Entrepreneur Experience: Charles Von Thun, Entrepreneur to Operator

Straight to you from Denver, Colorado, this is Precursa: The Startup Journey. We share the ins and outs of building a tech startup from inception to launch to revenue and beyond. If you’ve ever wondered what building a startup from scratch really looks like, you’re in the right place. With full transparency and honesty, we reveal it all about Precursa on our ride from idea to exit: the wins, the lessons learned and the unexpected twists and turns.

Speaker 1 (00:36):
Hello everybody. And welcome back. This is Precursa: The Startup Journey. And today we are continuing our entrepreneur experience series with Mr. Charles Von Thun. He is a serial entrepreneur, but he is also an investor. So we might throw some investor questions at him too. This episode, he served on the board of directors of only sky through various rounds of funding. But now the CEO of that organization, he started investing as an angel in 2003, and he was the first seed investor in remote lock where he’s now chairman of the board, Charles is very smart. He’s very savvy. And he has a very, very unique talent, which is he knows how to take someone else’s vision and turn it into a real company. So without up further of due, please welcome, Charles.

Speaker 2 (01:25):
I like that last thing you said, <laugh> this, like my first thing I have to tell people is like, I’m like kind of an entrepreneur, but like the taking someone else’s vision to make it happen is

Speaker 1 (01:34):
Well that that’s kind of a unique thing. Yeah. That’s kind of a unique thing. So why don’t you start by telling us a little bit about you and sort of how you, you know, what are you working on today and how did you get to where you are and how’d you become an entrepreneur and investor?

Speaker 2 (01:48):
Well, I think that taking two little snapshots out my past, I joined my first technology company was a company called decision airing. Okay. Which was run by a couple of friends of mine. And they were really ahead of their time on four with their ideas, uh, about this risk analysis product they’d created called crystal ball. And I think by the time I joined the company, uh, a little tired of the effort, it was 12 years into it at that point. Yeah. Which is a long, a long so, and had raised kind of a venture, a series a of the time, which was, you know, a baby seed round. Now it was like, you know, total cabin was less than a million bucks, about three quarter, 750 K. And so that’s kind of the first time I stepped in into a leadership position, kind of said, I was totally on board with the vision.

Speaker 2 (02:37):
Uh, it just required some, some more execution and just someone, someone new to run the thing for a while. And, and we got of the company turned around and, uh, learned a ton of really important lessons doing that, which then fast forward when the opportunity should we say to, to operate only as guide, uh, came around, uh, you know, I had a playbook kind of ready to go, um, that in some ways was not dated, uh, of, you know, stepping into it enterprise that needs some new leadership and, and providing that leadership and, and, uh, and getting going and that’s, you know, gone great. You know, we’ve only sky, uh, it sells, uh, commerce platform to ski areas, uh, primarily with the leading in, with snow school management. And the, of course the pandemic had kind of put the Covo on skiing. And so, which was great cover for us.

Speaker 2 (03:33):
Yeah. We, uh, basically it was a time when the company really needed to retool and reaff and recap capitalize, and we kind of did this under the, under the, uh, excuse of the pandemic and, uh, have now turned around and, and, and brought forward a, an organization that is, that has process, I would say in a lot of different areas from product development, uh, support success. We, we kind of have a playbook for all of the as areas. Um, so that, you know, partners are the ski area partners don’t think this is the first time we’ve done it. <laugh> any of these things and, uh, and have, and have a way to communicate them about the vision of the company going forward and where we’re headed. So, uh, and kind of the lesson, the lesson from the first startup turnaround was all about market focus, right? My, my tagline for the company then was dance with the one that Brun you, uh, cause we were so many different ways you could go, the company reached, had some success, uh, in the market, but there was like, you know, do we do Sigma? Do we do real options? Do we do, um, stuck optimization and just all many, many opportunities, many markets. And so we settle down and, and settled on a market and a product and then had a lot of success there.

Speaker 1 (04:54):
Yeah, it’s, it’s a really good point because I think there’s a lot of times that entrepreneurs, they try to do too much too fast or too much in general. Right. And so what you’re saying sounds to me like pick a market, pick a niche, get really, really good at that and then find a way to expand. Do you think that’s true

Speaker 2 (05:15):
Almost entirely it’s that first step is so difficult, right? Because the, and it’s um, because the, the only sky founder did a really good job of pivoting, right? They, they had an idea about snow school management, great idea. And they said, Hey, let’s do it cloud software. Great. Uh, let’s do it on subscription basis. Eh, <laugh> okay. The subscription basis might not work because there’s not enough capital in the business to sustain the company to work it’s enough, uh, enough of recurring revenue to, to survive. And so at that time, they pivoted to a transaction fee model and, and that was a great decision. And then subsequent decisions weren’t as good because it was more, how do we increase our market size and how do we do more? And, and there just wasn’t enough capital. We didn’t own the current market yet. First of all, we weren’t.

Speaker 2 (06:00):
Yeah. And, and we were going after other markets as well. And I think that, uh, you know, that, and that’s the curse of the entrepreneur personality, right. That on the one hand, like, uh, and, and I’ll talk about a tool I use around this, that if you always are trying to do the, a new thing, cause you think that you need to bring your genius to this new thing at some point the market, like you gotta win something before you go on to do the next new thing. Right. That lesson of like, except that you’ve got a big enough market and, and do it, and then do the next thing is, is that’s that transition from entrepreneur to operator that that has to happen where, you know, recognize when it’s time to stop with innovation and, and start with execution. Yeah. And, um, so that’s, in fact, that’s what I brought to homeless guy entirely by building a team that executes <laugh>. Yeah. Not, uh, not, not, uh, cuz I’m, I’m the best, uh, person to execute anything, but the, uh, building a team that you know, can fill in all these vital, uh, roles that have to happen at the company.

