The entrepreneurial journey can be a difficult one, but it’s not impossible with the right tools and support. In this episode of Scaling Success, Volition Capital managing partner Sean Cantwell is joined by Matt Whitteker – a multiple-time entrepreneur with experience at several stages in his career who has faced some unique challenges and shares his lessons learned along the way.
About Matt Whitteker:
As one of Assent’s co-founders, Matt’s entrepreneurial spirit has been a guiding influence since the beginning.
Matt has a passion for developing businesses and is the main driver behind Assent’s incredible growth. He has guest lectured at the University of Ottawa, Carleton University and Queen’s University, sharing his unique insights and experiences, and inspiring the next generation of entrepreneurs. He is also the co-founder of Fight for the Cure, one of the most publicized charity boxing events in the world, which has raised hundreds of thousands of dollars for charity.
Sean Cantwell: Hello, I’m Sean Cantwell, and welcome back to season two of Scaling Success, a podcast geared towards entrepreneurs, where we discuss a range of topics that contribute to building a valuable and long-lasting business. If you’re new to the podcast, please give us a follow on Spotify and YouTube. I am very excited for today’s discussion.
Sean Cantwell: This podcast is geared towards entrepreneurs, and today’s guest is one of the best I know. Matt Whitteker is a multiple-time entrepreneur who I’ve had the pleasure of knowing since Volition led the series A investment in Assent Compliance, where Matt was one of the co-founders. Assent has gone on to achieve great success with a strong foundation of high growth in a meaningful revenue base, and they were successful in raising subsequent financings from Warburg Pincus and Vista Equity.
Sean Cantwell: Matt is now doing it all over again at MILLIONS, which is a social commerce platform connecting athletes and fans. People often ask if entrepreneurs are born, or are they made? We’re going to dive into that topic with Matt as well as a number of different topics, including some of the challenges faced by entrepreneurs at different stages of the entrepreneurial journey. But before we do that, Matt, it would be wonderful if you could provide an introduction on your background to our listeners.
Matt Whitteker: Absolutely. Thanks for having me, Sean. It feels like six years has gone by in six months. Whatever they’re feeding you in Boston and at Volition you don’t age. So that’s cool. I’ve got to move down there. But great to be here, and it’s always fun to connect. My background is untraditional when you think about it, I graduated from the worst, and hopefully, they don’t get mad at me. But at the time anyways, the worst perceived university in Canada was nicknamed Last Chance University, and I graduated with a sociology degree. So nothing to do with business or finance or anything to do with what I’m doing now or computer science.
Matt Whitteker: So when I graduated, I had an idea that I was coaching boxing in university and had an idea that the white-collar community in our city would want to do boxing. That was a popularized trend in New York and some other cities. So I started what was called Final Round boxing with my younger brother and a partner and went down a four-year journey of being a human punching bag by night and learning marketing and sales and finance, sorry, by day and then learning the business by night. After four difficult years, it was the most popular boxing gym in the city, albeit not the most profitable. It’s a small boxing gym in the south end of town, and I emerged with a skill set that I thought was pretty valuable. I could do marketing campaigns, I could build websites, I could do AdWords, Facebook, advertising. I was the first one in our city to do a Groupon. So I learned quite the skill set in terms of sales and marketing.
At the boxing gym we had done some outsourcing. We had hired some people offshore to help with clerical work because I was too busy getting beat up all day, and I had an idea for nonotes.com, so a call recording and transcription company where we would outsource the transcription because friends had told me that it was a dollar a minute for transcription was the going rate and people that we had hired were working for a dollar an hour. So NoNotes was born as a note-taking service for students. It turns out that wasn’t a great idea. But as we were featured in Mashable and featured in some bigger media and got nationwide exposure, everybody started calling and asking for transcription services, and the company started blowing up a bit.
Matt Whitteker: At the same time, and this is a familiar story to you, Sean, my roommate and best friend, was like, “Matt, you just launched a tech company. That’s so cool. Most of what I’m doing in supply chain data management should be automated through software.” We had been drinking and in a cab on the way downtown, and we decided we would, with no funding or experience, start an enterprise SaaS company doing supply chain data management, selling to the world’s most conservative customers, aerospace and defense and big Fortune 500 brands. We worked really hard as you know at Assent for the last 12 years, and that’s become a unicorn.
Matt Whitteker: Then after that, a eureka moment for me was a bunch of athletes that we were friends with, and this goes full circle back to the boxing gym, where we’re trying to sell merchandise online, and they were having a hard time. I would ask them if they knew what Shopify was. 100% of the time they said no. So we set out to solve merchandising and e-commerce for our athlete friends. Then when we looked at the sports tech market as a whole, there was just a huge gap in the market, and we decided to popularize and democratize watch parties. That was popularized by Joe Rogan and the Manning brothers watch parties, so we democratized that.
