Project Peak Theme 1: You Miss 100% of Shots You Don’t Take
A version of this story appeared in American City Business Journals. Comments from Steve Malik, founder, Medfusion: view video interview.
My April 2015 TED talk, “If there’s a mountain, Climb It!” that studied the correlation between those that climb the 7 Summits and entrepreneurs who start companies successfully, gave birth to seven themes. In this segment, I share theme 1 – You Miss 100% of the Shots You Don’t Take.
Many of us struggle to have the courage to take a chance on an idea. Idea generation is the easy part. Taking action is the hard part. You can’t cross the finish line if you don’t fire the starting gun.
Upon completing her doctorate in higher education administration from Duke University, Kimberly Jenkins, an avid mountaineer, moved to Seattle. To support her climbing habit, she had to find a job and landed at a little-known company with 300 employees called Microsoft.
Six months into her work in early 1984, she approached her boss, Steve Ballmer, and pitched why she wanted to take a shot at helping Microsoft start an education division.
He immediately retorted, “That’s the stupidest idea I have ever heard. You never make any money in education.”
She then handed him her resignation letter, saying that she would quit if she could not take this shot. He quickly said to wait a minute and ran to Bill Gates to share the pitch to which Gates had the exact same reaction.
When Ballmer told Bill that Jenkins would then leave, Gates said, “I love it – I love her passion, ambition and commitment.”
So they gave her a shot – no staff, but the budget to travel to meet any educator. In the ensuing months, Jenkins did a lot of flying, listening to university educators, and by the end of 1984, in less than one year, the education market accounted for 10 percent of Microsoft’s domestic revenue.
Similar to Jenkins, Kevin Przybocki, an Austin entrepreneur, and his co-founders entered a market that others didn’t think was necessarily attractive.
Having just gone through six companies in six years during the Internet bubble — where a lot of not-so-smart shots were taken – Przybocki co-founded Anue Systems in Austin in 2002.
The six companies in six years – five in Silicon Valley backed by blue-chip investors, including Kleiner Perkins – hardened Przybocki to the fact that raising too much money and spending it too fast was not a way to run a company. One raised $130 million and hired 800 people in 12 months. Lack of focus and spending unwisely was a recipe for failure.
So he and his co-founders retrenched to focus on just one product in a niche $30 million-plus market. They decided to build a solution in a narrow space. The move worked. In five years, the company grew to a $10 million enterprise with a handful of products.
Today, Przybocki still believes in remaining “lean.”
“Don’t go out and raise a bunch of venture money – they are going to steer you to grow as fast as you can, hire as fast as you can,” he says. “Instead, self-fund, boot-strap. Make smart, informed decisions. We were making money and directing our own shots. We had total control of our company.”
As for Anue’s story, after five years of “lean” iteration and consequent success, the company entered “Phase II” and expanded into a much larger market: $300 million to $400 million in size.
After they launched “Phase II,” four more players entered the market within six months. It was clear at that time that Anue was playing in a space that was generating interest not only from other tech outfits but also from the investment community. And how to grow and split the resources became a priority.
Management’s biggest internal debates were how to split investing in new versus established product lines. So they hedged their bets in taking shots on new products. Management applied 30 percent of the budget to support the established business. The remainder was targeted to new business.
In the ensuing five years, Anue expanded to more than $42 million in revenue, with $30 million coming from the “Phase II” product. And that was enough growth for the company to be acquired by Ixia, a public company, for $145 million cash.
BIGGER AND BETTER SHOT
Like Przybocki, Steve Malik followed a similar “lean” methodology, including his hiring philosophy “n-minus-1,” – to hire one less than you need.
Malik sold Medfusion, the Cary- based company he founded in 1996 and grew to 109 employees before selling it to Intuit for $109 million in 2013. He was the major shareholder, having raised only $2.2 million in venture capital nearly a decade after starting the company. When he originally founded Medfusion, he was looking for a problem to solve, and learned from his prior work experience that not having equity ownership was frustrating. The second time around, he was driven to buy back Medfusion because he saw the much bigger impact he could make.
Having completed his multi-year commitment, working for a Silicon Valley company, Malik was “closing a chapter” back in 2013.
For Intuit, realities of business were forcing them to divest non-core assets – so the firm put its Medfusion unit up for sale once again. At that time, Malik spent months helping Intuit talk to suitors of the business.
In the end, Malik had an “aha” moment. “I went from helping to sell (Medfusion part of Intuit Health) to becoming the buyer very quickly,” he recalls. “I was a relatively young man, not done with business.”
Malik was focused in one primary goal: Enabling applications to make consumers healthier.
“If our country is going to get control of health care spending, we must take care of our own health,” he says. “My wife was turning 50, so we had a joint birthday/retirement party – the Monday after our big celebration was when I came re-engaged and decided to buy Medfusion again.”
Malik now has a bigger vision of how Medfusion, as one of the most established patient portals, can have a major impact on health care by aggregating consumer data. As an established health care domain expert, he is able to control risks in the shots he now takes.
Sean Lilly Wilson also has worked in technology companies, but a life- changing health scare caused him to ruminate on life and taking a shot at a very different form of entrepreneurism.
In 2006, Wilson received a kidney transplant from his wife, giving him a chance to start a new chapter on health and happiness.
He always had entrepreneurial inclinations. He stepped back and thought hard. He was not a technologist; he was a “people person.” It took him a long time to figure out that he could be an entrepreneur in craft beer.
While a consultant, he figured out how to chip away on things that caused great fear or anxiety. He thereby gained confidence and momentum.
Wilson likens himself as the “nimble tortoise” that happens to win rather than the “breathless hare”– by taking measured, deliberate shots at success.
After his transplant, he began business planning and accepted his first check in 2009 to allow the buildout of Fullsteam Brewery a year later, in Durham.
He describes Fullsteam as “a classic startup business, built on OPM – other peoples’ money” – in a $1.2 million raise with 20-plus investors and getting a bank loan.
He wanted to make sure he had a solid business plan, right location and right team. Wilson was quick to add that one should not take some shots.
He thought about doing a deal with an academic institution which would expand them into on-premise.
“Neat thing, but not for us,” Wilson concludes. “That decision allowed us to hone in on what we do here. Glad we did not take that shot.
About the Author
Grace Ueng is CEO of Savvy Growth, offering inspirational keynotes, executive coaching, and management consulting.
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A graduate of MIT and Harvard Business School, Ueng served on management teams of five emerging growth tech companies before founding Savvy Marketing Group in 2003, recently rebranded to Savvy Growth. Having served on adjunct faculty at UNC Kenan-Flagler and Fudan in Shanghai, Ueng has been named one of Audrey’s 8 Asian-American Women of Influence.