Author Marty Schultz: “To develop resilience take nothing personally”

Take nothing personally. I often tell young entrepreneurs that regardless of how good they think their idea is, they won’t know until they talk to potential customers. If you talk to one or two of these customers, they will probably rip apart your idea and make you feel worthless. Instead, put your ego on hold, and repeat this several dozen times, and then you’ll have a real understanding of what people will buy, and probably a road map on how to sell to them. You may even find one or two of these potential customers will actually pay you to create a product that exactly matches their needs. And that’s far better than trying to raise investor money to start your company.

In this interview series, we are exploring the subject of resilience among successful business leaders. Resilience is one characteristic that many successful leaders share in common, and in many cases it is the most important trait necessary to survive and thrive in today’s complex market. I had the pleasure of interviewing Marty Schultz, who is the author of No Investors? No Problem: A Serial Bootstrapper’s Playbook for Breakthrough Success on a Shoestring Budget (2019). He is the President and Co-Founder of ObjectiveEd, an organization providing students with disabilities educational games to achieve the best educational outcomes, and the CEO and Founder of Blindfold Games, now a division of Objective Ed. He has also served as CEO/Founder of McGruff SafeGuard; President/Co-Founder of eSped.com; President/Founder of Omtool; and CEO/Founder of Softbol.

Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’?

I’ve been an entrepreneur since I was a teenager, but I didn’t realize it at the time. When I was in high school, like many other students, I hated the cafeteria food and went out to McDonald’s and Burger King with two of my friends. Soon other students heard about this, and asked us to bring lunch back for them. Eventually, this turned into a fast food delivery business and we were taking orders from more than 50 students — it was essentially an UberEats in the 1970s. To meet the demand of my customers, I built a drink holder in the trunk of my car. Our “business” was doing so well it was reported to the school administration by my competition — the cafeteria workers — and eventually we were shut down. This taught me at a young age that to have a successful business you need to identify a problem, implement a creative solution, and continue to innovate as your customer base expands.

Can you share with us the most interesting story from your career? Can you tell us what lessons or ‘take aways’ you learned from that?

When I was in the process of starting my first company, my partner and I were both completely ignorant as to how to build a company and were told that we needed to get a knowledgeable and well-connected advisor to help with execution and development. We were trying to capture the attention of a Vice President of a major software company who had recently retired.

This was back in the early 1980’s where there was no Internet or cell phones; and very few businesses had voice mails. There were only two conventional ways to contact someone: by calling a landline and hoping they answered or by sending a letter through the US Postal Service.

I called his house every day, several times a day, for a month, but never got through. I could not visit him at his home — that would be an invasion of privacy. I sent several letters, but they were never answered.

I then arranged to have a small bonsai tree delivered to his home with a note. He called as soon as it arrived and we arranged a lunch meeting. While he declined being a mentor, he gave us valuable advice that we were able to use to help get our company off the ground.

What do you think makes your company stand out? Can you share a story?

My current company, ObjectiveEd, is unique in that it uses gamification — i.e. teaching through games — to help students with disabilities improve their educational outcomes. Almost all teachers use digital games in their curriculum, and about 20 percent use it every day, yet there was no software designed specifically for students with disabilities until ObjectiveEd. Gamification works because students own their learning. They have the freedom to fail, and try again, until they succeed. By doing this, students discover intrinsic motivation and learn without realizing it.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My first mentor was Sherman Hill — the CEO at a small software company where I worked one summer. He started one of the first Apple computer stores in the world, and named it Sherman Howe. He picked that name because everyone would walk into his store and ask him “Sherman, How do I {fill in with common question} with my computer”.

Sherm would meet my partner and me for lunch once a month where we would give him a rundown of current projects. He would always play Devil’s advocate, making sure we properly analyzed each business issue. At the end of lunch, when the bill came, Sherm would take out his American Express card to pay. The restaurant didn’t take American Express — and Sherm knew this — so we had to pay. Despite us being struggling entrepreneurs, he was trying to tell us that there’s no such thing as free advice.

Ok thank you for all that. Now let’s shift to the main focus of this interview. We would like to explore and flesh out the trait of resilience. How would you define resilience? What do you believe are the characteristics or traits of resilient people?

Resilience is the ability to ignore all of the warning signs that your venture is failing and still be able to find a nugget of hope — and then put all of your energy into making that nugget into a reality. Sometimes it’s a “Fool’s Journey,” but with sufficient persistence and diligence, you’ll find a way to untangle a knot of interrelated complex problems and come up with a path forward.

Resilient people refuse to fail, are very logical problem solvers and can shift their perspective to think of an uncommon solution. They won’t reject a solution just because it’s risky, absurd and untried; instead they will try to analyze their solution and weigh the risks and rewards prior to moving forward.

Resilient people realize that when failure is at the door, the only thing they are risking is time when coming up with possible paths forward. They understand the fallacy of throwing good money after bad, but they will continue to pursue their vision as long as they see a path forward.

When you think of resilience, which person comes to mind? Can you explain why you chose that person?

