In this episode we chat with two time entrepreneur Paul Schneider. Paul and his co-founder have bootstrapped two different software businesses (The Isadore Group and Socious) to a successful sale. Typically, when we hear of someone selling a software business, or any business for that matter, we think that person must have developed a super unique product or service, or that person got lucky by being at the right place at the right time, or that person had all the right connections.
As you’ll hear from Paul, what’s made him successful is his mindset and belief in “making it happen”. What propelled him early on in his career, was realizing he could manufacture winning the lottery…that is…through business.
Paul also shares with us other aspects to what has made him successful including finding the right business partner, listening to customers, and evolving his sales strategy.
Thanks for joining us and we hope you enjoy the show.
RJ: Paul, you’ve been successful in bootstrapping two businesses now and growing them until a successful exit. Both companies you’ve built together with the same co-founder, can you tell us about what each of those companies did?
Paul: Sure, thanks, RJ. So the first company that we had started was called the Isidore Group and that actually was a PeopleSoft consulting company in the higher ed market. So we would go into higher ed institutions and we would basically install the PeopleSoft product but pretty much the products that were only specific for the higher education market. And then we started a pure play software company called Socius and we got into the online community space and ran that for about, I’d say 14 or so years.
What made you want to start a business in the first place, were you an entrepreneur at heart or did you show signs of it from an early age?
I mean I always was interested in starting my own company. I remember that I’d started a dog training like CD-ROM, yeah, just always kind of interested in dabbling in it. But the one thing that always stuck in my head is people talked about the lottery; they talked about winning the lottery. And nobody’s ever going to win the lottery, but to me it was like, well, what if you could make so you’d just win the lottery, what if you could manufacture that? And that’s how I looked at starting a business is that if you run it and you run it well and ultimately if you exit, it will seem like you won the lottery. And so that always kind of attracted me to it as well, that I could actually manufacture that experience by starting a company.
What do you think were the key aspects to working with your co-founder that made you both successful?
Probably two main things, I mean the first thing would be trust. I think if you enter into any type of relationship like that, you always hear stories of how business partners go bad. He and I actually started out as friends, we wound up being family because my wife and I had introduced her sister to him and so he became my brother-in-law. But even outside of that there was just a lot of trust there, you understand that he’s looking out for the best interest of the business as well as for you and certainly likewise, I was doing it for him. And so there was never that issue of is he doing something he shouldn’t, we both were marching in the same direction and both really trusted each other as to what we were doing. The other thing is that we were just both very complimentary to each other. I am definitely not the numbers guy and Scott, my former business partner certainly was. So he handled the operations side, he handled the software side of things where I handled more of the sales and marketing. And it was a marriage made in heaven twice because, you know, it just really worked out, the fact that, I didn’t step on his toes, he didn’t step on my toes and we just both complemented each over very, very well.
And it seems you’ve been a natural at sales from the get go, is that true or did you have to work at it and develop strategies along the way?
I guess people sometimes have the gift of gab and they can speak to people and people tend to gravitate towards them and maybe I had a little bit of that. But sales is definitely something that you learn, tactics that you can do. I always equate it to golf is that you’re never going to have the perfect golf game. A lot of times you have to go back to basics and remember, yeah, I have to hold my club this way and I have to swing this way. And sales is very, very similar, is that you start moving down the path, you get good at things and you start maybe falling into some methods that some are good and maybe some are not so good.
And so you have to go back and take a look at what are those basics. But I wouldn’t say that I was a natural, I wouldn’t say that I was even necessarily all that outgoing. I definitely had some phobias going into meetings and just being nervous about talking in front of people. And, you know, the more you do anything I guess, you just get more comfortable with it and with comfort comes confidence. But it was a skill that was learned over time.
Well, it’s one of those critical functions to any growing business is to master the skill of sales. Are there any pieces of advice you could give to entrepreneurs or even larger corporations that are thinking about what they could be doing better with their sales strategy?
Well, the main thing is know your customer. I think it took us a little while in the second company to really figure out who exactly is our best customer. We had gone from user groups to associations to companies and they all were good. But to truly hone down as to what’s the persona in each one of those organizations that is our buyer and who are they? What do they look like? What drives them? What pain points do they have? If you can understand those things and then you build your product or service to that, then sales actually is pretty easy, because the product just naturally fits to the issues in which they have.
Where I think initially we didn’t understand the customers or the product wasn’t exactly what the customer wanted, that’s when sales gets harder. So I always want to try and make sales as easy as possible, if the product can sell itself, or at least, be very conducive to that then that’s certainly something that will help any sales organization. I guess if I had any single point of advice it would be, know your customer and then just drive everything towards that.
And you’re using video effectively and maybe I’m just pointing that out because that’s something I noticed. But when you were thinking about kind of your sales funnel and capturing, the most potential customers, is that sales, I mean were you using various strategies or did you purposely hone in on video?
No, I think part of knowing your customer is understanding how they are going to consume content. And there were some back when we were doing that, there were some new tools that were coming out that made a little bit easier to be able to create short video content that was easy to consume. And that’s the thing is you have to, you know; knowing your customer, you have to understand that they’re very busy. And what you’re proving them has to be very compelling but also just easy to digest, easy to watch, easy to consume. And sometimes sit and read a long blog article, people might not do that.
But if I could have a two minute really powerful video message, those seem to resonate with people. And so we were trying different things to see what would be the best fit. For some people video was good, for some people blog posts or landing pages or ebooks, you know, a little longer form content was better and so we had a little something for everyone at every stage of the sales funnel.
So now transitioning to your current position, can you tell us a little bit about who you sold to and why you decided to sell to the organization you’re with, Higher Logic and then what you’re currently doing with them today?