Speaker 1 (07:09):
Yeah. Do you think I get this question sometimes from entrepreneurs that I work with, like, is there a time when a company real is just done or is a company only done when the founder says it’s

Speaker 2 (07:22):
Done? I think a company’s done when the founder says it’s done. Okay. Um, and I’ve terrible personal experience with this <laugh> cause the, uh, and kind of relating back to this, what’s the right market question product, you know, what’s part of the market fit. The company I founded right after leaving decision hearing was based on stuff I’d learned while doing, uh, decision hearing. And it was, it was one of these and you know, and it’s sad that we didn’t know each other then cuz you would, wow. Wow. <laugh> the podcast. Doesn’t pick it up. That’s you slapping me in the face a few times. <laugh> uh, because it was this, oh, I’ve got an idea of how I’m gonna of change the world and I’m gonna make the world do it my way. And yeah, very often that is not the way to success. Um <laugh> cause the world’s like, man, you’re just another guy with an idea, you know, it’s like, and you need some more, um, behind it to, to be successful.

Speaker 2 (08:14):
So we started off with an idea about performance management, corporate performance management, let’s say, or you in the general market of human capital management. And the idea was ahead of its time. But we pivoted. Yeah. Because I wasn’t ashamed to go to my friends and colleagues to anyone else and say, Hey, here’s what I’m doing. What do you think? And you know, we had one, uh, one lady Tracy, I, it was a ran a there’s two Tracy ILOs in Denver. This was the other Tracy I, which she’s uh, Tracy Hendrick, I think. Um, but she was so awesome. Cause she’s like, well, what if, you know, I showed her what we were doing was like, what if you could do this? And then what if you could do this? And then what if, cause that would really help my company out. I was like, all right, we’ll do it.

Speaker 2 (08:55):
So at the end of all, that four years, three, four years after we founded the company, we had instead of a corporate performance management tool, a, a agency practice management tool, she ran up PR and this is basically, and what we had in there was time tracking, budgeting, billing, reporting. It was great. Yeah. And, but to the whole, going back to the question, it’s like, when are you done? And it’s like, yeah, I, I got to a point on that where I was like, I just, I quit believing in myself, look at that with a massive regret. Cause we were almost there, you know? And, and I see other companies that’s space now that are hugely it it. We were there, you know, um, that lesson has continued with me. It’s like, yeah, like you really need to stick. One needs to stick mean decision was 21 years from founding to exit.

Speaker 2 (09:48):
Um, and wow created a very nice exit. And I think, you know, in the BC world, the, the angel investing world, like seven to 10 years is a very real timeframe from a startup to, to the, there are of course stories. Uh, we started it nine months later, we sold it cuz you know, we just had every yeah. Uh, rare, rare, very rare. There was this, uh, Twitter post a couple days ago, uh, Jim Franklin shared it and it was about, you know, it’s like the, you know, was it the founder type and the company to type and four blocks and you know, there’s the top right block was like, you know, the, the, oh the push market and the poll market. And so the poll market and, um, and uh, with a ferocious founder and I was like, yeah, very few. These, you know, and SendGrid had that, right. This, they figured something out and the world beat a out their door. Yep. And they just had to take orders.

Speaker 1 (10:40):
Yeah. But that’s pretty rare. Right. I mean, Mo most people, there’s this myth that we talk about sometimes of the, of the overnight success. Right. Where, you know, it seems like all of a sudden a company’s blown up in the news and everybody’s talking about ’em and they got all this money and now they’re gonna sell and they’ve got, you know, a 500 million or a billion dollar valuation. Everybody’s like, wow, that happened so fast. I wanna do that. And it’s like, yeah, that happened over 10 years. <laugh>, doesn’t seem all that fast. So the people slogging along in it for 10 years

Speaker 2 (11:11):
Prevailed companies before that to get there, uh, two acquisitions, da, da, da. Yeah. There’s the overnight success is rare. And, and I think, yeah, I think this is, you know, putting my investor hat on investors, do entrepreneurs a disservice by really pushing on exit at all, you know, the top way you exit where the time is. Right. You know, the derivative is zero on your growth, right? Yeah. The, uh, which, who the hell know, there’s, there’s a time that’s right. And any undue pressure to exit before that is, is unfair and unwise. Yeah. And, and I think as seed investor, I seed investors play a, a special role in getting companies going, cuz we’re early, it’s like really early, not earliest. Yeah. Earliest or the poor friends and family of the entrepreneurs. <laugh> my sainted mother among them who, uh, yes. Put up with my stuff for a long time that that seed investor coming in be patient have to be patient ideally and, and may, and the, you know, the, on the one hand, not as professional, maybe not as deep pocketed.

Speaker 2 (12:22):
So, you know, a lot of, you know, if you go to a professional investor, they’re there, oh, we’re gonna back you for two or three rounds or whatever, you know, they vestment meal and do one round or two and it be small numbers, but they just, and they do it, I think on as much giving back and, and kind of participating in the process as, oh, this is a, this is my most important asset class. I happen to believe it’s a great asset class. Um, but I think that’s only part of a small part of why people do it.

