefore, she believes everyone should learn how to intelligently manage it.
That’s what drove her during her years as founder and CEO of LearnVest—the unwavering belief that financial education was a key to happiness.
“If you can create real financial stability for a family,” she says, “you can help a family thrive.”
Among the strategies she taught through LearnVest were how to grow a successful savings account by setting aside 20% of each paycheck, no matter what, and the benefit of establishing firm ground rules for financial health. She taught when to begin investing (yesterday), preparing for retirement (the day before yesterday), and how to plan effectively for the ebbs and flows of life.
But what about the people (like, oh, I don’t know, the writer of this article, for instance) who are deeply terrified of math? Von Tobel says that’s not a problem.
“Personal finance is basic math,” she assures. “It’s not complicated math. It’s really straightforward math—what comes in, what goes out, is there something left, and are we saving it properly? Really, it’s more organization than math.”
After more than a decade spent as a financial educator and the sale of her business to Northwestern Mutual in 2015, von Tobel decided it was time to give something new a try.
And when her husband pointed out how many hours she had spent financially advising entrepreneurs for free, she realized she may have inadvertently stumbled upon her next big project.
Shooting for the Moon
Inspired Capital was born from von Tobel’s passion for financial education, combined with her desire to help entrepreneurs reach their goals. The result is an early stage and seed investment firm, driven by women (also led by former Secretary of Commerce Penny Pritzker) and funding startups nationally.
Von Tobel now meets with at least 75 founders each week in pursuit of new investments of all shapes and sizes. From tech to product-based business, von Tobel is interested in all of it, provided they have a good idea and a plan.
She says that the best founders who have pitched her get to know her firm before reaching out. They also don’t get discouraged by rejection. Von Tobel says that just because it’s a no today, doesn’t mean it’ll be a no tomorrow.
And while founders are waiting for their yes, von Tobel says there are many things they can invest time in learning. She says that the biggest mistake she sees founders make is running away from the aspects of the business that make them feel inadequate, passing it off to others before even giving it a try.
“I think it’s the typical kind of head-in-the-sand ostrich move,” she says. “You’ve got to lean into the things that make you nervous.”
She believes this is what enables businesses to address issues before they reach critical mass, while also making founders feel capable and bold.
“If you want to build a really good business—if you want to get really good at being an entrepreneur—you’ve got to get good at everything,” she says. “And I don’t mean you literally have to hold every job, but you have to take the job, get pretty darn good at it to the point where then you know how to hire for it, and then you can pass it off to somebody better at it.”
Once the machine of a new business really starts whirring, von Tobel says that it’s essential to have an eye on building up the reserves.
“You want to make sure you are never within nine months of running out of cash,” she says. “Because if you need to go fix that, putting a plan together to go fix that can sometimes take three to six months, and you don’t want to be in a position where literally you can run out of money.”
While she acknowledges that smaller businesses can get away with slightly less in the bank, she wouldn’t recommend leaving the stability of a company to chance or dependent on a tight timeline.
And ultimately, von Tobel believes these healthy savings accounts are what embolden business leaders to take new and exciting risks.
“I’m not risk-averse,” she says. “I shoot for the moon, but I have a plan B that has enough cash...that gives me enough confidence to shoot for the moon. Having a good solid financial plan gives you the comfort to take more risks.”
And the best part of all is that von Tobel believes there’s never been a better time to launch a business than right now.
“Every year it gets less expensive to stand up a company,” she says. “Every year there are better online resources to make it easier to do.”
From free online resources to highly affordable software for startups, she says founders need only do a light Google to find a flood of resources at their disposal.
As an investor passionate about the startups and founders of tomorrow, she can’t wait to see what thrilling new business plans come across her desk next. And that’s why she encourages struggling founders to keep pushing, keep growing, and keep pursuing their dreams.
“You’re building something new. You’re building something special that serves a purpose,” she says. “And that’s pretty powerful.”
Alexa von Tobel’s Tips for Building a Successful Business
Von Tobel says that entrepreneurs can be distracted so easily by the task of building a business and marketing a product that they forget to perfect the product. Talk to the customers. Find out what works and what doesn’t, and make adjustments. Before diving headfirst into marketing a product, she reminds entrepreneurs to really nail product-market fit.