Matt Whitteker: Then we took video, personalized video workflows that was popularized with Cameo and bundled that into an amazing product for athletes. So, my career went from boxing to charity boxing to NoNotes, to Assent to MILLIONS. So it’s been five businesses. They’ve all somehow gotten over $1 million in revenue. Assent will do $100 million in revenue this year, which is pretty cool. But all five are still in business and still over $1 million in revenue, which I’m super proud of.
Sean Cantwell: I’ve had the great privilege during 20-plus years in this industry to meet a lot of entrepreneurs. When I hear the word entrepreneur, I think of you. I say that because you see opportunity in our listeners. Just heard you share your career journey. But at various points in time you notice something, whether it was transcription services or maybe a gap in the technology being provided around supply chain compliance or the athlete-to-fan experience. You have some combination of guts and foresight and experience that gives you the confidence to take that leap and start a business. My question for you is like, was there a seminal moment in your life when you realized you wanted to be an entrepreneur? Or were these just a series of events where you were letting your instinct guide you down that path?
Matt Whitteker: I don’t think I’ve ever told you this story, but the Canadian version of Walmart is a store called Canadian Tire. When I was in high school, my job was working in a hardware department at Canadian Tire. The main reason I took that job is because I wanted to go on spring break, coincidentally, to Cancun. As I’m working there, I’m working for two years to save up money for this trip. I’ll never forget it because a light bulb moment is like a metaphor, but I was actually stocking light bulbs in the electrical section.
Matt Whitteker: I had an idea as we were going on this trip to get T-shirts printed up, Nepean High School Drinking Team shirts printed. I got 200 of them printed. They sold out the same day, and I made 4,000. That was more than I made in the two years working at Canadian Tire leading up to this trip. I thought like, “Entrepreneurship is awesome.” That was the light bulb moment in the light bulb section of the store that I was working in, where it’s like if you create some leverage, you buy a product, you sell a product, you can make two years’ worth of Canadian Tire wages in literally an hour. It was like, “I think entrepreneurship is cool.
It took a while to go back into it. From there, I was working as a bank teller in university. I was working as a boxing coach. So it took a while to go back. But that was the moment where it was like, “Hey, if you can apply leverage and you can create a product that people want, wow, can you ever accelerate your earning potential?” Who doesn’t want to do that?
Sean Cantwell: Now, when you were in university, was there any part of you that thought you might go down a more traditional career path and go to a career fair and apply for jobs at big employers, or was that experience selling T-shirts during your time at Canadian Tire so impactful that you knew you were going to branch out and do your own thing?
Matt Whitteker: No, there was a bit of a crossroads. So when I was working as a bank teller, I was a terrible bank teller, by the way. I got robbed once and wasn’t a great bank teller. But the people at that, it was a credit union, not even really a bank. But I got promoted a couple of times. So at my peak of my financial career working in a financial institution, I was like a loan auditor. They had offered me a job when I graduated. So it was like an okay job. I like the people. It was not hard. Then there was a bit of room for advancement. So I had to make a choice, do I want to keep just coaching boxing, or do I want to work at a financial institution?
Matt Whitteker: And you’ll probably know this, Sean, having worked with me, the bureaucracy and going slow and just working in a financial institution, I just couldn’t picture myself doing that for… I prefer to get punched in the face, metaphorically and actually. I guess I went and opened the boxing gym. So I think there was a bit of a crossroads looking at, okay, well, there is that opportunity to continue to be a loan auditor, work in finance and then potentially work your way up or hey, just take the plunge into opening a small boxing gym in the south end of Ottawa.
Sean Cantwell: That’s great. Now, I think since you set off on your own personal entrepreneurial journey, I think the stories of entrepreneurs have become more front-page news. I think people coming out of university now might be more aware of entrepreneurship as a career path. Then maybe folks your age were coming out of high school or university. Sometimes it gets glamorized, the idea of being an entrepreneur, but I know and you well know that it’s not all sunshine and rainbows. What do you think are some of the biggest misconceptions of what it means to be an entrepreneur?
Matt Whitteker: I mean, it’s really hard. One misconception is individual entrepreneurs get a lot of spotlight. You’ll have the Steve Jobs or the Elon, and they glamorize the single-person founder. I owe my entire whatever success I’ve achieved to other people. I mean, John Hughes is a co-founder who was the one who came up with the idea. We were literally in the trenches. We shared a seven-by-seven room for the first three years of Assent’s life, driving around North America in rented Honda Civics. So individuals get glamorized a lot in entrepreneurship. Then, as you know, we brought in one. At the time I was coaching them to box. But one I think the best business people I’ve ever met, and I’d argue one of the best business people in the world, and Andrew Whitman, who is our CEO. Individual founders get a lot of spotlight. But it takes a lot of people working really hard, being really ambitious, and having faith in each other to achieve anything.