Speaker 1 (12:50):
Gotcha. So I wanna go back for a second big, because we talked very, very briefly about how you only sky was not your brainchild. You were not the original founder, you were an early investor and you saw a lot of potential in that business. And then you took over as CEO and started, you know, reworking all of the logistics and the execution and everything to make it, that great company that you saw, it could be. What does it take to do that, to take over someone else’s vision or to make someone else’s vision your own? Like what, what does that look like? Cause for me, that sounds like much harder than having your own vision and, and being the champion that you have to be in a startup up for your own vision. Right. Like it seems harder, but I I’m curious, how did that come about and what what’s been your experience?

Speaker 2 (13:42):
My, my first thought that flashed in my head was that Victor Kem commercial about Gillette. You know, I like it so much. I bought the company. I think the, uh, I didn’t buy the company by the way, but, uh, it’s really about some of it. Uh <laugh> um, <laugh>, uh, the key there is having experience with the company as with, you know, the razor blades or, you know, I was a crystal ball user. First of I was a friend of the founders and I was a, and a user of the software and a real believer to this day. The basic idea that, you know, as humans, we’re organically not really wired to understand risk very well. Yeah. Our fight or flight mechanism is far, uh, more advanced than our agreed, I guess <laugh>, um, our, our ability to seize opportunity kind of balance risks. And, and that’s, that was a key part of what we were trying to do at, uh, at decision air, is this kind of understanding risk of really thinking about it.

Speaker 2 (14:39):
Right. So that kind of early familiar familiarity with the product. Yeah. As much as the entrepreneur. Right. Cause the entrepreneur, at some point, like in the case of only I think the entrepreneur was ready to move on. Yeah. And, uh, and, and do a new thing. And, uh, and, and actually had maybe lost faith in his own thing a little bit. Mm. And, and I stepped in at a time when literally no one else was willing to step in. We uh, wow. And, and certainly on the, on the terms I did it, which was, you know, no pay, you get to an best more and a year, it took a year over a year to kind of work out what, you know, my compensation package would be just cause you have to get all these other things sorted out first and that kind of that’s that’s faith. <laugh>, that’s like, that’s yeah. That’s like, you know, being, being willing to really kind of take on that risk, but, and, and again, it’s, I’m, I’m not a vacuum that I was willing to take that risk because I had teammates, uh, that I had brought to the company that were gonna help execute. I had investors and partners of the company, uh, that were right there beside me. Um, and, uh, and made that, all that worthwhile, the, the attorney that I met talking Tori. Awesome. You know? Yeah. Would, would be here without her.

Speaker 1 (15:56):
Yeah. Tori Donovan y’all if you’re operating in the state of Colorado and you don’t know her, you should <laugh>. Yeah.

Speaker 2 (16:03):
CTAC rock, uh, uh, out of, I think Omaha and Arkansas and whatever else, but they, uh, yeah, Tory’s been amazing.

Speaker 1 (16:10):
Yeah. They’re really good at what they do and to is amazing. So what would you say in your opinion, what’s the most important like personality trait or characteristic someone has to have in order to be a successful entrepreneur? Ah,

Speaker 2 (16:25):
That’s such a good question. The re like the resilience piece is huge. The, the part where you can get knocked out a hundred times, get back up, you know, have to do, do the 250 pitches, you know, suffer the, these slings and arrows, uh, of yeah. Outrageous fortune or something, you know, just lots of, you’re gonna take a lot of shots and, you know, this is not, uh, a place for someone with a agile ego. Uh, I think, um, I mean, there’s exceptions to everything, but, uh, sure. That kind of the re because you need the resilience in all modes, right. Is the yeah. Uh, and in selling mode and product development, uh, especially, and fundraising and that, and that thing, that ability to balance, you know, I’m, I’m like kind of lucky I have a product already. So my fundraising process is substantially more straightforward than that for an entrepreneur, they get to sell more vision. Uh, it’s less product <laugh>, but, you know,

Speaker 1 (17:26):
Then, but that can also be harder to sell. Right. I mean, it’s a lot easier to show a P and L with revenue and show a product with customers actually using it. And, you know, your vision is about how you grow. It. That’s a lot easier than, Hey, I have this idea invest in me. <laugh> yeah, totally. Right.

Speaker 2 (17:43):
So you, and that’s it, you’re selling yourself. Right. So it’s so very personal. And so that kind of, uh, and at the same time, there has to be some humility. You gotta walk this line of, listen, listen, listen, take, take the advice you need to take, know what you’re gonna take, know what you’re gonna ignore and, uh, just keep iterating. And I think the, yeah, the, I think the, the hard part of being the entrepreneur is like, it might be easy to get to a few hundred K of revenue, but, you know, then breaking through requires that transition from entrepreneur to operator like we were talking about. And that’s probably the second part part is knowing when, when is the right time to make that transition and, and educate yourself for it. Right? Like, how do you, how do you become an operator? If you’re an entrepreneur?

Speaker 2 (18:32):
A lot of entrepreneurs are like, I mean, have every background in the world, right. From utterly unrelated to what they’re doing, a singer, they, a lady in town who’s a, like, was big deal banker, I guess, and then started a fitness business, as in sounds like, and know that trajectory going yeah. Like personal passion in fitness and, and kind of went that way and, and good for her. And, but it’s like, you don’t know anything about running a fitness business, you know, about business and, and, uh, whatever, you know, as an example. So this, anyway, entrepreneurs can come from anywhere. That’s okay. I think just the resilience piece and the, the self-education piece learning and learning and learning.