Rather than sinking tons of cash into a paid marketing strategy up front, von Tobel recommends that founders begin by delighting their customers and encouraging them to share their experiences with the brand. She reminds entrepreneurs that word-of-mouth marketing is free and often more effective than traditional marketing for startups.
Once revenue is climbing and there is a little more wiggle room, von Tobel says the time has come to give paid marketing a go.
Above all, von Tobel reminds entrepreneurs that the constant pursuit of growth without fear of negative feedback is essential to success.
“I think the best founders are learners,” she says. “They are comfortable with negative feedback. They want to make it better, and they are constantly just listening and learning obsessively.”
Wed, 4 March 2020
When Peter Diamandis was a kid, there were two life-changing moments that shaped him into the person he is today: the launch of the Apollo space program and the release of Star Trek.
These two events inspired Diamandis’ love of space and taught him to always keep his eyes on the future. It’s no surprise then that Diamandis went on launch over 20 companies in the areas of space, longevity, venture capital, and education.
Diamandis has also dedicated himself to supporting others who make an impact on the world, which is why he founded the venture fund BOLD Capital Partners, the X Prize Foundation, and Singularity University—all organizations focused on promoting technologies that have the potential to improve society.
In this interview, he shares his thoughts on what it takes to build a sustainable business, his predictions for industries like education and healthcare, and what he’s most excited about in terms of future innovations. This is a conversation you won’t want to miss!
Wed, 26 February 2020
Craig Walker’s on a mission to overhaul the way businesses communicate, with cloud-based phone service Dialpad.
As a securities attorney in Silicon Valley, Craig Walker met regularly with a who’s who of Palo Alto venture capitalists, startup founders, and investment bankers. He thrilled at their stories of big ideas and bold risks.
Then one day in 1998, he decided it was time to live one of those startup stories of his own. When life offered him an opportunity to sit on the other side of the table, he said yes without hesitation. That decision shaped the rest of Walker’s life, first as a VC and soon after, as head of his own companies.
Today, he’s the founder and CEO of Dialpad, a cloud-based business communications company that is rapidly approaching the coveted $100 million revenue benchmark. The San Francisco-based startup is changing the way businesses communicate, by shifting them from traditional desk phones to cloud-based service, and all the powerful features that come with it.
In fact, much of Walker’s career after that fateful day has been all about improving business communications. He’s been disrupting the stodgy old office desk phone in some way or another for around 20 years, having laid the groundwork for Google Voice and Yahoo! Voice, and ultimately taking them on as a formidable competitor.
From Attorney to Founder
Walker was quite successful as a lawyer, but it was in that role that he became drawn to the prospect of starting his own business, and learned what it takes to make it happen.
“Once I was a lawyer and I met a bunch of CEOs and founders, I realized there wasn’t any real magic to it,” Walker says. “It was just taking a risk or taking a chance and having a good idea and a good team to go along with you.”
When a client asked him to leave his job behind and join a venture fund, he took the opportunity. But his time with TeleSoft Partners and Sterling Payot Capital, both of which invested in early-stage telecom startups, was only a combined four years.
In November 2001, when an internet telephony service asked him to step in as CEO, again, he took the leap. And he’s been in the game ever since.
That company was the first iteration of Dialpad, where Walker served as CEO and built relationships with his coworkers and others in the tech space, who would stick by his side through future ventures.
When Dialpad 1.0 was acquired in 2005 by Yahoo! as the base for Yahoo! Voice, he took on his first role as a founder and launched a similar company, GrandCentral Communications. This was yet another foray into the world of online phone communication, but in less than two years, it was also acquired, this time by Google.
For nearly four years, Walker continued on with GrandCentral, now called Google Voice, but before long it was time for him to move on once again.
Having now laid the groundwork for both Yahoo! Voice and Google Voice, Walker was ready to challenge them for supremacy.
Desk Phone Disruption
A good name is hard to find. So when Walker and crew decided to found a new online communication company, they knew they needed to have a little chat with Yahoo! first.
