Angus Davis x Flying Upside Down
A summary of Angus’ presentation, “Take Offs Are Optional, Landings Are Mandatory”
In 1999, Angus co-founded Tellme, an early voice recognition platform that raised $200m with no product or revenue. Once they shipped the product, they realized their business model wasn’t going to work. Angus had to layoff many of his employees and at the same time he was going through a tough time in his relationship, that’s when he decided he wanted to learn how to fly. One of the best things about learning how to fly, he recalls, is that you’re so worried about not dying that you start to forget about your other problems. In 2007, Microsoft acquired Tellme in its largest-ever acquisition of a private company.
Angus is now CEO and founder of Upserve, which helps thousands of restaurants manage over $10 billion in annual sales. At the Flying Upside Down conference, Angus explained how his pilot training has helped him manage his businesses to become the successful machines they are today. These lessons include stall training, The Four C’s, checking for bad instruments, and the takeoff “point of no return”.
Stall training is when the pilot flies the plane at an angle where there is no lift. A blaring alarm goes off while the plane stops moving on a normal trajectory, putting the inexperienced pilot in an extremely stressful situation. This is just one of the hectic exercises pilots are asked to go through, another including a blindfold and the teacher mixing up the pilot’s instruments. Normal people freak out but, just like a CEO, pilots can’t. This training kicked in while Upserve was a raising their series B in 2012.
After getting turned down by an investor, Angus was called into a meeting and found out their payments partner was backing out of their deal, meaning their revenue model had fallen apart. With four months worth of capital on hand, Angus had to figure out what to do. Instead of visibly freaking out like his colleagues, Angus was able to channel his flight training. When there’s an emergency, pilots are trained to look for an open patch of land to land on while figuring out a less drastic solution. This was precisely Angus’ plan-of-attack when handling his business emergency, he decided what they’d do in a worst case scenario, then he figured out his other options. Ultimately Upserve was able to find a new, and better, payments partner. In Angus’ words, “key thing was not freaking out, working the checklist, and remaining calm”.
The Four C’s are steps pilots are told to go through in case of a problem while arriving at an airport: Climb, Communicate, Confess, and Comply. Founders have hubris because they see something that others don’t. As Angus describes, “sometimes that same trait, though, makes you less willing to admit something’s wrong or less willing to ask other people for help”. When Upserve was raising their Series C, Angus realized he made a mistake by mis-setting a key executives expectations around what he’d be getting out of the financing. Angus resisted the temptation to solve the problem on his own and instead followed The Four C’s, leading to a positive conclusion. He climbed by “up-leveling” the people involved, communicated by engaging the board, confessed by explaining what he did wrong, and complied by working with the board to solve the problem. As Angus reflects, “being a CEO doesn’t mean you can’t ask for help”.
Pilots also learn that they have to pay incredible attention to their instruments, and often two instruments will disagree with each other. The same is true for businesses, the metrics you use are incredibly important but sometimes they’ll lie to you. Angus provides the example of his sales department in 2015. The head of the department expressed to him that things were going great because they keep getting more meetings; however, when Angus dug into the productivity of each component of the department he realized it was diminishing. He admits, “the way we were flying the airplane was wrong”.
The next component of flying Angus describes is the point of takeoff, and how that resonates with key decisions. As illustrated above, pilots face a decision point directly prior to takeoff that Angus calls the “point of no return”, where you must continue even if something’s wrong and you aren’t totally off the ground yet. Businesses face their own key decisions that each represent a takeoff, such as hiring an executive, selling the business, doing a large financing, discontinuing a product, or ramping the burn rate up or down. As the title of Angus’ talk alludes to, all takeoffs are optional, but you have to decide at V1. In his own experience, Angus has actually had to decide to change course at V1. Top line growth was solid and the company was ready to ramp things up but Angus was worried about what some of his instruments were saying; the costs of acquiring a customer were increasing while lifetime value was decreasing. He decided to change the go-to market and lay off ~30% of his company, including members of the senior leadership team. Now all his instruments have steadied, and the decision was obviously fruitful. Angus says, “the key thing is knowing when you’re at that V1 decision, because if you go past it without recognizing it, you’ve missed the opportunity to have optionality in your takeoff.”
Handling emergencies, overcoming hubris, watching and questioning metrics, and recognizing key decisions can all determine whether a company survives. In his talk, Angus brilliantly illustrates how founders should maneuver the many challenges they will inevitably face.
This post was inspired by Angus’ presentation at Flying Upside Down. You can view a video of his presentation at flyingupsidedown.com