Speaker 1 (19:12):
Gotcha. What do you think is the most important lesson that you’ve learned as an entrepreneur?

Speaker 2 (19:17):
Uh, stick with it? I would say, okay. The, uh, I, my biggest regret as an entrepreneur is the, is the one time I didn’t stick with it. That was a big mistake. Um, cause I had the, I had the financial like stick with it. Totally. Yeah. I had the ability to hang some investors we had, it was working and, and what’s funny about that business is we, you know, I stopped operating it in oh nine. It was still generating revenue five years later. Really? Yeah. So, wow. Oops

Speaker 1 (19:48):
<laugh> and, and why did you stop? Did you just lose steam or did you feel like maybe

Speaker 2 (19:55):
Six of going anywhere six years into it at that point? And I, and, and I kind of was like, I just didn’t see how I was gonna get to the next level. And, and some other investment opportunities popped up. I was like, oh, these seem like better ideas. And so I did that instead. And was of those worked out fine. Yeah. And I’m, and I’m not unhappy about it, but I just like the idea that I didn’t invest in myself and, and just continue to believe in my ideas really burns me now. Yeah. Cause I like, do you think some entrepreneurs have like great ideas every day? And I was like, that’s kind of one of my only really good ideas <laugh> so,

Speaker 1 (20:37):
But ideas are also a dime a dozen. Right. I mean, it, it doesn’t, it hardly takes anything to come up with a great idea, but it takes a lot to turn it into something meaningful. Right, right. Yeah. Which, which is why

Speaker 2 (20:51):
Yeah, go ahead. There’s that timing thing. Right. It’s like the idea has to meet the moment has to meet the team and it all comes together and, and something gets created. Right. And that’s like, yeah. So you’re right. The ideas are, are out there in, in abundance. Uh, but the

Speaker 1 (21:05):
Has to be there. Okay. So I’m curious about something you said earlier, which, which was about how investors sometimes do a disservice to the companies they’re investing in by pushing for growth too quickly, or pushing for an exit too quickly. You know, you’ve been on both sides of that equation. How has being an entrepreneur impacted how you view companies that, you know, you’re, you, you’re an angel investor in and, and has it changed anything in how you interact with companies you invest in? Yeah.

Speaker 2 (21:33):
I think the, the patience piece is there as an investor all the way. Mm. You know, as I, as I, as I mature, <laugh> like, uh, I get a lot more patient that, you know, takes, takes time to get everything sorted <affirmative> and it has to be matched, like investors have anxiety and maybe the entrepreneurs do too, that like, there is that moment right. Where it’s like, okay, we’ve got the right product, we’ve got the right market. We really have to execute well. All right. Yeah. And, um, yeah. Uh, and yet, you know, that in that moment, you may, you have as an investor, you probably have to help the entrepreneur. If they, if they’re interested in listening kind of figure out, are we at that moment or not, you know, is it early, do we really have the product market fit? That’s gonna allow us to scale, uh, or not. I think the, uh, and the rest of that is like feeding back to the investor realistic expectations, right. That’s the entrepreneur owes that to is cap table lenders and equity alike. Like, here’s, here’s the real of this business, and this is what we’re trying to do. And, you know, measure me on our execution and you know, this, sometimes stuff happens.

Speaker 1 (22:36):
Yeah. Hmm. So you’ve also been on both sides of sort of the funding table, you know, you’re raising right now for only sky, but you’ve also been an investor in companies in the past. You’ve raised for other companies in the past. Is there some advice or, or some kind of insight that you would give to an entrepreneur who’s like, I’m really trying to raise this money and it’s just not working out, like, am I doing something wrong? Or, you know, like, what would you say to, to someone who might be in that

Speaker 2 (23:04):
Situation? It’s funny. It’s like, I was like, oh, you have to be resilient. You have to try 250 times and da, da, da, but listen. Right. Uh, because it’s like, what are you hearing? Because if Lamar, you hearing the same thing over and over, and it’s not the trite BS you get sometimes like, oh, you haven’t heard hit a certain revenue number or blah, blah, you know, but, and so let’s, let’s condition this in terms of stage. Right. So I think, okay. You know, if we think at the stages kind of self-funded and then kind of friends and family or whatever. So if you’re coming to me, you’re, I’m like your C a one investment go to BC. What I’m looking for is a product. And mm-hmm, <affirmative> somebody that’s not your mom, that’s given you a dollar for that product, a dollar, literally a dollar <laugh>.

Speaker 2 (23:56):
I was like, just someone that you don’t know, parted with their money, for your thing as a prototype, as a beta, as a, um, yep. I really feel validated, uh, by that, because of these of the times I’ve passed on what seemed to be just awesome investments as yet, but they don’t have a prototype or they haven’t sold a thing yet. Like, well, they’re not a business yet, and they’re still in our, and, and it’s just a, a huge divide. It’s, it’s not the chasm, but it’s an important chasm for someone come to me as a seed first seed investment, have a thing, have a dollar and the rest of the second, the second tier of that, which is nice to have, I won’t go on, I that’s it have a, have a thing, have a dollar and be in a space I’m interested in or have any, have the ability to help you with right. The, um, okay, gotcha. Uh, cuz like I don’t, you know, B2C, I can’t, I can’t do anything for you. I’m terrible at it.