Matt Whitteker: I think that’s probably the biggest misconception is it’s the individual entrepreneur. I can take very little credit for what I’ve achieved. It’s building an amazing team and working with amazing people, and in my case, John and Andrew on the Assent journey like, oh my God, they’re best friends forever from that journey. Then in MILLIONS, as you’ve invested, we’ve built a great team that’s tirelessly working day in and day out to achieve the mission. While I had the idea and got together some capital to start the company, and maybe I’ll get a disproportionate amount of credit, but I don’t deserve it. It’s the teams that you’re able to assemble and inspire and work with consistently over, in a sense case, ten years before we became, and you know, 12 years before we gave a unicorn. That’s probably the biggest misconception is entrepreneurship is glamorized, but oh man, it takes a big group and a lot of commitment and hard work from a lot of people.
Sean Cantwell: You touched on something there, Matt, that I want to double-click on a little bit. You mentioned the early days of Assent Compliance. You and John and Rob did something that is very unique. I rarely see it, frankly, which is you have a set of founders, each with complementary skill set, all very competent, very successful, all contributing to the success of the business. You made the decision at a fairly early step in the journey, that around that $5 Million revenue mark to bring in a CEO.
Sean Cantwell: Sometimes I think founders have or are challenged with the idea of letting go a little bit and recognizing the importance of the point you just made, which is the team, and each person having a smaller piece of a bigger pie is much better, certainly, than having a bigger piece of a small pie. You guys took the step to go in and recruit Andrew, who was impactful. Talk to me about that thought process that guided that decision but also just more broadly, how you think about team building in those formative stages of a company. You’re going through it all over again at MILLIONS.
Matt Whitteker: Yep. I think the perfect lens and the perfect metaphor for a company is a professional sports team. When you think about your role and your position and your strength, in our situation with Assent, we were able to recruit Wayne Gretzky on our team. Even if I was playing center and was okay with it, and you can get Wayne Gretzky on your team or you can get LeBron to be on your team, you get the best person because you want to win the championship. So to me, it was a no-brainer if you can get better players than you. Hey, sure. Go on second strength. Let them dunk all day or let them score goals, and it elevates the entire team. So when you use a sports team metaphor, it makes everything really simple. What’s the best player? Who’s the best player we can get for the salary cap that we have at that time in the place? Because sometimes you can’t get LeBron. He’s happy where he is. He’s not a free agent. Sometimes you can’t afford him.
Matt Whitteker: But the stars aligned with Andrew and that he was available. He had just left the company he’d grown from $2-$50 million in revenue. He didn’t want to go back to venture capital, of which he was one of the most successful Canada’s ever had. So it’s like, “Hey, we can get LeBron James to be on our basketball team.” Yeah, yeah. I’ll take any other position, whatever. Just let’s get him in. I think for any founder and any entrepreneur, if winning is what you want, if you want to win the championship, you just use the sports team metaphor, get the best players in the salary cap that you can afford at the time that they’re available, and it makes all the other decision making easy. What’s better than winning the championship? You don’t need to be the center. Winning the championship is what you’re there for.
Sean Cantwell: I had a business school Professor, Matt, who gave this quote, and I’ve used it before. But he says like, “Founders fall into two camps. They either want to be king, or they want to be rich.” If you want to be rich, you’re going to be perfectly aligned with that founder as an investor because they’re going to act in the interest of shareholder value. Sometimes there are founders who want to be king, and perhaps they’re reluctant to let go of control. That can introduce some challenges along the way. There’s been multiple times in your career, Matt, where you’ve seen an opportunity. You’ve, I’m sure, created a list, pros, cons. Should I go after this opportunity? I’m sure you have some folks close to you who you bounce ideas off of.
Sean Cantwell: I’m sure there are many times you’ve had conversations with folks where they’ve said, “You’re crazy. What are you talking about? I can come up with 100 reasons why this isn’t going to work.” And I think a common thread that I see among successful entrepreneurs is that they can counter that by coming up with 100 reasons why it will succeed. Yeah. You don’t know all the answers on how you’re going to figure it out. But talk to me a little bit about those early days when you’re venturing out on a new journey, and you’re trying to figure it out, and there’s a lot of people that are saying, “Gosh, this is impossible, or this is a dumb idea, or there’s 100 reasons why it’s not going to succeed.” How do you maintain the conviction to keep going and have that confidence to push ahead and persevere?