The owner of the first version of Dialpad agreed to sell the name back to Walker—including the all-important URL—and in 2011, Dialpad 2.0 was off to the races.
His goal remained very much the same—the master the art of using the the internet as your business phone. As Walker boasts, Dialpad offers “all the power of a business phone system, but from anywhere in the world.”
“The world has changed,” Walker says. "You’re working from anywhere at any time, and not having the ability to do that from your business phone system is crazy.”
Using the latest iteration of Dialpad, businesses can toss their hardware to the curb and use the cloud to connect team members and clients.
By importing existing numbers, companies can use a single system to manage all phone communications. There’s even an app that instantly transforms a cell phone into a work phone, allowing employees to port their number and merge into existing CRMs, productivity suites, and social networks. And with an AI integration that alerts supervisors of red flags like an irate customer, prompting them to step into the situation, sales teams could grow and improve with ease.
Convenience was key, and customers of Dialpad rapidly embraced the new technology. After winning TechCrunch Disrupt and being featured several blog posts and articles, Dialpad saw a flood of new inquiries.
But even with all the buzz around the new business, Dialpad wasn’t above the need to make cold calls. As you might expect, however, Walker’s approach to cold calling is a little different than just picking up a phone and hoping for the best.
He explains that they first built a list of “modern-thinking companies.” Then, they investigated what tools those businesses were already using to accomplish basic day-to-day tasks. If they found a list of antiquated, on-premise technologies, they crossed the business off their list. If, however, they found that a company used other cloud-based technologies, they knew they’d found a lead and would reach out.
“Ultimately you want to get up to the CIO, but building champions below the CIO is great,” Walker says. “The folks who are going to be actually responsible for managing the day-to-day of the product are great ones to start with.”
As momentum built, so did Dialpad’s sales team and advertising budget, along with a loyal customer base.
“I don’t see any other competitors on the horizon coming out of the startup world,” Walker says, “so now you’re just competing against the legacy guys that you know you’re ahead of and can out-innovate because you’re more modern.”
Despite their edge as an innovator, Walker acknowledges that no business grows without facing its share of challenges.
“On the road to success, there’s plenty of roadblocks and challenges on a daily basis, and I think every startup goes through those.”
The first major hurdle Dialpad had to clear was convincing major corporations to trust all of their critical calls to the cloud. This was back in 2011, when the concept was still fairly new.
But even if they could achieve that goal, Walker had to struggle through the complex process of raising money, gaining traction, finding early customers, building a healthy organization, remaining innovative while serving existing customers, and so much more.
Most importantly, Walker had to become excellent at making decisions. He insists, however, that this doesn’t necessarily mean being right all the time.
“There have been many times I’ve been wrong,” Walker says. “You just need to adjust and move on, because you’re never going to always be right, and if you wait until everything is so clear that you’re always right, you’re going to be moving way too slow.”
The key is to remain attentive and flexible.
“One of the beauties of a startup is if you do realize you missed something or you moved too quickly one way or you moved too slowly one way, you can pretty quickly adjust it as long as you stay nimble,” he says.
And, above all, Walker advises founders to trust their instincts. Even though he has spent the last two decades gathering a collection of trusted friends and advisors, he still occasionally throws caution to the wind and goes his own way.
“The decisions all come down to you, and, because of that, I do think you’ve got to trust your gut,” he says. “You’re the one that’s going to live with the outcome. Don’t let people talk you into things that don’t make sense to you.”
Walker explains that, because everyone has a different perspective, two equally intelligent and well-informed people can come to diametrically opposed viewpoints on a situation and what is best to do next.
So his best piece of advice to new founders is simply this: “Stick to the North Star of what your idea was, and see it through.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Wed, 19 February 2020
289: Understanding the Power of Relationships to Achieve Business Goals, with Contactually Founder Zvi Band
Zvi Band describes himself as an introvert—someone who tends to be inward-looking, generally preferring to spend time alone. At the same time, he’s a successful entrepreneur, writer, and speaker who preaches the importance of relationships.