Speaker 1 (24:50):
Yeah. Yeah. I totally get that. Okay. So I want to ask you, you know, there, there’s this accepted reality in the world of startups that nine out of 10 in investor back startups ultimately fail. We’ve actually heard from some people reach recently that they’re seeing more like one outta 12, actually succeeds. And you know, obviously how we define success might change that metric. But how much of that is about the entrepreneurs or the ideas themselves? How much about that? Is investors pushing too much? Like how much of like, what do you think about that and how do we start to address it? Because that seems like really poor environment for anyone to be creating anything in, why would

Speaker 2 (25:30):
You ever do that? That’s stupid.

Speaker 1 (25:32):
Why would you ever do that? <laugh> um,

Speaker 2 (25:36):
I, I mean the numbers, I can’t argue with the numbers. I don’t know if that’s, you know, S or, or what, but yeah, but, but what gets in what’s in that number, right? The, is this like the five year number maybe it’s like, you know, starts or it start to make it to an exit that creates a positive return for investors. Exactly. Maybe that’s an number that’s hard. That’s harder for sure. Yeah. I think it’s misleading. I think there’s a lot of stuff that gets started and everyone goes into it saying, huh, this is a flyer. We’ll see what happens. And the, uh, and we’ll get grant on ear, we’ll get, you know, some, a seat, you know, an a, uh, an, a round or whatever and see what happens. And, uh, and then it doesn’t work, but it was, it was an experiment to begin with.

Speaker 2 (26:19):
Right. And it’s science and experiments fail. Um, go turns out this doesn’t react the way we thought it’d react. Right. Oh. But by the way, this other thing happened while we were doing this experiment, let’s go investigate that. So another startup happen. Yeah. <laugh> all right. And I think that, you know, the applying, if you’re a, uh, what would it like seed investment organization, uh, especially like governmental or, or even RBC you’re, you’re taking this massive portfolio view. You’re putting your chips behind a lot of different, uh, companies. I use these crafts as analogy. I like stack at my chips. <laugh> the, uh, but with the idea that some of these are not gonna work out, Hey, we’re gonna commercialize English is the government lab. We’ve got these 10 technologies that we’re gonna try to commercialize. And, you know, they may not be commercializable, but you know, there, somebody’s trying to, and, and, uh, the government to their credit is trying to, trying to take that tech and move it forward.

Speaker 2 (27:18):
And it may or may not work out. And a lot of those are just those become why walking dead. I have to like my, I was holding my arms outta here. You didn’t see my Rabbiters. Um, you know, I think there’s this expression that, yeah, if you don’t create this exit, then you’re walking dead. But like walking dead companies of which I’ve operated level are not the end of the world because people get paid and services get performed and value gets created. It may not be driving to some high growth, high dollar exit the investors. And that’s too bad that, that some positive return to the economy, uh, and to the people participating. So that’s not bad. So it’s like actual failures. I mean, failures. Great. Let’s celebrate failure. Failure is good. Let’s, uh, let’s applaud people who take the plunge, even if it doesn’t work out, because this is how the world gets better. Yeah. I’d say keep experimenting, you know, one, one out. Okay. One out. I think it’s, you know, on the venture worlds, like one out 10 succeed, two outta 10 are like, man, seven are walking dead or, or fail. Yeah.

Speaker 1 (28:15):
That’s okay. Huh. That is such an interesting perspective. Like looking at it as an experiment, right? Yeah. That’s so fascinating. I’m never out of it that way. I love that

Speaker 2 (28:26):
I’m here to help influence in part by, um, I might add a conversation with my, uh, cousin at en REM who is, is running. Um, I mean, basically they’re, they’re backing lots and lots of companies, uh, going forward and running quickly if it’s an incubator accelerator something. Yeah. Uh, but you know, that’s, that’s their, that is their portfolio. That’s their job to kind of push a lot of chips forward and, and see what happens. Right. And, and provide a, a pride, a useful environment where, uh, success happens. But yeah, but is not guaranteed nor should

Speaker 1 (28:58):
It be interesting. Fascinating. Okay. So I have another statistic for you. I want you to tell me what you think about it. Okay. 40 to per percent of startups fail because no one wants what they’re building. Oh

Speaker 2 (29:10):
Yeah. <laugh> totally. This is the, this is sometimes called the, the other, the other, the, the poor usage or the, the unfair usage of science experiment. It’s, uh, uh, what someone has a techno, they don’t have a use for it or a ready market, or it’s not really a product yet. It’s called a science project. Right. And, oh, Hey, look at this cool thing we can do. Let’s build it. Somebody will want it. It’s like, no, uh, it really, it really that’s, you know, that’s kind of the lesson from my first startup from, uh, not my first startup, I guess, from positive wear. It was, we built a whole lot of stuff before we ever put anything in front of a customer, you know, and the, the lesson, Eric Rees and minimum viable product and all that stuff was not quite a thing yet. And so, but there were plenty of people telling us, you know, Hey, you should try to sell this thing before you actually build it.