Matt Whitteker: Well, my background is unique, and then I’ll give how I would coach other people. My background was unique because the downside was never really that bad. If Assent didn’t succeed. I could go back to coaching boxing. Well, I wasn’t thrilled about it. Being a human punching bag for another five years, I could have done it. It wasn’t a bad life. So taking that plunge into the Assent journey, there was downside and embarrassment and obviously declaring bankruptcy. Nobody ever wants to do it. But the downside wasn’t homelessness. I’d go back to teach boxing. So at that level, when you look at the asymmetry, you can potentially found a company that’s worth $1 billion as your upside, and your downside is, yeah, you might have to coach boxing a little bit more. It didn’t seem like it was that asymmetric.
On MILLIONS, I’m super fortunate because of the previous success that I’m in a position where, along with you guys, we could co-invest and help fund that company. So the downside is I would be self-funding if it doesn’t work out for longer than it’s comfortable, and hey, that’s fine. So I’ve been in a unique position to be able to protect for downside with so much upset. That’s what everybody should be looking for in their life. Where can I put myself in a situation that’s super asymmetric? The downside might be a little embarrassing, but the upside is exponential. So for people listening and thinking like, “Maybe I should be an entrepreneur, or maybe I should jump from my current company and try to do my own,” it’s one of those calculations you have to make where you’ve got to understand your burn and how to not potentially go homeless.
Matt Whitteker: But after that, the asymmetry in entrepreneurship, especially in tech where the play is just so big. If you hit it, your grandkids may never have to work again. Whereas your downside is, yeah, you might be a little embarrassed, and you have to go back to your project manager job or your product manager job, or in my case, being a boxing coach. That’s the lens that I’ve looked through the world is, where can we make big asymmetric bets where the downside isn’t even that bad?
Sean Cantwell: What is the process you’ve gone through? You walked us through a little bit of your entrepreneurial journey. The way you present it, it sounds like ideas almost just show up in front of your face, and you have the confidence to take the leap and go after them. But you mentioned a boxing gym. You mentioned transcription services. You mentioned enterprise supply chain compliance for durable goods manufacturers. Now we’re talking about social commerce for fan and athlete engagement. What’s the common thread that cuts through all of those businesses?
Matt Whitteker: The common thread is connecting dots that some people may not look to connect. When you’re looking at everything in your life through an entrepreneurial lens like, how do I solve this problem through applying technology or applying leverage with hiring people in the transcription case or in the Assent case, how do we build a supplier portal where we can get tens of thousands of companies coming to our product and then eventually convert them? When you think about connecting all these dots, it’s one looking at life through the lens of trying to solve problems.
Matt Whitteker: A lot of people have to frame their way of thinking, their lens differently. If you want to look at the world through entrepreneurship, think of it as taking technology on one hand or leverage on the other hand with people and how to apply that more efficiently to problems. When you look at the world that way, you see so many problems to solve, and then it’s just deciding which ones you want to solve. The T-shirt example going all the way back was just so easy.
Matt Whitteker: I’ve got 300 of my friends going on this trip, and there’s no common merch or thread, let’s do that. On the NoNote side, I had just hired somebody making a couple of dollars an hour who you could bill out at a dollar or $2 a minute. It was just so obvious like, “Oh my God, I could apply technology. I could run Facebook advertising,” because Facebook had literally just come out with the ad platform. You could get clicks for a penny in that time if you can believe it. You didn’t need much of a conversion rate to scale NoNotes to a million-dollar company fairly quickly. So it’s just connecting dots. But it’s also a frame of mind. If you’re not looking to solve problems and you’re just thinking about watching football on the weekend or you’re just thinking of your current role and not starting companies, you never connect those dots. So for me, entrepreneurial thinking is connecting dots, how you can apply technology or people or capital and solve problems.
Sean Cantwell: That’s great. That’s also a great setup for my next line of questioning. You might not realize this, Matt, but whenever we have calls, whether it was to talk about Assent Compliance or now MILLIONS, you will often structure the call of like, “Here’s the good, here’s the bad, and here are the puzzles I’m trying to solve.” It’s an extension to your point of connecting dots. But I think it’s a really helpful way to frame a discussion around business building. You’ve seen companies from pure idea phase to well on the way to $100 million of recurring revenue. I think those puzzles you’re trying to solve to unlock value change. So I want to take it in buckets. If you could maybe generalize and simplify for the listeners, in the idea phase, which leads into that trying to find product market fit, what are the puzzles? You can use MILLIONS as an example if you want. What are the puzzles you’re trying to solve in those really formative stages of a business?
Matt Whitteker: Well, one thing I’ll just preface this line or this question with is there’s always so many puzzles at every stage. They’re just different. One misconception that we had early is if we just get to $10 million in revenue, all these problems go away. No, you just get a new set of problems or puzzles, as we call them. Even at $50 million in revenue, it’s like once we get to 50, fundraising will be so easy. We’ll be able to get all the best people, acquisition, no problem. Now, there’s a whole new set of puzzles to solve. So the puzzle stayed the same. They’re just different at every stage.