Steve Jobs set a high bar for resilience. In each of his ventures, Apple, NeXT, and Pixar, he had a vision and stayed focused despite what naysayers said. He had dissent from inside and outside the companies, but his vision was so clear. He ignored the doubters and demanded people push themselves to achieve what he knew was possible.

Has there ever been a time that someone told you something was impossible, but you did it anyway? Can you share the story with us?

I often think of the time I thought it would be fun to become a veterinarian. I was in college, just finishing my master’s degree in Cognitive Psychology, and decided to enroll in veterinarian school. At that time, there were only a handful of schools across the country, making it much harder to get into than even medical school. I researched several schools and learned that Cornell University was one of the best.

I had never taken a biology class, so I knew I would fail a standard application. I also knew it is helpful to know someone well-connected to help you get into a school; however, I didn’t know anyone. What I did know was how university research departments worked. So, I decided to find someone to help me get into Cornell.

I researched all the professors who taught there and found several of them were on the application decision committee. I settled on two professors who could be influential and I read all of their published animal science research. I spent about a month in the library.

Reading a research paper in animal science is no different than a research paper in any other field. You read the abstract, hypothesis, results and conclusion. Then you read all the papers they reference in the bibliography and repeat that process. Eventually, while you are not an expert, you have a decent command of the field.

By reading the conclusions, I could determine the direction that professor wanted to take in future research. Then, I thought about what experiments I would run to prove or disprove his ideas and also looked for flaws in his prior papers. Eventually I found something worth discussing, and we corresponded about every three weeks using regular mail. Again, this was during a time before e-mail!

This correspondence led to my being invited to apply for a combined Ph.D. in Animal Science with a Veterinarian degree, all covered by a stipend from Cornell. I accepted but later dropped out when I realized I didn’t want to spend the next six years of my life learning something that, for me, was a passing fancy.

Did you have a time in your life where you had one of your greatest setbacks, but you bounced back from it stronger than ever? Can you share that story with us?

Back in the early 2000’s, instant messaging was all the rage. Companies were using it for business as much as people were using it for fun.

Salespeople were sending invoices and making commitments over instant messaging and, unlike email, there was no computer trail. Once the message was sent, all evidence was gone.

That’s not good for a business, so my partner and I decided to create a computer trail for instant messages. We start picturing our company’s bright future. Tens of thousands of companies would need our product as their employees were sending instant messages all day.

Our product would solve so many problems that instant messaging has caused: workplace bullying, sexual harassment, fraud. We thought we were going to be wildly successful.

We built the product and started marketing it and it was a failure.

People only value fire extinguishers after they’ve had a fire. That’s when I learned why fire extinguishers are so hard to sell. Selling our product was just like trying to sell a fire extinguisher: unless a business had a problem that required that computer trail, no one cared. We were just about to shut down the company when I noticed a sudden spike in downloads. I called several of these customers and learned that tech savvy parents were using our software to track their teenagers’ online activity to keep them safe. We shut down our marketing efforts and went back to the drawing board.

We re-engineered the entire product so it was simple to install and very easy to use. Then, we searched for a brand that everybody trusted — and we came to McGruff the Crime Dog. Remember his slogan “Take A Bite Out of Crime”?

We flew to Washington, D.C. and convinced the National Crime Prevention Council — they owned the McGruff brand — to give us exclusive digital rights — at almost no cost. We launched the product as McGruff SafeGuard and it was an instant hit with parents.

Did you have any experiences growing up that have contributed to building your resiliency? Can you share a story?

I think it was my natural inclination to be an engineer and have a “do first, ask later” attitude, where I always had to deal with the results of my endeavors.

In high school, my friends and I were at the computer center and suddenly faced with a complex technical problem that we decided to troubleshoot on our own. These 1970’s computers had big disk drives that had to be inserted into large storage units that looked like giant washing machines. Each of the disk drives contained typically twenty “platters” — circular disks the size of dinner plates on which magnetic data was stored in a disk drive.

One day, one of these “platters” out of the twenty in the stack had a defect and could no longer store information on it. My friends and I were determined to fix it by ourselves, without consulting the powers that be — we should have of course. In truth, as teenagers, we didn’t have much regard for the powers that be. Besides, we figured we were the smartest kids in school — if we couldn’t figure it out, who could?

We gave it a shot, were sure we fixed it, and then congratulated ourselves on our brilliant ingenuity. When we started it back up, the machine began making horrible clunking noises. Within five minutes we were now sure we had completely destroyed this forty-thousand-dollar computer disk drive. Panicked, we had to call in a technician who oversaw the computer center’s equipment. It didn’t take long for the expert to figure out that we had tried to fix it on our own. Fortunately, the tech was able to fix it and covered for us.

We had gotten lucky, but the lesson I learned that day was not what you might expect. It was not to be cautious. In fact, just the opposite. It was: “do first, ask later,” which became a sort of creed of mine. Even though I did screw up, I still had gained valuable experience by trying to fix that computer disk drive –something I would never have been allowed to do on my own. The plain fact is that if you ask permission, people will generally say no. If you go ahead and do it, all you have to do is take responsibility for it and apologize. Of course, I am not giving you carte blanche permission to do anything criminal — just to be bold.