Speaker 2 (30:08):
Um, yeah. And building was more expensive. And I was thinking about it, like driving. And I was like, uh, I talked to somebody yesterday or so this week who had a, a colo of, of some of their tech, I was like, wow, <laugh>, when’s the last time I hours. You just like, put something up on Amazon or Google cloud. And, and off the infrastructure costs of do minimus. And I was like, yeah, we had to buy servers and co-locate, and, and get, there was a lot less of the supporting, in fact, when we did sale pitches, the sales pitches, we had to explain what cloud software was. So that’s, that’s kind of how early it was. Wow. But, uh, that’s cool. But the point, the point is really not the cloud part, but the sell the thing. Right. And like back to the dollar thing, right. Uh, if you can’t get a dollar for this thing before you build it, maybe you should iterate a bit more before you start spending. Right. It’s like, when you look at any construction project, be it software or a container terminal, you can save a ton of money by putting more into the preliminary engineering <laugh> than cause you ever fix stuff later when you’re pouring concrete or already code it’s, uh, much harder.

Speaker 1 (31:13):
It’s a lot harder. Yeah. So it’s a good, it’s a good point that you make, which is the work that you do before you start building. And this is a really message for a lot of entrepreneurs to hear these days, because they’re like, but it’s so relatively cheap. I can spin up an Amazon server. You know, my cousins, you know, brother-in-law’s, sister’s nephew writes mobile apps. And so why not? Right. But I, you know, and I, I’m curious what your thoughts are about this, but what I often with people is it doesn’t really just stop there before they know it. They’ve put a lot of money into a lot of different areas that you don’t realize start to become important very quickly when you’re that invested already. Right? Yeah.

Speaker 2 (31:57):
It is a, the, the entrepreneur’s most important asset is their time <affirmative>, especially when you’re a team of two or three or a team of one, don’t do it team one, by the way, that’s maybe the first not do, but the, the, the nobody doesn’t alone. Yeah. But, uh, uh, but putting that aside, so your time is this precious, precious asset. And, you know, if you take a marginal minute and spend it on, Hey, you, this pixel will be over here over there when we do this interface versus yeah. Another call to another prospect say, Hey, we think the world could really use this idea of behavioral reinforcement. And they’re like, yeah, no, that’s completely wrong. <laugh> yeah. <laugh> uh, Dan, I dunno if it was Dan or Scott King at ready talk, I got an intro to them back in the early S at PO where, and, uh, I pitched positive where to them they’re running. I can’t remember how big red talk was in hundreds people, I think. And, uh, and I think it was Daniels, like you’re totally wrong. <laugh>

Speaker 1 (33:03):
<laugh>.

Speaker 2 (33:04):
And, and he pointed me to this foot and it was kind of crushing cause we built a lot of software and I really believed him. Yeah. And, and, and, you know, basically there’s the Aubrey Daniel school of, uh, Skinner, uh, psychology and using positive reinforcement to get, get what you want, hence positive wear. Sure. And then there’s what, uh, Al Cohen and punished by rewards. Right. That in fact, and, and then drive comes out later, it’s like, oh, it turns out people are really motivated a lot more by intrinsically. And, um, you know, just kind of setting up this, uh, uh, pellet feeder system is not, is not gonna work. Um, so thanks. Thanks Dan <laugh>,

Speaker 2 (33:49):
Which was part of the pivot for, for positive wear, to move to, uh, kind of this project management agency management space. So yeah, it was margin minutes with the Dan Kings of the world telling in me, Hey, you know, you’re, you’re wrong. It’s like, oh God, that’s awkward. Um, like really important, um, and way more important than the code cuz the rest of it. Like, you know, it is true. You can really reduce the cost of, of, of a prototype now, but like, but you really, but with, uh, was it, um, uh, you use it? I can’t remember. It started like envision is one I, I envision and also envision. Yep. It’s kind of prototyping tools. You really can’t prototype with nothing. Right. Create, we used to call it PowerPoint where just so you can kind of do a click through demo that says, what if it did this and customers go out yeah. Yay. Or a right. And you do a lot of that. Right. Uh, before you find out, um, what they should be building.

Speaker 1 (34:43):
Yeah. How many times do you have to hear know before or hear, Hey, you don’t have anything, not from a customer. You know, obviously if you’re hearing that all the time from a customer, that’s a big clue that you don’t have anything. Right. But how often do you hear that from an investor and you still know there’s something here and you’re just not communicating the vision or like, or is it if you’re just consistently hearing no, you’ve really gotta step back and take a look like what are, what are your thoughts about that?

Speaker 2 (35:11):
I’m not sure I have the right answer for that one. Um

Speaker 1 (35:13):
<laugh> is there a right answer? I don’t even, well, there there’s

Speaker 2 (35:16):
A, it kinda goes back to this entrepreneur’s belief in themselves and yeah. There idea and uh, and how hard they’re gonna work to change the world. Right. And I’m not a change the entire world person and as I’ll change. Yeah. The state <laugh>, you know? Yeah. So, you know, I don’t have that kind of hardheadedness that, you know, I mean the extreme examples are on Musk, but is just like ours. It’s like, wow. Yeah, that’s an extreme, extreme vision. You know, that’s really out there as a visions. And uh, you know, he’s had the, the OPH of, of the strength of his personality to make that, uh, close to a close to a reality now. Um, so, you know, that’s probably being honest with yourself about like how much of a world change are he is like, did you get up every morning and look at yourself, say Charles, I’m gonna change the world today. Yeah. Good. Or are you like, you know, I get bounced around by the currents and uh, you know, my son is a mul and I was telling him just yesterday, I was like, dude, you’re obviously gonna do great stuff because you won’t do anything the world tells you to do, you know, they’ve gotta do it you way. And I was like, yeah, it’s gonna be hard, but you’re gonna do something cool.

