Greg Smith sold his business in 2008 to Xerox for 5.5 times revenue. It is part of every entrepreneur's dream to start, build and ultimately realize a successful exit. Greg did it and he shared his story at the Technology Association of Georgia's (TAG) Rock Star breakfast series.
Advectis, now Xerox, is in the document management and processing market specifically for mortgage and loan origination. Part of what makes Greg a success is his market focus and market touch. Even though he researched the mortgage market and its need for document processing, he still went and talked to the buyers in the market before he wrote any code. He wanted to make sure his business proposition made sense and they would buy it. This behavior is something I have seen over the years from other successful entrepreneurs.
He did not know it but I recorded his talk. It is presented here for you to enjoy and learn from Greg's experience. I know you will enjoy this presentation as it feels like he is sitting across from you over a cup of coffee. (This is a 58 minute recording) I recommend you have pen in hand because there are many life lessons shared that will help every entrepreneur and angel investor.
Here are 14 points I picked out of my notes from his talk. They are presented in the order of his presentation.
- When being hired as the first key person in a startup it is OK to say NO but not OK to say YES and then NO.
- Talk to multiple players in your intended market prior to burning cash by investing in a product no one wants. Make sure your business makes sense to the market.
- Find adult supervision. It is what you don't know that will kill you.
- If you happen to hit your market during an expansion cycle, it makes almost everything else right for the startup. Greg introduced his product when the mortgage market began to expand rapidly.
- Experience is what you get when you do not get what you want.
- Management should be an open book about the company. It builds a relationship of trust among all the employees within the company. This increased retention and commitment. All good for the enterprise.
- Entrepreneuring is a God-led event and career.
- Their product was delivered using a SaaS, recurring revenue/per use, economic model. The market grew into early acceptance of this model which rocketed Advectis in the early years. It could just as easily stopped it cold.
- In any deal there is good fortune and bad fortune that comes your way. Nothing goes right all the time. Be ready to respond. This is where the adult supervision can help a lot.
- We were the first client for Arketi Group led by Sami Jajeh. They did a fantastic job in making us market credible by presenting us as bigger than we actually were in our formative years. This led to market acceptance with big buyers which leveraged our growth.
- There are always some near-death experiences in any new company. It is harrowing to go through together but it is the foundation for the lore of the company in the future.
- The business has to be bigger to be bought by a bigger company.
- Greg wanted everyone in the company to think like an owner so he petitioned his investors to set aside stock options for all employees. (He tells a story in this talk that shows the impact of this decision.)
- The journey is much better than the ultimate destination. Enjoy the journey.
And enjoy Greg's talk.
