Building A Startup Is Not Easy

Carl Finch

Devin Miller

The Inventive Journey

Podcast for Entrepreneurs

7/8/2020

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The Inventive Journey

Starting and growing a business is a journey. On The Inventive Journey, your host, Devin Miller walks with startups along their different journeys startups take to success (or failure). You also get to hear from featured guests, such as venture firms and angel investors, that provide insight on the paths to a successful inventive journey.

ai generated transcription

building of startups you know not easy right like it's just not even like even with our action order it's not easy [Music] [Music] everyone this is Devin Miller here with a net another episode of the inventive journey I am your host Devin Miller and I'm the serial entrepreneur as well as the founder Miller IP law where we help startups and small businesses with patents and trademarks so we also like to tell the journeys of the different different journeys if people take as they're getting going on startups and small businesses and today we have a great guest on today which is Carl Finch he is a bit of a serial entrepreneur done a few different startups and small businesses when I talked with them a bit before the episode his his description of short description was failure failure and more failure but now we're going to move hopefully towards a success and learn from the failure so welcome on to the podcast Carl thank you sorry I was coughing I kind of skittle my pipe that's all right sometimes skittles will do that to ya so maybe I did a quick intro about you but maybe more you can you'll obviously do a better intro of yourself so maybe I tell everybody a little bit about yourself and backing up to the beginning of your journey and kind of what leads up to where you're at today beginning of my journey through at age 12 when my grandfather handed me a computer because he thought I wasn't getting much work done as home-schooled and I learned how to program in vb6 at that time I believe and then once high school came I learned Java and then College C++ and C and I've always been you know kind of like a hacker that likes to tinker with code and I got my first contract at age 19 got my first programming full-time job at age 22 worked as a software engineer level to engineer worked my way up contract contract then fell on the role of a lead architect at Wells Fargo and then really felt that building rich corporation software that took advantage of people that needed help was no way to make a living and felt spiritually good about yourself so I decided to jump into the startup industry and like you said fail fail fail fail fail but um every time you fail you learn a new lesson that you take on with your next startup and your next startup either fails or succeeds financially that is but every startup that you built to completion and see to production I see as a success maybe not a financial success like investors would like to see them as but I see them as a success because you're on a journey to build a product and you help service a solution around a problem that you're solving to a niche market and as long as you get it into production to me that's successful because you work on a very difficult problem and you sought to its completion and that's successful in my eyes in my perspective sure no and I think that's a great intro so maybe we can dive into that just a bit deeper so did a few your grandpa gave you a computer and you're growing up you got into apps go into the development in decoding went out and did that and then you went over to Wells Fargo and did that for a bit of time I think we talked about it was a bit of automation for some mortgage loan or the loan industry one not decided that wasn't the right fit for you and so you try you decided hey rather than keep working with the place that I'm not it's not good for me or not that you know doesn't want it in the direction I want to go with why he decided to go over to startup so how is and I think you said your your first startup was was a hippo CROs or what was it reminded with the name I'm wearing a shirt okay so and that one was doctors with medical records if I remember right so how many people the scheduled appointments and transfer medical records and what not so tell us maybe just diving in see you made the jump from big corporation to doing your own startup and how did that first one go for you um first it was very exciting hmm and we were all excited and inspired to change the industry oh and we thought we could because the technology had just just came about to where medical records systems that build EMR systems were just going online with their api's and so our concept was possible we knew we know it could be built even what even if it was just with you know three or four api's at the time and believe we we started with well Mon or forget whatcha API we started with but we we ended with epic system because a API system out there it cost $15,000 a year to connect to and you know we we made the bet to pay that 15k and we went to hospitals and we demonstrated and we got shut down hard we got shut down real hard and that was the biggest lesson that you you may be building something that's inspiring that's helpful that solves a problem but for whatever reason the market doesn't want it and maybe they flavor that a little bit if I remember when we talked before a little but it took about three years to build that and then you guys kind of went out six months trying to talk meet with decision makers get it to the product to the market get customers and whatnot and kind of after that six months journey or you know after that it as you said kind of got shut down harder you just weren't getting the traction you think you wanted is that fair because I remember oh that's that's very fair well we got shut down hard because in the medical industry there's a red tape that you have to cut through and you have to get the doctors at the clinics to want to use your software which we were able to convince a couple of doctors and clinics that do hospital that they they wanted to test it out but then after you get by that red tape you have red tape at there at the tech helm of that hospital and the administration office and they all have to agree on it and if anyone in that line disagrees with it it doesn't go through so there's just a lot of red tape in the medical industry and you know I should have had I should have had for thought about the red tape before getting in the industry but I was just too too excited to hike on the technology and and the promise that it could it could make for that industry and and didn't care