That attitude can work in your favor when you are starting your own company. Don’t be afraid to make bold plays and do things that others might consider outrageous. Even if they backfire you will learn from your mistakes, others will admire your gumption, and, if you pull it off, you will leapfrog past your meeker-minded competitors.

Resilience is like a muscle that can be strengthened. In your opinion, what are 5 steps that someone can take to become more resilient? Please share a story or an example for each.

1 . Fully understand what you are trying to accomplish as a long-term goal, and that any path that leads there that is consistent with your personal morals is a correct path.

In the early 1990’s, my partners and I built a company to automate sending a fax directly from a computer system. We identified a problem with the current standard for faxing: it required too many steps. We launched a product that minimized the steps, but encountered a new, major problem. There were two competitors with similar products, albeit far more expensive. Our product was about half the price. However, the competitive products were bought by businesses through local resellers throughout the country, and the competitors had locked up all of the resellers. We had no choice but to sell directly to the customers — by advertising in trade magazines and building a telephone sales force to engage customers and convince them to purchase. It required completely modifying the sales and marketing models of the business. It was painful, but we had no choice, and found success in this modified business model.

2. Fully understand that you are always operating with incomplete information, and that it’s only through feedback that you will, over time, gain more and more critical information that will help you decide the best path to take. And don’t be afraid to run experiments.

In the same email-to-fax venture mentioned above, my sales team generated a lot of hot leads and interest in the product; however, the companies were not geographically close so we could not conduct office demos economically. It also didn’t make sense to send complex hardware worth hundreds of dollars out to every company who wanted a simple demo. At the same time, there was no way a customer would buy something from us without testing it out.

One of the salespeople pleaded with us to loan the equipment to a potential customer, which was a large law firm that could be trusted. We compromised with the sales representative and requested a commitment from the customer to buy our product if it met their needs, and if they didn’t like it, they could send everything back and owe us nothing. We received a purchase order; we packaged everything up and shipped it to the customer. Thirty days later, waiting in our mailbox was their check. They paid. And that “compromise” with our sales rep worked. We experimented with other companies using our new “pay after thirty days” method. After a few months, and twenty-three out of twenty-five invoices paid, we finally had enough information to determine that a pivot was not only possible, but necessary and profitable. Then, and only then, did we “pivot” our sales strategy fully in this new direction.

3. Be comfortable with the fact that when you attempt something you have never done before, you will get it wrong over and over again. Over time, you will learn from your mistakes, modify your approach, and start becoming slightly successful. You must continue to refine and learn, until success becomes more and more common.

During one of my ventures, we realized that the only way to grow the business was to convince computer manufacturers in Silicon Valley to use our product to recruit customers. Being a programmer by training, I knew how to sell what we built to our direct customers, but not to distributors.

I booked a trip to California and arranged sales visits along the coast from San Diego to Silicon Valley. The computer manufacturer we had highest hopes for was located in Cupertino. My first sales visit was a complete failure, but I learned enough from that embarrassment to make the second one a little better. I got better each meeting. After about two weeks, when I arrived in Cupertino, I knew how the computer manufacturer thought, what they valued, how much they could afford, and what motivated them to make a deal.

4. Take nothing personally.

I often tell young entrepreneurs that regardless of how good they think their idea is, they won’t know until they talk to potential customers. If you talk to one or two of these customers, they will probably rip apart your idea and make you feel worthless. Instead, put your ego on hold, and repeat this several dozen times, and then you’ll have a real understanding of what people will buy, and probably a road map on how to sell to them. You may even find one or two of these potential customers will actually pay you to create a product that exactly matches their needs. And that’s far better than trying to raise investor money to start your company.

5. Think about your business as incremental problem solving, not as success or failure.

We started a company that provided special education management software for small and medium-size school districts. Our product was superior to our competitor’s, but from the customer’s perspective, everyone’s offering looked similar. It wasn’t until they started using the product that they realized our customer service was better and our system was easier to use.

The question became — how can we convince customers we are better? We tried the usual — great website, videos, testimonials from other school systems — but nothing seemed to move the needle.

We decided to exploit something that our system could do that our competitors could not do. When one of our competitors sold a new school district, their computing costs went up — they were using cloud services by Microsoft or Amazon. We configured our system in a different manner, so that new school districts did not cost us more computing resources.

That meant we could give away our system for free, for a year, so school districts could use our system, become comfortable with it, become dependent on it, and then purchase it in the second year. If our competitors tried the same thing, they would lose money on each potential new school district.

This changed the competitive landscape and our company grew very quickly.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I am already part of a movement that I feel is bringing good to a lot of people through my new company, ObjectiveEd. As I noted in my earlier answer, we are revolutionizing education for pre-K through 12th grade students with disabilities, through gamification, digital data progress tracking and artificial intelligence. Our technology is changing the way special education teachers teach and students with disabilities learn.

We are blessed that some very prominent leaders read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them :-)

I have always been impressed with the approach Bill Gates has taken to leverage his foundation to solve key problems in the world.

How can our readers follow you on social media?

LinkedIn: https://www.linkedin.com/in/marty-schultz-9337a/

Twitter: @martyschultz111

This was very inspiring. Thank you so much for joining us!