David Campbell of Tropic: Five Things You Need To Create A Highly Successful Startup

Operational excellence: I’m lucky that my co-founder is very operationally minded. We invest in processes early. For example, we brought on a revenue operations team significantly earlier than I think most companies would, and that gave us the critical building blocks we needed to scale and succeed. Our investment in operational excellence definitely set us up to succeed in areas other companies ran into brick walls. It was great to have that powerful operational backbone in place early on.

Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles.

Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup?

In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experience about what it takes to create a highly successful startup.

I had the pleasure of interviewing David Campbell, CEO and co-founder of Tropic.

Dave Campbell is the CEO and co-founder of Tropic, the company that turns procurement into a strategic opportunity and growth driver. Prior to founding Tropic, Campbell held positions at Microsoft and Wunderkid. He’s a graduate of the University of California at Berkeley.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I have a rather unconventional background. I grew up on a ranch in the Mojave Desert, but always had in the back of my mind that I wanted to do something different. I was focused on creative pursuits– I thought I’d be a novelist or musician. But my entrepreneurial side was developed at a very young age. I always had a side hustle, from creating a rock museum and charging entry fees when I was seven to burning and selling CDs when I was twelve during the Napster era. After college, I moved into a cabin in Northern California to write what was supposed to be the next great American novel and spent a year and a half completely cut off from the outside world– no phone or Internet! After that experience, I realized that what I really wanted to do was to pursue entrepreneurship. I loved setting my own hours, setting my own vision and executing against my own strategy (and not having to do things because people told me to do them).

I made the decision to re-enter society and explore how to realize this ambition. It was suggested that I look into joining the tech world and to pick a product or a sales role to pursue. I chose sales and that opened the door which ultimately put me on the path to true entrepreneurship.

What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?

I knew from my early days in the startup universe that there was something broken when it came to procurement. We were selling to procurement teams that were totally lacking the enablement to execute transactions. On the sales side, our team had all sorts of tools that we relied on, which actually circumvented the procurement process, but most of the procurement staff I met with were still using a pen and notebook. I thought there was a tremendous opportunity for disruption.

When I became a Global Manager at Microsoft, I witnessed what happens when a company gets locked into contracts that they no longer need, and more importantly, can no longer afford. Vendors truly have the upper hand in the procurement process– there’s a huge imbalance between the buy and sell side. Ultimately, this company had to lay off a big chunk of their staff because they couldn’t cover the cost of their contracts. At that point, I realized the material human impact of procurement gone wrong. And given that every company on earth needs software, it’s virtually an endless addressable market. I gave notice that same day and knew that I was going to start a company to solve this problem.

Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?

I’ve been fortunate enough to have a lot of mentors, but the most impactful one was my father, who passed away 10 years ago. When I was young, he launched a business out of his home office. Although the business ultimately failed, he taught me that failure is an essential part of the journey. He instilled in me the notion of rejecting the status quo and encouraged me to pursue a dream world for myself without limits. From my father, I learned that if you don’t stop trying, you can achieve anything you set your mind to.

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

At Tropic, our people are our competitive advantage. It starts with the balance that my co-founder Justin and I bring to Tropic. Justin is one of the best operators I know, and a great balance to my creative side. We hire exceptional people with a myriad backgrounds, including artists, Uber drivers, musicians, bartenders and teachers. I’ve even been a bunch of these things myself. What this has done is create a powerful culture of dedication and success.

We have product differentiation and strategy differentiation, but it’s our people who really make us stand out. For example, one of our SDRs, Charles, came to me with an interest in social media. We let him take over our corporate LinkedIn account and he produced a series of very on-brand memes that grabbed a lot of attention and that continue to deliver inbound leads. I believe that by giving everyone a chance to make an impact, our impact is significantly larger than it would be otherwise.

How have you used your success to bring goodness to the world?

We open up donation opportunities within the company, particularly when there are large issues that need to be addressed. My co-founder and I match employee donations personally.

I tend to share personal thoughts and feelings about company building and my own journey of entrepreneurship. I think there’s a form of goodness associated with this. There’s a misconception that as a founder you have to be stoic and dispassionate, and I do my best to dispel these myths by candidly sharing my own struggles and learnings on topics like imposter syndrome, managing work-life balance and fears about parenthood (I have a baby on the way). I think that humanizing leadership and exposing vulnerability enables other people in similar positions to get the release they need, and that’s something I take very seriously.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

1. Flexibility: In early 2020, COVID destroyed every company’s ability to source new software tools overnight. This was just after we finished building a software platform that made it easy for procurement teams to manage sourcing events. When the pandemic hit, we had customers reaching out and saying we couldn’t work together in the way that we had planned for the foreseeable future. But they were still looking for ways to renegotiate their contracts because of lost headcount and budgets. To address their needs, we built a new add-on to our core product in a matter of weeks that helped them do just that. This was a very of the moment problem and our flexibility and nimbleness catapulted our business.
2. Decisiveness: I place a premium on fast and convicted decision-making. I tend to make very important business decisions when I reach 60% certainty. Our philosophy is that it’s better to bet big and fail than it is to worry about the data and lose market advantage. We built a set of critical management functionality into our platform at a time when the market demand wasn’t there– when nobody in the space was even thinking about it because I had a sense that the market was going to move in that direction. As a result, it did and six months later we had the first mover advantage and we were able to deliver a holistic platform sooner. That would not have happened without decisiveness.
3. Strong delegation: Too many early stage founders hold on too tightly and manage too much. I think for a company to be successful, the opposite must be the norm. You must hire people who are better and smarter than you are, and then get out of their way so they can flourish.

Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?

When I was in my first VP level position, a senior leader told me that as I moved up I needed to implement a “command and control” leadership style. I took that advice and ended up losing half of my team because I was micromanaging them and not giving them the freedom to do the things that they were good at. Today, I lead through empowerment and delegation to ensure that I prevent obstacles rather than becoming one.

Can you tell us a story about the hard times that you faced when you first started your journey?

Nothing compares to being a new CEO when COVID-19 hit. I remember seeing a cartoon that likened being a CEO during COVID to building a house with legos on a moving treadmill. We had to uproot all of our processes, our business model and part ways with some really talented people. I was working 12-hour days during lockdown while selling investors and potential employees on our dream during a global pandemic. To say getting mindshare was a challenge is an understatement.

Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?

As it was for many, this was an extremely taxing time on my mental health. It sent me to a truly dark place. What I learned is that having drive doesn’t mean you have to feel great, it just means you have to show up. And I learned that showing up, even if you’re feeling terrible, is a critical leadership skill. You don’t have to feel okay to do great things for the business.

I also decided to lean into healthy behaviors to make my mental and physical health a priority. For example, I spent a lot of time meditating, going to therapy, seeking out executive coaching, exercising and cooking. I continue to do all of those things today, making sure to carve out time for them, even when it feels like there are not enough hours in the day.

The journey of an entrepreneur is never easy, and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?

One of my favorite mentors once told me that whatever it is, it’s never as bad or as good as it seems. I go out of my way to temper both success and failure. I gain perspective through spending time with my wife and spending time in nature (Central Park, these days). And when I’m having a really bad day, I add one more activity to my coping strategies: I go and get an ice cream cone. I try to remind myself that the work we do isn’t life or death– there are simple pleasures everywhere. I also find that disarming the crises you deal with gives you the wherewithal you need to address them because if you’re in the state of “the sky is falling” it’s really hard to think strategically.

Let’s imagine that a young founder comes to you and asks for your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?

I’m super biased, but I think if you look at the market, particularly in tech, you have to take the money. If you come to market with a really great idea, others are going to notice and the market will quickly become competitive, and the last thing you want is to be caught flat footed by a well-funded competitor. VC funding is still the necessary nature of the tech ecosystem.

Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.

1. Tenacity: This is the key differentiator for the startups who make it. They keep going no matter what. We had countless investors telling us our idea wouldn’t work and now I’m constantly fielding calls from investors who want in. You have to keep your head in the game and believe in yourself.
2. Flexibility: You can have strong opinions, but hold them loosely. Founders can make the mistake of falling too much in love with their first idea. Just because it’s a good idea and you can convince others to join or fund you, it doesn’t mean you have product-market fit. You need to be willing to check your ego at the door and stay flexible as you get feedback from the market.
3. Lean Approach: Until you have product-market fit, keep your cash burn as low as possible. Hire as few people as possible at the beginning. Too many try to do it all before they come to the realization that they’re scaling the wrong idea. They wind up out of money and hurting relationships. Keep it as lean as possible. I built and coded the first iteration of our product myself and then executed post-funding with three to five people until we found our product-market fit.
4. Amazing talent: This is an area where it can seem really easy to compromise, but you must set an extremely high bar and never waiver. No matter how long a job sits open, it’s a huge mistake to just fill it with the wrong person. This is maybe the most important difference between success and failure.
5. Operational excellence: I’m lucky that my co-founder is very operationally minded. We invest in processes early. For example, we brought on a revenue operations team significantly earlier than I think most companies would, and that gave us the critical building blocks we needed to scale and succeed. Our investment in operational excellence definitely set us up to succeed in areas other companies ran into brick walls. It was great to have that powerful operational backbone in place early on.

What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?

The number one thing is don’t fall in love with your first idea and allow it to sink the ship. Pressure test your ideas in the market, get feedback and let go of your ego. It’s way more important to be successful than right.

Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?

It depends on the stage. If you’re just starting out, you won’t have work life balance and your mental health will take a hit. This just can’t be avoided and you have to deal with it the best way you can for that moment in time. You have to be all in and it’s hard– there are no shortcuts to starting a company. But once you get through that very early stage, then you’re no longer in charge of everything and you have a team who can execute with you. From that point on, it’s important to set the right example and part of your responsibility as a leader to take care of your mental health.

Invest heavily in your own physical and mental well-being. Whether it’s exercise, eating right, meditation or spiritual connection, find what works for you.

You are a person of great influence. If you could start 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. :-)

Based on my unique experiences, I would love to champion mental health awareness for founders and the broader business community. I think this is a hugely underreported area where most are struggling in silence. I’d love to help foster a greater community around that.

We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment 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, and why? He or she might just see this if we tag them.

Definitely Barack Obama (and I hope he reads this). He was the CEO of America, but he still made time for his family. I’m about to become a father for the first time and I’d love to hear how he balanced the weight of the world while still being present for his family. I’d love to pick his brain about how he accomplished that and get his practical advice on managing his high-pressure presidency.

How can our readers further follow your work online?

If you want to know what’s top of mind for me, please follow me on LinkedIn.

This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!