“I actually found that all of my business, and more importantly, all of the amazing opportunities in my life came from, of all things, knowing the right people,” Band says.
That may not sound like something an introvert would say, but for Band, human connection is about quality over quantity. He isn’t focused on collecting new friends on social media or passing out stacks of business cards at mixers all over town.
Instead, he is focused on maintaining and nurturing the relationships he already has. That, he says, is the key to success. Yes, it’s all about relationships, but in a world of constant connectivity, it’s about focusing on the meaningful ones.
“I was in a room of a hundred real estate agents this morning and everyone raised their hand when I asked, ‘Who here thinks their relationships are their most important assets for business?’”
The power of relationships is more than a philosophy for Band; it’s his business. His enterprise SaaS platform, Contactually, helps professionals, particularly real estate professionals, build and maintain relationships by automating personal communication.
A resident of Washington, DC, he’s been named one of Washingtonian Magazine’s Tech Titans six years running, and has been featured in publications like TechCrunch, Washington Post and USA Today. He’s even written a book on the topic, Success Is in Your Sphere: Leverage the Power of Relationships to Achieve Your Business Goals.
Why Are Relationships So Important?
Band understands that humans are naturally social creatures, and the biological need for connection translates directly to the business world. He sees that as an opportunity to build success through the support of a professional network.
“We rely on social connections and relationships to help keep us safe and therefore help us identify who we should work with,” he says.
To Band, relationships are directly connected to reputation, something that has become either an asset or a hindrance, depending on how people view you as a professional. Because the world is so connected, professionals are now competing with other professionals with the same skills on a global scale. The only way to differentiate, he believes, is through reputation.
“Because no one can fully copy you. So that reputation and your ability to maintain that reputation ended up becoming us.”
How does a good reputation resonate in the business world? Through the relationships professionals build.
Band points to a study of banking customers in Germany and the relationship they have with their bank. “They found that when a customer is referred by another customer, there’s a 25% higher contribution rate, so referred customers become better.”
Relationships Paved His Own Career Path
Band started out as a software developer, eventually leading a team at an intelligence agency. In 2009, he struck out on his own, creating a software design and development firm called skeevisArts.
It was there that he started thinking more about relationships and how they can make or break a career—or a company. But he also found that maintenance and development of those relationships was tough.
“I would meet people for coffee and two weeks later completely forget who they were. So, a lesson learned for me was, ‘Okay, well, what’s the right thing to do, here? Well, how can I solve this with software? How can software help us build and maintain better relationships?’”
And that’s how Contactually started. With the help of fellow co-founder Jeff Carbonella, he developed a platform to organize and automate personal contacts in order to maintain and build relationships that he knew were so critical.
They brought on Tony Cappaert as the third co-founder to lead business development. Both Cappaert and Carbonella were connections Band already had. Carbonella was a lead engineer at Band’s consulting firm, and he had gotten to know Cappaert through the local community.
He started small, not really thinking about building a company but more fleshing out an idea. They initially decided to focus on real estate agents, who rely heavily on relationships to sell homes and build their business.
In 2011, they were chosen to participate in the 500 Startups accelerator program, where they raised their first venture capital.
“We quite literally had an apartment with three mattresses on the floor,” Band says, laughing.
Over the course of eight years, however, the company has raised $12 million in venture capital. It now has, according to Band’s personal site, “tens of thousands of customers, including eight of the top 20 real estate brokerages in the country.”
And Band practices what he preaches. To this day, he uses his own tool to maintain his professional relationships, keep up with current and potential investors, recruit new talent, and stay connected to the media and important influencers.
He even used it to develop a relationship with Compass, the national real estate company that acquired Contactually in 2019.
“Robert , the CEO, knew me well enough that he had absolutely no problem reaching out to me to say, ‘Hey would you be interested in a potential partnership?’ And that’s an important thing, right? It’s not like companies just get sold overnight.”
Band now using all he’s learned about relationship building to mentor a new generation of entrepreneurs.
