The Download: Six serial entrepreneurs share lessons from the trenches
By Steven Overly,
The road from idea to sustainable business is littered with unexpected curves and blind spots that force entrepreneurs to turn on a dime or abandon the journey altogether. Six local entrepreneurs who have helmed two or three (or eight) companies offer lessons they’ve learned from the pursuit.
Chairman and co-founder, Ringio, a telephone service for forwarding calls.
Past ventures: Founder of Angel.com, a customer service platform at Vienna-based MicroStrategy.
In his first venture, Zirngibl managed to escape the pitfalls that come with raising money from investors in exchange for a stake in the company. MicroStrategy bankrolled the endeavor from the beginning as one of its own divisions.
“What was interesting with Angel is we clearly had more money available [to us] and more resources, so that’s good and that gives you the mindset of being entrepreneurial but with a little bit of a safety net,” he said.
But even home-grown money isn’t devoid of headaches, Zirngibl discovered.
“You are a start-up but at the same time you are taking money from a highly visible, publicly traded entity, so there is more overhead created by that,” he said. “In an incubated business it’s a little ironic that the more successful you are and aggressive you want to be, [the more] the organization kind of holds you down.”
Zirngibl and his co-founders, also Angel.com alums, opted to bootstrap Ringio so that they could grow at their own pace and liking. They raised about $300,000 from angel investors earlier this year to hire support staff.
Chief executive, Noble Life Sciences, a biotech services company.
Past ventures: Co-founder of Avalon, a biotech company that went public in 2004 and sold to Clinical Data in 2009.
Before Carter’s 10-year career as co-founder and chief executive of Avalon, he passed around business plans to confidants for a company named International Genetics Associates.
Two of those advisers said the document was well written except for one minor oversight: You can’t write a business plan without any financial projections. Lesson learned.
“At the very earliest stages I try to find a very skilled businessperson to march down the path with the scientists to make sure we have that incredibly important piece being driven by someone with that skill set,” he said.
In biotechnology and other regulated industries, Carter said, he has learned the same holds true for legal and regulatory experts. Get them involved early to avoid company-killing missteps.
“Nobody builds a significant business by themselves, and I think a lot of early stage companies get derailed because the person who had the original idea can’t share either the responsibility or the equity,” he said.
“Instead of owning a small piece of a bigger pie, they have a whole pie that’s not worth anything.”
Chief financial officer, Binary Group, an information technology services provider.
Past ventures: Co-founder and chief executive of Defywire, a mobile education company; led Riverbed Technologies, a mobile and wireless synchronization company.
Stelfox has ridden two waves in her career.
The tech boom at the turn of the century let Stelfox quickly raise venture capital for Riverbed Technologies, a mobile and wireless synchronization company, and sell the company within 18 months to Aether Systems for nearly $1 billion.
The next wasn’t so kind. Education tech firm Defywire struggled to raise money as the economy began to constrict during the latest economic downturn. She sold Defywire’s assets for less than the $20 million its investors put in.
“The similarities are great teams of people working really hard,” Stelfox said.
But market forces can wield incredible influence over a venture’s vitality. Sometimes you win, sometimes you don’t.
“For entrepreneurs, you always think you can control everything,” she said. “And you can control a lot, but you can’t control everything.”
Co-founder and chief executive, Personal, building a system to allow people to manage their data.
Past ventures: Founder and chief executive of the Map Network, a digital mapping company that sold to Navteq in 2006.
When Shane Green left the digital mapping business at Nokia in 2009 to start a company that protects consumers’ online privacy, several friends told him he was “taking a perfectly good career and flushing it down the toilet.”
But Green wouldn’t be taking the risk alone.
The same team that had helped him build the Map Network several years prior was along for round two. The reunion brought with it the benefits of familiarity as well as unforeseen difficulties, Green said.
“The biggest challenge the second time around is you think you know someone and you think you know their argument in advance and you tend to jump to conclusions,” he said.
“The flip side of that is, boy, do we know how to move fast on things. If my [chief technology officer] comes in and says, ‘I’ve looked at the problem, this is the right answer’ . . . I just know it’s the right answer.”
Contract developer, Comcast.
Past ventures: Founded 2wrongs.com, a search engine that was sold to Cyveillance in 2001; created subsequent search products Dumbfind, Searchles and Twicsy.
Before Google became a verb synonymous with search, Seline was among the entrepreneurs looking to organize the Internet. His first venture sold to Cyveillance in 2001, though the mostly stock deal didn’t generate much return.
With each subsequent search product Seline has looked to grab smaller bites of the World Wide Web, an approach he believes makes for more manageable and successful ventures.
His current product under development, Twicsy, allows users to search through the millions of photos uploaded to Twitter. “It’s a niche that’s bigger than most people think, but it’s still a pretty small niche. We want to conquer that and then expand from there,” he said.
Seline has taken a position as a contract developer with Comcast — his “first real job” — as he hones Twicsy and works to see it take off. Ventures like this take time, he has learned, and often more than you anticipate.
“I always say it will take about three or four times as long as you think, and everyone who I’ve given that piece of advice to says, ‘You’re absolutely right about that.’”
President and chief executive, Pensare Group, a business and management consultancy.
Past ventures: President and chief executive of Galt Associations, which sold to drug safety company Cerner.
Lewis has encouraged women to pursue technology ventures as an instructor in the ACTiVATE program at several local centers and universities. In many ways, her career is a living curriculum.
Among the lessons she has learned: Know when to let go. Lewis shut down one of the eight ventures she has helped run after pouring ample time and money into saving the business.
“I wish we had done it sooner. Hanging on to something that really needed to be shut down was a bad idea. You think about: How much time did we lose? How much money was wasted? And frankly we probably could have sold it when it had more value but we couldn’t let go,” she said.
“There’s a little bit of an ego in that,” Lewis added. “Ego will cause failure more than anything I see, so know when your ego is not serving you.”
Perhaps not mutually exclusive is another lesson Lewis imparts on her students: Passion is critical. “It’s hard to win the race to revenue in the beginning, so you really have to love what you’re doing and believe in what you’re doing. Without passion, perseverance is hard to find, and perseverance is key to success.”