to do my due diligence as it were say and doing the first so you get to that and I think that that's an one you know I think one takeaway is that you know you always you want to make sure and I get the same way a lot of in in the sense I do engineering and I do work a lot of Technology and oftentimes you get very excited about the technology technology is awesome it's great it can do a lot of cool things and you don't necessarily always go out and explore the market as well as you could or should in the sense that you know just great technology doesn't always mean that we'll make a great product or always people will sell it and you can have the best technology and I always you know you go back to you know back in the day and if people remember prior to DVDs you got VHS does yet Betamax and you know or a cassette tapes versus eight you know hey track and sometimes the technology is better but if you can't make it go over to the market technology doesn't win the date you have to have the good technology but you have to check the fit so when you get towards the end of that you know six months of because I mean three years is a while to build there's a lot of time and effort and blood sweat and tears and then you go out you try for six months is you know and you just saying hey we're not getting the traction or hitting more red tape than we thought we would people aren't adopting it how did you make that decision okay we're gonna after you know putting a whole lot of time and effort into it pull the plug or decide to go do something else that became a question I had to solve I had asked myself personally like do I want to stay in this and you know get another thousand rejections before I get a yes ten years down the road we're doing or go I just want to like jump the ship it's all burning and I don't want to catch myself on fire you know when this thing goes down and you know it's at the end of the day like look technology's great at least we know what we want to build or what you know industry we want to be part of so let's just build something else let's be cool about it and you know let's see where we go from there okay and yes that's when we asked that's when we went on social media and said hey - you know - co-founders have ten years experience building systems you give us an idea we'll we'll build attack and will you know we'll come up with equity structure later you know throw us some ideas out there and we didn't get one good idea really okay we got like oh how about Instagram before cars and I'm like hey how about going on Instagram and searching for cars and see what you find and you know we didn't get any good ideas from that but I owe them on the on my whiteboard in my garage and I looked at them I said you know there's an app you know here somewhere that we can build and my team member Chris was like you're crazy these I guess suck I mean every app that you have listed up here they've already you know been unicorn startups and we're just being copycats or we're being copycats in a very niche market that shouldn't even exist like actually mass him for tinder you know and I'm like yeah very immoral to and unethical and I couldn't build that but anyways I you know that's how we came up with alibi so it was before we dive in that just for a second so diving in that just a little bit lower deeper so you decided hey we're getting going out of the last startup it didn't it didn't quite work out we didn't get the tracks we want so rather you know there's a way to come up with new ideas let's see what other ideas everybody else has out there whether it's you know uber for massage therapist I think you mentioned or you know Instagram for cars which is already there and so you kind of said hey what other good idea maybe other people have good ideas that we can work out something or help people to develop their dreams or their good ideas that they may not have time and resources which nobody had to the people you threw it out you didn't have any good ideas but you took that and you threw it up kind of on the whiteboard saying okay what's the commonality or whether you know what are something that we can take off all these bad ideas or ideas that are already out there ones that can implement and make something of it or what are the common out is that a fair assessment that's the fair assessment that's exactly what happened so you do that now you now you move on so I didn't mean to interrupt by any means you move on to now what you guys are doing today so maybe give this a little bit of how you how you took all those ideas and decided to do or start what you guys are doing today right so we took all these ideas on a marker board and we look at them and we said you know what what are all these apps have in common and what are all the apps that have already been built have in common and you know we said well a user logs in to the system and data is presented to them and they can interact with that data if they wish and they can add content to that community that's being created around the system and that was the commonality we got out of all these apps is that there's data being presented to a user and that user can interact with that data and they can create modify that data and present to the community and and that was the number one thing we got out of all the apps all the bad apps all the good now we're already out there like uber and we're - and stuff like that and you know we we we realized that hey maybe we could auto-generate now and you know that was the that was kind of the you know light bulb moment for us so we're like no no one you can't auto-generate map and we tried having people play devil's advocate for us I'm like I went to my mentor Ronnie who I thought would for sure play devil's advocate Mike Ronnie talked me out of this we we can't auto-generate apps in like seconds or minutes can we he's like oh no yeah yeah you can I mean you have to build it correctly but yeah you can do it and and I was like I thought you're gonna say no and I just move on to the next idea it's like well maybe this is this is this should be your next project and you know he he gave it to me as a bet to build I said you know build it and and and we built a prototype of it in two weeks we we built just a little bash grip in Linux that you just typed in commands in it would generate c-sharp at the time and asp.net core views using razor view engine and there was a little app that you could you can run once you deployed it to a server and I'm like that was easy and then in two weeks he's like yeah but now you have to make it profitable now you have to get it ready for production and and that took a year and a half so in if I were to unpack