In 2010, he founded MadeInDC, which markets startups in the DC area and helps entrepreneurs get started. He is a co-founder and co-organizer of DC Tech Meetup, one of the largest tech meetups in the country. And he created DC Tech Summer, where over 550 interns apply to work at tech startups in the area.
That’s a lot of new, powerful relationships that Band is out there, helping to form. Not bad for an introvert.
Key Lessons in Nurturing Relationships
Throughout his career, Band has learned some valuable lessons about harnessing the power of relationships. He shared some of them with us.
On Starting a Business
Band tried to start a few companies before his success with Contactually, while he was still running his consulting firm. None of them really took off, and he realized it was because he was working on his own and only on the side. He wasn’t committing to their success.
This was true of nStructo, a backend-as-a-service tool he tried to get off the ground.
“With nStructo, we had no customers, we had no users, we had no team. It was just me. So it almost could exist in my head or it could shut down in my head and no one would know and no one would care. And so I knew that I needed to have a team around me.”
He realized how much he needed that team to keep him accountable and give him the discipline to invest time in his next startup venture.
On Identifying the Right Relationships
While cultivating relationships is the name of the game, Band stressed the importance of identifying the right relationships first.
To do that, he says, you first have to identify your goals, which will lead you to the right people to reach out to. He learned that the hard way when networking for his consulting firm.
“So, for example,” Band says, “I used to think that going to a lot of tech meetups and developer meetups was a great way of doing business.” But Band had to find companies in need of software services, not other developers.
“I was looking to work with a lot of design agencies, so I would go to design meetups and pitch myself as a software consultant. I would go to marketing meetups.”
By clarifying his goals, he found the right people to reach out to.
On Cold Outreach
While Band stresses the importance of cultivating current relationships, he does see merit in cold outreach to expand a network. But, he cautions, a generic or overly produced message will fall flat on your audience.
“Everyone is used to getting slammed with cold emails,” he says. “Therefore, if you write a cold email that actually stands out, or if you do it via LinkedIn or you do a handwritten card, or something that says okay...this person genuinely wants to talk to me or be of value to me, then I’ve actually found that people are pretty receptive.”
Also, he says, make the contact short and sweet. An email, for example should be no more than a few sentences that engage your contact directly. Asking a simple question of your prospect rather than talking solely about yourself can draw them in and send the message that you’re interested in a conversation.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Laurie Mega
Thu, 13 February 2020
Erik Bergman’s entrepreneurial journey started with trading hockey cards on the playground.
When Bergman realized that owning coveted sports memorabilia made him feel valued and won him friends, he became obsessed. As he got older, his focus eventually shifted from trading cards to making cash.
After a brief stint as a professional gambler, Bergman co-founded a website consultancy firm called Catena Media in 2012. The affiliate-based marketing company focused on the online gambling industry and eventually IPOd at €160 million.
Despite achieving the wealth Bergman had relentlessly chased since his youth, he was still unhappy. So he set out to learn the true path to fulfillment and eventually found deeper meaning in his life through charity work with his latest project, Great.com.
Check out this interview to learn more about Bergman’s journey to finding happiness and the most important lessons he learned along the way.
Wed, 5 February 2020
Richard Li puts customer service above all when it comes to his luggage company, July.
This unfaltering commitment is why he personally makes house calls to address complaints and why he recently hand-delivered packages after realizing that some customers wouldn’t receive the luggage they ordered in time for the holidays. But this high level of service is only a small piece of Li’s success story with July.
Li, who has previous entrepreneurial experience from his furniture company Brosa, has also figured out a “magic” formula for manufacturing, marketing, and selling physical products. He used this knowledge to grow July from $0 to $5 million in revenue in just a year. And now he’s looking forward to opening up additional retail stores, introducing more products, allowing for more luggage personalization, and expanding into international markets in 2020.
If you want to learn more about what it takes to launch and scale a business that revolves around a physical product, be sure to give our interview a listen!
Also be sure to check out our latest online course, Ecommerce Masters, where Richard Li is one of the five instructors teaching advanced ecommerce skills.
ATTENTION: We're excited to announce that Richard Li has partnered with Foundr to teach one of the modules in our course, Ecommerce Masters. Get on the Free VIP Waitlist to be notified when we open enrollment!