Speaker 1 (36:37):
Yep. Yep. Interesting. Okay. Good. All right. So I got, I got, I got a couple of like questions for you, right? Like about you. So what job, other than the one that you do now, other than your own, would you most like to try

Speaker 2 (36:54):
Job? Um, well you, I don’t really think in terms of jobs, so there’s that <laugh>

Speaker 1 (37:03):
Okay. I like

Speaker 2 (37:04):
That. Um, what job would I most like to try? Well, I’ll tell you my first two reactions to that and that’s, so I don’t sit here and have like the beach ball, uh, for a while. Um, is, uh, the first two things came to mind was something political. Oh. And, uh, you know, I’m really, I’m very interested in, uh, public policy, uh, oh, fascinating. An active donor and, and, and board member of, uh, plant parent of the Rocky mountains. That’s a, that causes is near and dear to me. But the, um, the generally the area of, of public policy, probably, I don’t think I’m a good politician, but, uh <laugh> but, you know, but a policy, some kind of policy role would be super interesting. I, a friend of mine’s working in, uh, Europe right now, uh, with the us military doing super cool stuff on the policy side, I was like, oh, I’m jealous. That’s cool. Yeah. So that’s a job air area. Uh,

Speaker 1 (38:01):
How come you never pursued that?

Speaker 2 (38:03):
Well, I do, my, my Twitter handle is ugly American, so I do it every day.

Speaker 1 (38:06):
<laugh> love it. I love it.

Speaker 2 (38:12):
Well, I, I mean, I, I think back on my time on the board of planned parenthood and I was the board chair for two years and I basically took a off of work for those two years, uh, as cause it was, I, I didn’t have to do it the way I did it, but I kind of went all in on, on the wheelchair role and, you know, was side by side with the, uh, uh, CEO of Vicki coward, um, on a lot of stuff and, uh, made a lot of, a lot of progress for the cause in those days.

Speaker 1 (38:39):
That’s really cool. I love that. I love that answer. Okay. What’s one question you wish I had asked you and how would you have answered it?

Speaker 2 (38:51):
So I listened to Scott Galloway a lot and NYU, uh, a stern professor of marketing outspoken, uh, the dog <laugh>, which the laugh, but one of his pieces, really one of the two or three things I can repeat all the time is that, um, your, uh, the most important decision you make as a is partner and, um, you know, pick, pick the right partner or, you know, have the right partner, uh, descend upon you. And then in a, in a shaft of light and everything works out <laugh> um, how Howard happens, um, is, uh, is important. So like, you know, I think the question is like, what role does, like your family, they play in entrepreneurship and investing in anything. Right. So, and I think like my wife’s put up with a lot <laugh> and, uh, and, and God bless her. She’s a, a great partner and I wouldn’t be here without her. So I think, uh, so yeah, I think gal, right. I

Speaker 1 (39:57):
Love that. That’s a great answer. She’ll love that too. <laugh> all right. So last question. What are, do you have like three podcasts or books or resources of some kind that either someone who is an entrepreneur or wants to be an entrepreneur, or maybe someone who’s been thinking about investing in someone that they know, you know, maybe getting into angel and investing or, or that kind of thing, any resources you’d recommend for people?

Speaker 2 (40:22):
So I have a few go to resources all the time. Um, I think for hiring, um, which is maybe the most important thing you do as an executive. Yeah. You know, build that team. And, uh, for success, I use a tool called the Colby, which is a, uh, assessment of working style. Um, okay. And I mostly use it to understand who the person is as we’re talk, you know, once we’ve talked to ’em partially, sometimes it’ll smoke out, uh, yeah. Colby doesn’t line up with how you interviewed. So you’re, you know, you’re kind of doing, doing a bamboo, or it does tell us who the person is and they, everybody, it takes, it gets great insight from, it says, okay. So when we work with you, this is where you’ll need support. This is where you’re gonna apply leadership and good, good to know nobody fails at col, uh, pretty much.

Speaker 2 (41:14):
Um, uh, but, uh, so that’s, that’s a huge tool. Um, and they, uh, I still go back to art of the start 20 plus years later, as a great guy to pitching and, uh, the outlines of the pitch. Um, you can always make it better, you know, tell a better story, da da, but like here’s bang, bang, bang, here’s 10 slides you need and why. And, uh, yeah, that’s, uh, crucial, um, as an investor, um, you know, if I, to reducing it to a couple of things, one is if I had to read a book, you know, a Warren buffet biography talking about his, uh, investment philosophy, which, oh, I love that, which kind of, and it backs, um, everyone’s guy’s name not gonna count. I mean, I’ll send it to you later. There was a, a guy I met through a lunch club who is now a professor of finance in Hong Kong.

Speaker 2 (42:08):
And his basic idea was as a, as a retail invest, you can’t beat the market. Right? So the idea is invest, you know, his best philosophy is like, is kinda like John Bole invest in, uh, uh, low cost index or, uh, ETFs and buy the entire market. And the only way, the only time you beat the market is when you have extra information, you know, when asymmetrical and that happens, uh, like in angel investing, when, you know, I’m in, I know more about the company than the market does yet. And if I’m patient and it all bears out, I get a, uh, above average return, uh, that is born out. I have a, I’m very pleased with my record as investor. Um, I think that’s true that you invest in the things you, which is the Warren buffet thing, investing what know, and, uh, invest a lot and, uh, and get things happen.