that just a little bit so when you see auto generate so let's let's say I had an idea for the world's best game right so I have candy crushed 2.0 or whatever the better you know me so if how does that work so you know let's use it somebody that has zero you know do experience with the app and building in I just come and I can tell what I want to do and I'll magically make it there's it more for someone that has some experience and is wanting to then you know put in some of the initial information or data or file and then have it auto-generate so who's kind of your marketer you know who's gonna be the one to use your auto generation of the app as much as I would like it to be the former it's actually the latter is people who are experienced who have a my sequel database file or schema file because they don't want us to steal their data because I've gotten paranoid customers over that but as people who have a a my sequel schema file and they want to build an app based off that schema and we reversed you know they upload it to our wizard and they press the magic button and three seconds they have a download file to download and you know all we're doing is reverse engineering that database learning the how each table was built and what data columns are in each table and we're just reverse engineering every table and creating crud operations and nodejs for those tables because at the end of the day no matter you want to believe it or not but every app out there is built out this same principle you're talking to a database and you have to perform these crud operations on these tables within that database and cron operation stands for create read update delete it's an acronym mm-hmm so if you do that and so the whole idea is basically hey we can a lot of acid being made out there a lot of developers and you can this is kind of almost you know a short circuit or you know a shortcut in order to save a lot of the time that they don't have to go in and do a lot of what would be the structural stuff foundational stuff we can help them do that and so that they can they can have you know have that auto-generated save times you know save money into on development at the same time but so how do you turn that as you said you know what you know you what took the longer timer to you know the the time the time that you know built in two weeks with the mentor and his role as yourself but looking and saying what makes it there what's gonna take a long time is to make you profitable so how do you now take that as it from the idea app a let's make it so for those that are no programming or they're doing some that you can auto generate a lot of the bear for the app you know the structure of it how do you make that profitable how did you go about figuring out how to make that profitable or are you still in that in that mode where we're kind of still in that stage but you know we you know we use the lean start method ology where where we build the Minimum Viable Product and then get you know ten people online to test it out and get with our feedback you know you have to start there because if you can't get ten people to use it for free you're not gonna get one person to buy it you know Kay there are you know harder in cash to to use it but we you know we we tested it with system architects that we we we've had relationships with for like a decade and we yeah and we've tested it with engineers and and investors that we've only known for a year or less and we we we got you know multiple responses that were polar opposites of of what we expected we're like you know some developers some system architects who've been friends for us for 10 years it was like no I mean they're only gonna come here once scaffold the app and then build it and polishing themselves and then publish it so they're not going to want a monthly subscription and then you got the investors and the engineers who are in like these boutique shops that focus on building apps for their customers you know each week in each month say no you know if you do a monthly subscription and keep it on the cheap side you're gonna get a lot of these people signed up and they're gonna want to pay you $35 a month each month because they're gonna want to come back and generate their next project with your in their next project with you and as long as you keep that monthly subscription low you're gonna have a high em are are an AR are at the end of the year that investors are just going to eat up and so we you know we said well can we make both these people happy because right now our our our our business model was set up to make the system architecture be where you just go in there once pay for it and you're done but you're paying a high premium because a one-time service fee and that's right well sure we can just use stripe and set up a subscription pay wall and make the investors happy and then we just have a different wizard for them so that's that's what we're working on now is getting that ready so we can service both people and make them both happy hmm no that's that's why you want to do at the end of the day is trying to make as many of your customers happy with as little modification to the code or your business as possible so and that reminds me almost one of my books I recently read this an interesting book is you know it's on the the genesis of Netflix right and so Netflix is obviously a subscription-based where you pay each monthly you know pay a fee each month and you can either get it through streaming and they still for those of us who like DVDs still do DVDs right but you get that and they went through a little bit of the same thing because when they started out if you remember and this has predates me a little bit or at least my memory I wasn't old enough to use it but they started out as more selling DVDs right so is either one-off kind of what you described hey well some of you come in can buy a DVD that time you didn't really have Amazon those in DVD sales or other things where and you had those you know one-off type of thing which is almost where you describing or we go all-in and with the monthly subscription and try and go more the streaming wrap right so you can almost have subscription or selling a DZ's or DVDs as a one-off you know and they slowly transition from what would have been a one-off to more of a subscription basis which is where they're all now you can on the gone to Netflix anymore and even go buy DVDs so to speak so how do you make that I did and so I think to wonder you're you're right in the sense that you you know whoever has the money's green you try to make the customers happy if you could sue both markets why not and on the other hand sometimes it gets difficult