Vision with perseverance
CEO, Startup Whisperer, Lacrosse Coach
There are many low points when you are building a business. You need willpower and vision.
The media loves overnight success stories, but they only represent a fraction of your options.
Startups and technology companies are about steam power, perseverance, and grinding it out.
Lesson: Zero to IPO with George Northup
Step #1 Success: Vision with perseverance
I built four companies that were venture backed. These companies have generated more than $2 billion of revenue since inception. I've raised $500 million of capital during this period. I have a lot of scar tissue on my body and I used to have a lot more hair, so that's the main thing I would say.
A good friend of mine founded a very successful company that was founded in the early 2000s. Their first funding was on September 11, 2001. It was a Series A funding, although everyone in the company they were successfully sold to Google for several $100 million and one of their top buys over time. Everyone was congratulating him on the outcome, and he remarked me, "Yeah, George, it was an eight year overnight success."
That kind of is a metaphor for me. The main thing I would say about building these four companies is that there are so many ups and downs in building companies. There are many low points, and there are also high points. Really the path success is really by determination, and by will, and by vision and just hard work. It's about staying power. If you look around Silicon Valley, we do see overnight successes and there are some fantastic companies whether it be Uber, Airbnb, Twitter or things like these. However, I think what's lost to the media sometimes is that a lot of these companies that seemed to be overnight successes are really the exception and we keep on hearing about Unicorns, and these are maybe a top 1% or something like that that were done overnight.
In the meantime, there are a tremendous number of companies that have made it and been successful, but they were built kind of the old-fashion way which is somebody had a vision and a strategy and he persevered over years and years to build that company. We see companies like for example Intuit, which is a multi-billion dollar company. It was founded and very steadily built over a number of years.
If I go back to my experiences typically in these companies, my average span has been about five years from start to finish. I've gone from zero all the way to an IPO, but this one company I took public in 1999, Online Resources, was one of the first Internet banking companies out there. Today it serves 15% of U.S households, something like 37 of the top 50 banks, and processes several 100 billions of payments a year.
However, when I first went to the company it had been around for six years. It essentially had zero revenues, and it also had 60 days of cash left on their balance. So over a four or five-year period we continually raised money, and we went out there to pitch the banking industry, which was still a little cautious and skeptical of the security aspects of online banking, and we took that all the way to an IPO. But there were many times during this process, where we had major technical failures and customer problems. We had staffing issues. There were many what I would call just-in-time fundings. And a just-in-time funding was where we had a payroll on a Monday and close up financing around on a Friday. Throughout this period I was holding off vendors who were battering at the front door, trying to getting in and get their money.
We traveled on a shoestring basically. So I remember we were based in Washington, and we would always take the Amtrak train up to New York, and spend two to three days in New York meeting with investment banks and possible investors. We would do things like, I would schedule meetings at all the meal times, so that whoever we met would cater the lunch or breakfast or whatever, so we would get free meals. Another thing I would do is I would ask the investment banker to send one of their limousine services to give us a ride to pick them up and to take us to their offices. Then we would keep the car without telling them for the day.
The other thing we used to do was we used to stay at the Harvard Pub in New York and have these tiny little rooms without bathrooms and you share them. So for almost five years I shared a room with a CEO in a tiny little room, and I remember one time I had bronchitis. We lived on almost nothing, and just kind of scraped it out. But we kept on building the business and overcoming the obstacles as they came up.
It felt hopeless at times and yet something good would happen, and then we started getting clients and then we were taken public by JP Morgan. Which was a highlight for us. There other thing is, unlike most of the IPOs at the time the company endured, it recently acquired but still services much of the U.S. households. But going back to my overall statement, I think startups and technology companies, it would be nice you were lucky and it really got very successful.
Some people have said this about themselves, "I'd rather be lucky than smart." I certainly would rather be lucky and smart. But the startup world is about persistence and steam power and grinding it out, and then maybe selectively doing a pivot. Not automatically doing a pivot. I think that's the biggest thing that sometimes we miss in the media today, which is that we see some many success stories but they represent a very tiny fraction of the outcomes. There are some brilliant entrepreneurs who from day one had a brilliant vision, and kind of the vision to see it through. But there were a lot of companies that had been successful over the years, because they just stuck with it and built the company.