Speaker 2 (43:01):
And so was kind of how I end up at homeless guy where it’s B2B software skiing, turnaround, all stuff I can spell and, uh, things go well. So, so read a buffet. The other thing is an angel investor, um, shout out to, uh, Rocky’s venture club is the most I ever learn as an investor is sitting in an investor forum after six presentations, after all these pensions have gone by cuz the conversations that happen in that room, just investors are, are kind usually. Yeah, almost always. Yeah. Um, first of all, you know, very cuz most of the people in that room have been entrepreneurs have, have done it all and, and know what it’s like, right? So they’re not there to like just beat up the, the entrepreneurs, not in the room, but they’re not there to beat up the entrepreneur or the idea whatever’s like handed appraisal of, of the idea of the entrepreneur or the team of whatever timing, whatever it is. And that like listening to that stuff, uh, is, and it’s is, is awesome. It’s like that’s, it’s a graduate class and, and angel investing the rest of the stuff that ROC has is really good too. Like just kind of like, you know, how does the term sheet work? And what’s the cap that, you know, again, the old RBC didn’t do that. And you know, the first investments I made were, were reckless <laugh> as a result and uh, have gotten a lot better sense. Yeah. For those who don’t

Speaker 1 (44:31):
Know, Rocky’s venture club is the oldest venture club in the country they’ve been around since 1980 or 81, something like that. And they are based here in Denver and the team. And like all the investors are amazing people. The team that runs that company are amazing people, the guy who’s, I, I don’t even know what Peter’s title is, but managing director or whatever. He, I mean, he just, he’s got great vision and it comes out in how they treat entrepreneurs and how they invest and how active they are in the community. And, and I would echo Charles, it’s a great organization. If you’re thinking about being an investor, that’s something that’s interesting. It’s a great organization to get involved with to give you a really good understanding of what does that really mean and how do I do that in a way that won’t make you crazy <laugh> cause you certainly can go crazy as, as an investor investing in other people’s companies. And then, you know, that patient’s thing, right. That, that can be really hard. And it is a lot easier when you’ve got other people who are, who are there with you, who, what they’re doing, they can kind of talk you off the ledge every now and then <laugh>

Speaker 2 (45:36):
Right. For right. Can I, as a specific example and I’m like, fingers crossed have to like get close. My, the, uh, RBC has been a, uh, a lead investor in pharma jet, which is okay, which is a needleless, uh, injection technology for vaccines and whatever you need to inject it. I don’t know if you it’s mostly vaccines. And I invest in it first in 2017 and I think the disservice pharma jet was doing to the community at the time was saying, oh, we’re gonna go IPO in 18 months in that’s. Okay. That’s the message I got, they had almost no revenue as in terms of being a medical device equipment. They had very little, very little revenue and yeah. Um, and so maybe they shouldn’t have been saying that, but whatever, uh, cause they’re, I don’t, they’re like on series H or something of, of their funder, I’ve kind of lost track, but the more important point is they’ve stuck with it.

Speaker 2 (46:28):
Right. So now it’s four years later and, and, and Zco was like the big thing at the I 20 17, 20 18 is like, oh, well. And, and they stuff worked with Zika that whatever didn’t, uh, it didn’t cause the, uh, the, uh, stars to align for farm at that time. But now of course COVID OS come along and the needed to vaccinate literally the entire world. Yeah. You know, nothing better for that. They, I need a less injector. And so they’ve, you know, just been plugging away Heather and, and company and, and Ron and, uh, and just kind of plugging and plugging. And now I think they’re, um, they’re doing much better and, uh, having some legit revenue and, uh, legit, uh, uses of, uh, technology and, uh, COVID vaccinations and yeah. So they stuck. That’s awesome. Whatever. Yeah.

Speaker 1 (47:17):
Yeah. Again, that’s that resilience. Yeah.

Speaker 2 (47:20):
It was actually the point was BC talking off the legs, there was like calm down. <laugh> I was like,

Speaker 1 (47:26):
<laugh> just because, just because they’re crazy entrepreneurs telling you something doesn’t mean it’s true. Yeah.

Speaker 2 (47:31):
Just the, uh, yeah. These just patience. Yeah. Very warranted in

Speaker 1 (47:36):
That case. Yeah. That’s awesome. Charles, thank you so very much for taking the time for being such a, a generous guest with our audience. If anybody would have questions or they wanted to get in touch with you or follow you, what’s the best way for them to do that? LinkedIn,

Speaker 2 (47:50):
The Twitter. Perfect. Uh, probably two, two good places. Perfect.

Speaker 1 (47:55):
Perfect. So we’ll, we’ll make sure in the show notes that we include your LinkedIn, we’ll also include your Twitter handle so that people can follow you. And, uh, we very much appreciate you being here with us today. Oh, I appreciate the opportunity. You,

Speaker 2 (48:06):
I really appreciate it.

Speaker 1 (48:07):
Thank you. Yeah. Thank you. All right, everybody. Thank you for joining us for this episode as always happy entrepreneur, and I will see y’all next time. Thank you for listening to this episode of Precursa: The Startup Journey. If you have an idea for a startup and you want to explore the proven process of turning your idea into a viable business, check us out at precursa.com. Make sure to subscribe to this podcast wherever you listen to podcasts, so you never miss an episode. Until next time.