to make a model that fits both right so sometimes it's hard to give a subscription that where people like the subscription and also service or people that want to one off so how do you how do you find that balance I don't think you have to doing a/b testing and let the data tell you hmm like let the data tell you what you should do if so say my aim my a test is one out pricing my be test monthly subscription and I shoot shoot the software out there on the server and do a/b testing and find that out of every hundred won all services members come and pay one time ninety nine of them are not coming back ever again versus a hundred go to the B test subscribe and out of a hundred fifty of them are coming back well then it's obvious B wins because at the end of the day you know startups with business money talks that it does it it always always talks and you always fall over the money is so I know I think that's a good idea is to you almost look and say okay we got a few different ways of structuring our business if we can if we can service both let's set it up to service both and then see where the where the money goes or who's the one that's you know who are regular most profitable customers or how do we build a business around it and then focus in on that so I think that's a great idea so we're we so now we are reaching the end of the podcast and so I'm gonna jump to to my last couple questions that I always ask each time at the end of the podcast which is the first question is so what was the worst business decision you ever made um hip across giving a sales rep that I wanted to hire 20% equity making my decision not you not doing due diligence but by just show it by just observing him and making a rash decision based off of him wearing a suit in a gold Rolex and him talking good game because when we got into the sales meeting at Duke hospital and met with a CTO guess who was completely quiet and yeah yeah you have to do your due diligence when building a start-up and anytime you're adding an important role to a team or giving substantial equity or even responsibility to to the project you better do your due diligence or you're gonna make big mistakes and you're gonna have that debt carry out throughout the startup no no I think that's that's a good point I think sometimes you're you know hiring is always wondering you here to get someone on you think they'll make a difference you're you know overloaded lots of things to do not enough time to do and so you say hey this person will do a great job and either bring them on and whether it's a salary base or equity base or whatever each time you bring someone on it's a you know especially to start up and there's a small you know a small group of people they have a big impact on culture and they also they're on and especially if you give equity or you give ownership state whether they do their job or not they have that a lot of times that equity and now you have to deal with that their figure out how to proceed forward or make sure that they actually will pull their weight and some people do a great job and they're great hires and absolutely worth every month every bit of equity you give them or money if a them and others aren't so I think that's a good thing to do due diligence often times slow down on the hiring a little bit in order to make sure you're getting the right people not just people on board okay so the second question I always ask is if your to get someone that was just getting started or wanted to get started with the startup or small business just had an idea or just starting to develop it what would be your one piece of advice for him Oh make sure you have patience persistence and perseverance to see through hmm and so and that be important because startups are gonna take a lot of time effort sweat a lot of ups and downs and so you better a little bit buckle in and be ready for the ride otherwise you're never gonna make it right oh I mean not enough startups you know not easy right like it's just not even like even with our option order it's not easy because you have you know the five pillars on the start that you have to form because you know customer service customer frequently asked questions marketing pipeline tech tech support you know all that you have to build when you're building a product and you know even if you could get your tech built in three seconds or three days or three weeks you still have to worry about the four other pillars of the startup and so it is no easy task so you have you have to be willing to buckle down and get through the hard times so you can you know of your labor when it does start become profitable no that's great advice um so yeah and I think that everybody goes in and a lot of times you have one or two areas of expertise or talents and yet inevitably there are a lot of areas you have to cover so you have to be willing to one dive in learn and understand and/or find the people that make sense bring it on and then be willing to put in that time and effort to do the other areas that may not be quite as as fun or as exciting or as enjoyable as the thing that you really love the most but in order to make it a successful startup you have to do willing to dive in on all that so I mean that's great advice well thank you for coming on we're reaching the end of the podcast and there's been a fun fun discussion to talk all about your journey and what you're doing for those that want to reach out they want to connect they want to get involved either use your product or you know be it a subscriber or want to get involved or any other way what's the best way to reach out to you oh reach out to me on LinkedIn LinkedIn comm /n /cs fetch our Twitter twitter.com slash CS fetch and our platform start a code on IO perfect we'll certainly make sure to clear put that in the show notes so people can find you reach out to you and if there's any connections we made make those connections in the meantime good luck with your journey for those of you that are listening that they're wanting to share your journey we always welcome anybody to apply to the show you can go to inventive journey calm and then apply to be a guest on the podcast and for those of you that are looking for help as you start your startup to protect and grow with patents or trademarks feel free to reach out to us and we're always there to help thanks again for coming on it's been a fun time to hear your journey it's been it sounds like it's one that has much more too much more to come and they'll be fun too to see how it continues to go so thanks again and good luck with your journey Thank You Davin okay well have a good one you [Music] English (auto-generated) All Recently uploaded