Wed, 29 January 2020
286: How Annex Products Co-Founder Rob Ward Used the Power of Prediction to Build a Multimillion-Dollar Company
Rob Ward always seems to be one step ahead.
Before Kickstarter took off, Ward and his co-founder Chris Peters launched two successful campaigns on the platform, funding Opena and Quad Lock—the two products that led to the founding of Annex Products. Then Ward was early to the Shopify game, which he successfully used to sell his products for several years. Ward was also quick to see the potential of Facebook Ads and has used them to scale Annex to a multimillion-dollar business.
This ability to spot trends, paired with his finely-tuned approach to product development, has helped Ward find tremendous success as an entrepreneur. While Opena is no longer active, Quad Lock has become a leading device mount and accessory company, serving a wide variety of users—car commuters, motorcyclists, kayakers, even hang gliders. As a result, Quad Lock sells hundreds of thousands of units each year in over 100 countries.
We’re now thrilled to have Rob Ward as one of the five instructors of our latest online course, Ecommerce Masters, teaching advanced ecommerce strategies.
If you’re curious to learn more about Ward’s approach to trendspotting, product development, and more, we highly recommend you check out this episode!
ATTENTION: We’re excited to announce that Rob Ward has partnered with Foundr to teach one of the modules in our course, Ecommerce Masters. Get on the Free VIP Waitlist to be notified when we open enrollment!
Wed, 22 January 2020
285: The Art of Mind-Blowing Open Rates, Email Flows, and Authentic Email Marketing, With Boundless Labs’ Chase Dimond
At 27, Chase Dimond is already considered a marketing veteran. In addition to overseeing the marketing teams of various companies, Dimond has also founded many of his own ventures, such as Soundjuice and ZenPup.
His most recent company is Boundless Labs, an agency that focuses on email marketing for ecommerce—with a special focus on CBD companies. Thanks to its modern and human-centered approach to emails, Boundless Labs acquired 30 clients with six- to eight-figure revenues in a little over a year.
Dimond has also secured mind-blowing results for those clients, such as sending emails with 40% to 70% open rates (compared to the industry average of 20% to 25%) and helping companies generate 20% to 30% of their total revenue with emails.
If you’re looking to master the art of email marketing, this podcast episode with Dimond is a great place to start! He gives us a sneak peek into the best practices he uses with his own clients at Boundless Labs, along with other helpful insights.
Thu, 16 January 2020
284: Mastering the Art of Paid Media: Spending Over $85M on Facebook, With Structured Social Co-Founder Nick Shackelford
Nick Shackelford used to be a goalie for the American pro soccer team, LA Galaxy II. So how did he end up being an expert in the online ad space?
After leaving the soccer league at the end of 2015, Shackelford felt limited by his career options—either training people or playing in a low soccer division—and decided to take the road less traveled instead. He gained experience in paid social media through an internship at PepsiCo. and a stint at a digital marketing agency.
Shackelford used the knowledge he gained to start his own fidget spinner business called Fidgetly. This was where he further cemented his paid marketing know-how and also mastered the art of scaling quickly without breaking the bank. Even after the close of Fidgetly, Shackelford continues to put his knowledge to good use by helping brands through his online marketing, branding and consulting company, Structured Social.
Whether you’re looking to learn more about scaling, media buying, or paid advertisements, Shackelford is your guy. Make sure to check out his interview to take a deeper dive into these fascinating topics!
Thu, 9 January 2020
283: Splasheo Founder Gideon Shalwick on Video Marketing, Personal Branding, And Discovering Your ‘Why’
Gideon Shalwick believes there’s one trait every entrepreneur needs, and it’s not persistence, a strong work ethic, or creativity. It’s self awareness. His own desire to better understand himself has led him down a winding road of serial entrepreneurship and self-exploration.
It’s what first inspired Shalwick to drop out of the 9-to-5 club early in his career, move to another country with his wife, and start fresh. The pursuit of his true calling led him to publish a successful ebook in 2006, and two years later, develop a blogging training product that boasts over 40,000 subscribers. Meanwhile, Shalwick was also building up a personal brand as an expert in video marketing.