Matt Whitteker: So when you’re coming up with an idea, it’s all about just figuring out the acquisition channel first. As you’re starting a business, you just have to think from first principles, how am I going to get a lot of customers? For MILLIONS, it was, well, every athlete we bring on to the platform brings fans. Those fans make purchases and bring more eyeballs. Many of those fans are also athletes. So athletes bring fans. Fans bring more athletes, athletes bring more fans. It creates a flywheel, and you’ve seen it in our acquisition numbers. Acquiring athletes as the supply side of the platform has been pretty easy. Athletes, as we know, have loyal fans. So you just have to really find the right athletes. So that was the original puzzle is the supply-demand puzzle on the MILLIONS side.
Matt Whitteker: On the Assent side, it’s more tricky because it was a B2B company selling to large enterprises. We had to do some very scrappy things. We had to set up an office overnight to do an onsite because we didn’t have an office. We had to give away a few licenses of the software to get reference clients. One of those was rival boxing gear gave us a reference, and they use our software. They did a demo. They use it for a couple of days, and then they gave us a reference. Here you had some small boxing manufacturer giving a large aerospace customer reference. But hey, it worked.
Matt Whitteker: So in the early formative days, it’s all about just figuring out how to get customers, and you have to be scrappy, and you have to try a few different things. That puzzle solving is just a chemistry experiment. Try this equation. If it doesn’t work out, try a different chemical and see if you get the reaction that you want. That’s the early days. As you nail that down, then it’s just scaling the team is the biggest puzzle, how to find the right people, get the right people on the chair, build the management systems and then replicate what’s working. Sometimes the early success can be anecdotal, and you need to find super predictable channels to acquire customers and make money. So that’s what I would say for the early days. If you want to [crosstalk]-
Sean Cantwell: Hey Matt, maybe just pause there for a second. Quick reaction. Sometimes my interactions with a company, while there’s text exchanges and phone calls, there’s that formal quarterly board meeting check-in, where you’re getting an update, not just from the CEO, but oftentimes the team. One early indicator for us in the early stages of an investment is just to be able to gauge the amount of progress a company is making in between those quarterly check-ins. One thing I’ll give you credit for is an ability to multitask and get a lot of things accomplished in a short period of time. Do you have any tips on… I’ve never asked you this question, but I am curious because you are very good at multitasking and I think also skilled at prioritizing. Do you have a system to stay organized or maybe even just talk us through your thought process of how you prioritize your activities to make sure that you are continuing to put one foot in front of the other?
Matt Whitteker: One of the disciplines, and again, a lot of what I’ve learned in business has come from John and Andrew and the Assent journey is every Monday at the exact meeting, every function has to present their key puzzles too. So what I’m doing is just a culmination of all the individual functions, presenting their victories, their insights, and their puzzles. Then you prioritize in terms of, what are the hot issues at hand. So solve those.
Matt Whitteker: Then at the same time, you have to both juggle the near-term fires and then the long-term goals and projects. At the end of the day, if you’re solving your near-term issues and everything is continually getting better, you’re on the right track. Then if not, it’s just dive deep where those individual problems come out. So the system is over-communication and looking at every metric. So to use a cockpit dashboard. You’re looking at your plane instruments. You’re making sure that your altitude and your gas and your fuel and oxygen are all in balance. If not, you dive deep really quick into those items. So one kind of early example in the Assent phase, you’ll remember we had the pool house, Sean.
Matt Whitteker: For people listening, we decided it was irrational to get office space. So we bought this mansion with a big pool, and we were running the company out of there. It turns out that wasn’t a great idea. I wouldn’t suggest it. But in the pool house, we had this whiteboard. Customer acquisition because of a new compliance regulation that had passed went parabolic. We had this huge wall, and we were writing down all the company names that had to be set up. But we literally didn’t have a mechanism or customer success to manage these customers after they were live.
Matt Whitteker: That’s one of those moments where you have to look at your business. You have to look at where the fires are and then firefight. At that point, that’s when we brought in Andrew. We raised some debt, and we built out the customer success organization. You’ll remember we brought in JF, and he helped scale that. So that’s just an example early on of looking at your company, looking where the major issues were, and in our case, it was onboarding and customer success and then taking the steps to course correct. Customer acquisition is great, but if we would have lost all those clients, we wouldn’t be here today.
Sean Cantwell: Matt, you and I know each other because you and the team at Assent decided to raise capital.
Matt Whitteker: Yeah.