We had two companies that were interested in us as we were going through the sales process. And to be honest, at the front end of that process if you would have told me Higher Logic was a company that would buy us I would have told you you’re crazy, I loved and hated them. I hated them because they were my biggest competitor and I, you know, I wanted to beat them. But I loved them because they were really good at what they did and they made me a better salesperson. There was my counterpart in that company who again I had a love hate relationship but I respected the heck out of him because he made me a better salesperson because I was selling against him. And then once we wound up working together at Higher Logic, he had said the same thing which was ultimately very, very nice.
In looking at the companies, there has to be a level of comfort that you have because we didn’t have a lot of customers, we had 150/160 customers and I didn’t want to be getting calls saying, “Hey, why did you take this company that isn’t any good and they’re not doing things they used to do and they’re not giving us the level of support that you provided.” I didn’t want to get those calls and so I wanted to make sure that they were truly taken of. And I just cared for my customers and I wanted to make sure that they were going to be okay and that any company that we ever moved to would be a step up and certainly not a step down.
And Higher Logic had very good software and so that was a good fit there. For the employees, again it was the same thing, I didn’t want anybody to lose their job, I wanted to make sure that they felt that culturally it was a great fit. We had won Best Places to Work in Phoenix for a few years and we’d do some nice things for the employees, we truly care about our employees or we did when we had the company and so we wanted to make sure that they were going to be well taken care of as well. And of all the companies that we looked at, Higher Logic ticked all those boxes for us, on top of the fact that I had known the founders for a very long time. And there was a good sense of co-opetition; it’s probably a good way to put, over the years. And so it turned out to be the best fit for us.
So now I am the VP of corporate sales and it’s a fairly new vision for us, maybe they were really hitting hard probably over the past two years, three years, where we’re going after corporate customers. Historically the company has been association based, are going up to national non-profits. And so we’re ramping up the team, I have a team of 12, soon to be 14 here in very short order, geographically dispersed around the country. So I love the job, it’s great because you realize that you have some good information to be able to share and it’s fun to be in this role and provide that mentorship role to them.
And what are some of the key things that you’re honing in on now that you’re managing a team and corporate enterprise sales? Is it, you had mentioned earlier, sometimes the longer you’re in it, you have to kind of remind yourself, it’s like playing golf. But are there kind of even more nuanced aspects to your, you know, to your strategy given that you’re selling into a new market?
Right now it’s a learning experience to be very upfront. There are a few key players in the industry, competitors and we’re learning more about them and what their tactics are. We are learning what messaging is really resonating with this type of customer and these personas that we’ve chosen to go after. So right now it’s a lot of AB testing, it’s a lot of listening, it’s a lot of learning, it’s a lot of building, I mean more than half my team, almost two-thirds of my team is brand new and brand new to the industry, brand new to the product. It’s a time for rebuilding but it’s a time to learn and that’s what we’re doing the most of. And I think any company that goes in and thinks they know the market and thinks they know what the customer wants without sitting and listening and understanding and listening to the customer telling you what they want, isn’t going to be successful. We’re doing a lot of listening right now, a lot of changing things as we learn and ultimately it’ll pay off for us at the end.
What do you think is next for you, is it once an entrepreneur, always an entrepreneur or do you have any sights down the road to start another company or are you kind of learning the corporate life for the time being?
Yeah, it’s hard to say. I really do enjoy it here at Higher Logic, I love the role, I mean I love this mentorship role that I have, I love my team. I was just telling some people last night that I, you know, I’ve made some really good friends here and they’re just really good people. So I don’t have any plans of leaving any time soon, but do I have the interest to start a new company down the line? Yeah, absolutely, I think that once that’s in your blood, it’s always in your blood and I don’t know if you’ll ever be able to get it out. Now whether that’s another big organization or maybe something that’s more of a hobby size that I could, you know, something I could do on the side. I’m not quite sure, but for the time being I’m really enjoying what I’m doing, I’m extremely challenged in this job which also makes it fun to get up in the morning and be excited about work. So I don’t know, we’ll see what the future holds.
One thing I noticed about you is that you seem to have a consistency in being upbeat and having a high energy level, is that also something that is just kind of inherent in the way you’ve been? There has been certainly ups and downs, as an entrepreneur, or maybe has the experience of going through those ups and downs helped you to ultimately become more able to manage any swings in business?
Yeah, it’s funny, I guess I didn’t realize I was as optimistic as I am and now that I’m with my team, a lot of them are like, “You’re very optimistic.” I think, well, why not, I don’t want to be pessimistic, I would rather, you know, I believe to a certain extent that you can make things happen in your life and I love that saying, like let’s make it happen, because if you want to wait for stuff to happen it probably won’t, but you can affect things in certain ways to make them happen. And, yeah, I think there’s a little bit of experience that’s also in play in the sense that I’ve seen deals die three times and still win them. I’ve seen customers get mad at you and still at the end turn around and be a reference. So when things look really bad I guess maybe I am a bit more even keeled because I’ve seen it before, I understand that, yeah, okay, we have to take care of this and we have to make sure that everything’s going to be okay. But even when it looks like it’s the end of the world; it’s not necessarily the end of the world.
And I guess maybe that’s what’s made it easier for me, and plus I just like having fun, and as we go to business the ups and downs are kind of part of the fun, it’s part of the challenge. It’s part of the fact that I’m going to get up today and that deal that I thought was going to close might go sideways, alright now how am I going to fix it? And that’s fun or at least it is to me, so yeah, I think the positivity is just inherent, I don’t know where I got it but I guess it’s served me well.
Well, that’s a great note to end on. Paul, thanks so much for taking the time, I know our audience will find this very helpful.
Thanks, RJ, I appreciate it.
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