But his journey didn’t stop there. In 2012, Shalwick founded video captioning service Splasheo, which has become a major source of passive income. He followed that success in 2014 with Veeroll, a SaaS company that automates the production of video ads for YouTube, Instagram, and Facebook, and now dominates the video advertisement space.
While Shalwick saw great success with these companies, he found that tug of self-discovery pulling at him again. He realized he had become so caught up in the startup world that, in the process, had forgotten who he was.
So he decided to walk away from the projects he spent over a decade building. Now, he’s in a period of self-rediscovery and is sharing his entrepreneurial wisdom with others while plotting his next move.
Five years into his career, Shalwick decided to start over, for the first time. He had graduated with an electrical engineering degree from the University of Canterbury in New Zealand and immediately recognized that he didn’t enjoy working for someone else.
In an attempt to try another path, Shalwick got his master’s degree in engineering management, which focused more on the people side of business. Still, he felt frustrated by his job.
“I don’t think there was any job in the world that would allow me to live out my potential the way that I wanted to, so I felt really stuck,” Shalwick says.
He turned to his wife and suggested that they quit their jobs, move to Australia, and start from scratch.
At first, the plan was for Shalwick to find a job in Brisbane as their ticket in. But three months later, he still hadn’t found employment. He asked his wife to try applying for jobs as well and, within a week, she had three offers. While this allowed them to successfully relocate, Shalwick still had no idea what to do with his own career.
Shalwick began reading books on entrepreneurship, with the hope that they would point him in the right direction. It was Rich Dad, Poor Dad, which talks about the importance of building up an asset, that eventually struck a chord. Shalwick wondered how he could build up his own asset and started to explore a variety of options.
He considered everything from franchises to a dog-washing business, but ultimately ended up attending a book-writing course that gave him his first taste of entrepreneurship. In 2006, Shalwick wrote and sold a personal development ebook for $47. The title? Millionaire Dropout Secrets.
“I blush when I think about the title, but I have an excuse,” Shalwick says. “The course taught us that titles with the words ‘secrets’ and ‘millionaire’ in it do really well. So I came up with the title Millionaire Dropout Secrets...I wrote it as a reporter, looking at everyone who dropped out of the system and became successful.”
The ebook was a huge success. The instructor who taught the course offered to help promote the product to his database of 10,000 people. An email was sent out on a Friday night and, by Saturday morning, Shalwick’s ebook was selling like hotcakes. In fact, he sold enough copies to where he felt extremely optimistic about the idea of selling digital products from the comfort of his home for the rest of his career. Shalwick was on cloud nine.
Until one day, his ebook ran out of steam.
After the initial rush of sales, Shalwick’s ebook experienced virtually no traffic for two years. Because he had little experience with business building, traffic generation, or customer relationship management, he had no idea how to bring his sales back to life.
But Shalwick knew he could learn by tapping into the expertise of others, so he purchased a camcorder and decided to start interviewing people on video to better understand how to set up successful online businesses.
Shalwick snagged his first interview at an industry event, where one of the speakers agreed to talk to him. Over time, this was the formula Shalwick used to eventually collect five gigabytes worth of video interviews. He planned to upload them all to a membership site, but before he could launch, the sheer size of the files ended up killing his PC and the project never got off the ground.
But all the effort wasn’t for nothing. Shalwick became close friends with one of his video interviewees, and together, they launched a product called Become A Blogger (a course for those who are just starting out with blogging or looking to take their blogging to the next level) in 2008. Within the first two weeks of launching, the business had over 10,000 subscribers and an income of over $20,000 per month. This was life changing for Shalwick, who had been making no money for the previous two years.
That business gave Shalwick the exposure he needed to start building up his own personal brand, as he took to YouTube to teach people about building successful video products and online businesses. His channel grew to 36 million views and 360,000 subscribers, and the name Gideon Shalwick became widely associated with the video marketing space.
When Shalwick and his wife welcomed their first daughter in 2010, everything changed.