Sean Cantwell: Most entrepreneurs out there, one of the puzzles they’re trying to solve is the capitalization of the business and whether they should raise money, whether they should go it alone. If they choose to raise money, when? How much? How have you thought through that dynamic and navigated that set of decisions?
Matt Whitteker: Well, as you know, on the Assent story, we went six years bootstrapped or call it five and a half because like I said, we did a small debt round. But it was six years of living invoice to invoice, fighting with the bank to give you a bigger line of credit. Well, you’re running the business profitably. You leave a lot of opportunity on the table if you’ve really established product market fit. I’ll never forget the conversation, and it was Andrew that sparked it. He said, “Matt, if I gave you $1 million with all the webinars that you’re doing, all the content marketing you’re doing, all the conversations we’re having with suppliers, if our customer acquisition cost is $20K, if I give you a million, can you just go acquire 50 more customers?” And the answer was like, “Yeah, of course. I have complete confidence.”
Matt Whitteker: So, then the question is, “Well, why aren’t we raising?” Then the answer was, “We should.” That’s how we decided to raise money. So to me, as soon as something as soon as customer acquisition, lifetime value, those key SaaS metrics start to look predictable and formulaic, and you have conviction that if you put a dollar in, you can get a dollar out. Then there’s your lifetime value. So you’re probably getting put it all around and get $10 out. Then my bias or my advice to anybody is raise immediately and raise a decent amount so you can prove out that hypothesis. So I think we waited a little too long, but it’s because we’re inexperienced. We don’t know what the hell we were doing.
Sean Cantwell: Yeah. Sometimes, though, that force discipline of being bootstrapped and having to be capital efficient and needing customer revenue to fund growth, it instills some really good business practices that sets you up for success when you bring in the capital. Because sometimes when you have all this capital, I’m sure you’ve seen it, you’ve lived it, right? Your employees know you’ve raised money. All of a sudden everyone’s asking for more budget to do this than the other thing. Then I guess that introduces a new set of challenges that you need to solve, and you need to manage that dynamic. Going back to the question, Matt, just about puzzles and how they evolve. Another common thing you’ll hear is, “Hey, he or she is a big company person. Or he or she is a startup person.” Do you think that’s true that people fall into one bucket or the other? Or how do you manage that path? Because you’ve seen it. You’ve been a small company startup person, and you’ve been part of an executive team of an established mature market-leading business.
Matt Whitteker: Yeah. So I wouldn’t broad-stroke anybody based on where they’ve come from because you could have worked at Microsoft, but you can be super entrepreneurial, are super hard working, want to roll up your sleeves and just hustle and kill it. We’ve had missteps. We brought in somebody, I think it was IBM, and it was just they were used to a certain rhythm. A rhythm in a big company is you sit at your desk, and you just get flooded. Imagine you work at Microsoft or you work at Oracle. You just get inbound all day, and you just get comfortable responding to inbound. Ben Horowitz talks about this and the hard thing about hard things. There’s a certain rhythm in really big kind of Fortune 500 enterprise companies.
Matt Whitteker: In a startup, everybody’s so busy that you don’t get inbound. You’ve got to go outbound for everything. You’ve got to book your own meetings. You’ve got to move ahead your product management agenda. You’ve got to move ahead. You’ve got to build your own AdWords campaigns. You’ve got to write copy. The conversation you need to have with the executive coming in is just being ultra clear on what the rhythm is in the company you’re going to, for whatever phase it’s at.
Matt Whitteker: Right now, if you started working at Assent, there would be a fair amount of support. You would have copyrighting teams. If you were working in marketing, you would have graphic design teams. You would have a lot of help and support if you were in sales. There’s sales engineers. There’s two weeks of classroom training. There’s shadowing of senior executives. That’s a lot of support. If you’re coming from a bigger company going into that, you’ll probably be successful. If you go back to Assent circa 2016 and you’re a sales rep, it’s like, “Here’s the deck. I can, I can spend a couple of hours with you. Feel free to shadow John Hughes, and hey, let’s hit our quota.”
Matt Whitteker: So I think for the executive coming in, it just has to be you have to be ultra clear about stage and rhythm and expectations. If they sign up for that, then they can be super successful. It’s just when you get a mismatch of the rhythm of a big company versus a small company and the unwillingness to kind of take that step back. It doesn’t work out. Both have happened in my career, both at MILLIONS and Assent where it’s just a mismatch of rhythm.
Sean Cantwell: Are there any generalizations you can make? A lot of entrepreneurs out there, one of the key puzzles they’re trying to solve is building out their team. I know a lot of entrepreneurs, maybe they get to that stage where they can afford to pay someone who worked at Salesforce, for the first time ever or Oracle. You can be romanced by that. At the same time, maybe they’re not the right fit because their rhythm of work is a little bit different. How do you profile executives at those formative early stages of a business which you’re in now? What are the attributes you’re looking for in an executive team member? Is there a certain type of profile that you’ve had success with?
Matt Whitteker: You need the the entrepreneurial gene in those early executives. Your Salesforce metaphor is a perfect one. You hire a VP of sales, but he’s used to having sales engineers. He’s used to having marketing do all his collateral, all his messaging, and it’s just wrong rhythm. So the checklist that you would look for, and there’s a great book. It’s called The Sales Acceleration Formula. It’s Marc Auberge. I think he was the first VP of sales at HubSpot. He talks about exactly those profiles. The key kind of early executives, you just want entrepreneurial, risk-averse, and willing to roll up their sleeves. You can screen for that with some basic questions. Talk to me about in your last company when it was just you and you had to critical think and solve problems. You can make a matrix and score people on just Google what questions to ask people about how they were entrepreneurial, and you’ll find a bunch of them. Then you just have to distill those for your company.
Matt Whitteker: For us, it would be like, tell me about overcoming adversity. Tell me about when you had to do the sales deck and you had to do your own kind of appointment setting. You had to go out and prospect. If the person can’t answer that, if it’s like, “No, other people did that for me,” well, you can really figure out if they’re right for the context of the company and the size and the scale of the company. So it’s really just building that profile for the time and the place and the activities that the executive is going to have to do and screening for them, doing reference checks and then just looking each other square in the face and being like, “This is the stage that we’re at. Are you excited about the opportunity to come in and really kill it in that role?”
Matt Whitteker: That’s the best way I found. Obviously, there’s no silver bullet here. It’s a lot of lead bullets. Just sometimes you go through a few executives. What I will say is one thing that I may regret is if it’s not working, typically leopards don’t change their spots. If it’s not working after a fairly quick interval, it may be better for both people just to part ways. We’ve led a few people in, and you’ll know in our last adventure, there’s been people that have probably stayed around a quarter or six months too long where it was like, “It’s just not working.”
Sean Cantwell: What are some other lessons learned along the way? You’re still a young guy, and you got a lot ahead of you. But you’ve started a few businesses. You got some battle scars. What are some of those biggest lessons learned that you would pass along to aspiring entrepreneurs?
Matt Whitteker: Again, there’s lessons at every stage, Sean. It’s like the early lessons when you’re getting started are just hyper co-founder alignment. John and I, who had started a set with, and Andrew, they’re my best friends. John and I are best friends for 20 years. I think between John and Andrew, over the decade that we’ve worked together, we’ve maybe had like two disagreements. I wouldn’t even call them arguments, where we all got a little flustered. So in the early days, I think what blows companies up the most is founders end up fighting. They’re misaligned on spending. They’re misaligned on who’s going to do what. So I think in the early days, it’s just founder alignment. As the company gets bigger-
Sean Cantwell: Matt, maybe just pause there for a second. Stick with Assent for a second. Is there anything you actively did to drive alignment, or is it just happenstance that you, John and Andrew all got along really well, respected each other, brought respective strengths to the point where there wasn’t a lot of conflict introduced into the equation? Or were you just really good at dealing with conflict?
Matt Whitteker: It’s funny. I can’t answer that well, aside from it just never happened. I think we respected each other. I looked up to Andrew as one of the smartest people ever, but Andrew knew that I was his boxing coach, and if we had to go a couple of rounds, I was going to win that round. So it was we had just a great mutual respect. John and I were best friends, and I think first and foremost, we really cherished our friendship. We had some difficult conversations, but again, never a fight, or it was just… I’m so grateful for the way that we were able to work together. I think that just mutual respect and complementary strengths. Then again, going back to the sports team metaphor, none of us wanted to be king. We all wanted to be rich. So to use the quote that you mentioned. So once the goal’s in mind, it’s like, Hey, give Andrew the ball, let him dunk. We’re fine winning the pennant. I’m fine playing. I’m fine playing any position.”
Sean Cantwell: Yeah. Good. I cut you off. I think you were going somewhere else when I asked about lessons learned, and you talked about founder alignment.
Matt Whitteker: Founder alignment in the early days. Then as you check that box and everybody gets in their lane, again, it was a non-issue for us. Then it was just the three legs to that stool are the funding. We were self-funded for a while, then you came in as our first investor, which really helped accelerate. The critical part there is just bringing the right people into the tent. We already talked about that, how do you bring the right people into the tent? Well, you get very, very specific with your job descriptions. When you’re interviewing people, you do three or four interviews so that they can meet the rest of the team. You’re just very deliberate and focused in who you’re hiring.