“I realized...what if something happens to me? Then what’s going to happen to the business and income for the family? So I decided I’d better change tactics.”
This dawning realization is common for entrepreneurs who build personal brands. Shalwick believes the most important thing is to know yourself and understand the benefits and drawbacks of each type of business.
For instance, personal brands are simple to start up, have low overhead costs, and make it easy to build a connection with your audience. But as Shalwick realized, the trouble is that a personal brand can’t survive without its creator.
If you have a personal brand, Shalwick recommends looking at other ways to build assets that can run independently of you. This could mean investing your income in other wealth vehicles or creating a separate product or service.
That’s the reason Shalwick decided to launch his human-powered video captioning service, Splasheo, in 2012. To this day, it still functions without Shalwick and serves as a passive source of income for his family.
A few years later, Shalwick decided to venture into the SaaS space. He initially wanted to set everything up through Splasheo, but decided it would be cleaner to create an entirely new entity based in Singapore. And that’s how Veeroll was born in 2014. This SaaS company was created to automate production of video ads for YouTube, Instagram, and Facebook. The idea came from the nine years Shalwick had spent in the video marketing industry, where he constantly heard about the biggest pain point in the market: the production and editing process.
Because this software so directly addressed a source of frustration for video marketers, Veeroll quickly became a leader, and today is a million-dollar company.
The Hunt Continues
Despite the success of Veeroll, Shalwick decided to sell his shares and walk away from the company earlier this year. Working in the world of SaaS was intensely challenging, he explains, even for someone with a technical background.
He recounted the time he reached out to Clay Collins at Leadpages for advice when he first started Veeroll. Collins told him, “There are a million things, and you have to get them all right.” While Shalwick didn’t understand what he meant at the time, he grew to appreciate the truth behind this statement.
But it wasn’t just the technical aspects of the SaaS business that were overwhelming. As Shalwick describes, he was also burned out by a high-stress environment, brought on from pursuing extremely aggressive goals. That’s when he recognized how easy it was to get caught up in the wrong things and lose sight of what’s important.
So he decided to step back once again, and focus on rediscovering himself.
Shalwick has spent a lot of time contemplating his life’s vision. He believes that for each of us, this vision is guided by an “unconscious drive,” what some people refer to as their “why.”
He discovered after much reflection that his unconscious drive is for significance. All of his actions had been driven by a desire to prove himself. He was embarrassed by this realization at first, because it felt superficial, but he came to embrace it over time.
Now that he understands this reality, he has made an intentional effort to channel his drive from achieving significance for himself into helping others feel significant. For Shalwick, this has been a huge game changer and has made the vision for his life much clearer.
“As entrepreneurs, you really have to get to know yourself,” Shalwick says. “Each of us has a unique capability and gift or talent we can give to the world. But it’s conditioned away by society...and it’s a real challenge to rediscover that again. When you can rediscover that and find your true why, then everything becomes a lot easier.”
The Formula for Successful Video Ads, From Gideon Shalwick
Shalwick uses the AIDCA formula to ensure successful video ads that consistently convert customers. Below is a breakdown of each component of the formula:
A = Attention. The first part of the formula is all about grabbing people’s interest with a hook. According to Shalwick, one of the most effective ways to do this is to identify your audience’s biggest pain point then turn it into a question. For instance, if your intended audience is video marketers, you may ask: “Are you struggling with video editing?”
I = Intrigue. You can build intrigue with a story of open loops that draws people in and makes them want to keep watching. In other words, create a sense of mystery. This part of the formula relies on the Zeigarnik Effect, which states that people remember uncompleted or interrupted tasks better than completed tasks.
D = Desire. Now it’s time to create desire around the solution. Shalwick recommends listing the benefits, features, and differentiators of your product or service to make it more appealing to your viewers.
C = Conviction. According to Shalwick, it’s important to provide as much proof as you can so the audience is convinced that the solution you’re offering actually works. This can come in the form of testimonials, social proof, or a stamp of approval from an authority figure.
A = Action. Finally, you have to ask people to do what you want them to do. This is where you insert a call to action and guide your audience in the direction you want them to go.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Sophia Lee