Matt Whitteker: Then, I guess that probably goes for investor alignment as well. I mean, hey, we worked together for six years, and I think the only disagreements we had was, should we take X term sheet or Y term sheet at what time? So I mean, founder investor… Again, I don’t come from this position where I’ve had a bad experience, only a good experience, but I encourage everybody to get hyper-aligned and have a great relationship with their investor as they get into that stage.
Matt Whitteker: I think the reason why we had such a great working relationship is one full transparency. You’re used to 300-page decks now, questions that you could possibly have about the business gets answered, and then it’s like, “Let’s figure out who we’re hiring. Let’s figure out what puzzles we’re solving this quarter. Where do we invest? Where do we build our engineering team?” We had really meaningful discussions at the board. I think that was because we were so transparent, and it was 300-page decks. Literally, you could click on a link and see the sales copy we were using. I think that for any entrepreneurs looking to go down the VC route, just super meaningful, just transparency and treating your investor as a business partner was one of our key mechanisms to keep growing and scaling the way that we did.
Sean Cantwell: I would echo at that point, Matt, for what it’s worth, just to give an investor’s perspective back to an entrepreneur, transparency is always the best path forward. Investors can’t be helpful if you don’t know the reality of the situation. Investors have seen everything. Not every entrepreneurial journey is this perfect linear path up into the right. There are always air pockets you hit along the way, and investors can’t be helpful if they don’t understand those challenges. So I would echo your point to our listeners that I think transparency is always the best policy and nobody likes surprises either.
Matt Whitteker: I think kudos to you. Remember, I think the first maybe two quarters that you invested, it wasn’t necessarily… That’s in a sense, we didn’t necessarily hit a plan. We still did well. But there’s a plan and then there’s well and whatever. Kudos, you obviously kept your cool and so do your partners as you go back and report like, “Hey, we invested in this new company first quarter, and they missed, second quarter, they missed.” But hey, it’s great when you treat your investor like a business partner. You think and work through puzzles and eventually get there. I’m also saying this now, just in case we miss a quarter of a million, so you could be super patient, Sean.
Sean Cantwell: I mean, I guess in that Assent case, I disguised it well as-
Matt Whitteker: Disguised it well.
Sean Cantwell: … my attempt to be the supportive partner. My last question for you, Matt. When an aspiring entrepreneur seeks you out for advice, what do you tell them? Maybe they have a business idea. They’re saying, “Gosh, should I go for it? How do you structure that conversation, and what advice do you give?”
Matt Whitteker: I mean, it’s so circumstance depend on who the person is, what the business is. The generality is to create wealth. This is a Naval Ravikant, who if anybody’s listening, you’ve got to check him out. He’s the smartest guy in the world, I think. You need to create leverage. You need to build a business where you can either hire lots of people, you can create leverage through code or media, and you can apply capital to kind of scale those up. If anybody comes to me with a business where they’re like, “I want to do X.” And you can’t hire a lot of people, so you can’t. If it’s a storefront, you can’t scale to 50 locations, or if it’s tech, and you can’t apply a lot of capital and reach kind of a global audience, my advice is let’s rethink to a business model where you can apply a lot of leverage. That’s how you create a lot of wealth.
Matt Whitteker: In my experience, Assent’s worth well north of $1 billion. That was created through bringing in lots of great engineering talent and go-to market people. When I was at the sales kickoff last week, Sean, you look around, and there’s 200 sales reps and BDRs. All they’re doing all day is trying to generate revenue for the company. That is leverage, that’s scale, and that’s how real wealth is created. My advice to any kind of aspiring entrepreneurs, when you’re looking at the business, you’re about to start, is it a business where you can apply a lot of leverage through people, media, code and apply capital? If not, let’s rethink that, because you can work the same hours in a small boxing gym in the south end of Ottawa. As you are in a supply chain data management company, one will get you beat up every day, day in and day out, and one will create a $1 billion outcome.
Sean Cantwell: Now, the idea of leverage and that concept is an important one. The way you get leverage in our business is you find a really talented entrepreneur, and you keep investing in him over and over again.
Matt Whitteker: Hey, great closing statement.
Sean Cantwell: Yeah. Now, Matt, it’s a pleasure catching up always. Every time we have an opportunity to chat business, it makes me more and more excited to be partnered with you on this next journey with MILLIONS. You shared a lot of really great, thoughtful, insightful comments that I think will be beneficial to our listeners. So thank you so much for taking the time to chat with us.
Matt Whitteker: Love it. Thank you. If anybody listening wants any feedback on raising venture capital or going through the venture capital journey, include my contact in the show notes, Sean. I’d be happy to share any anecdotes or stories or best practices. I’m happy to help anybody listening.
Sean Cantwell: Terrific. Matt, you’re a good man. It’s great catching up. Take care, buddy.
Matt Whitteker: Thank you. Take care.