Access proper market- What I’ve often seen as well as folks don’t address really is a viable market for their product or solution. They might have a great idea or they’ve got some problem that they are looking to solve, but the market just isn’t big enough, or the problem being solved just isn’t compelling enough to be successful.
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 Jonathan Cogely.
Jonathan Cogley, founder and CEO of LogicBoost Labs, is a serial entrepreneur who has launched, operated and sold many successful ventures over the past two decades. Among his responsibilities, Jonathan is first and foremost a mentor and problem solver for the early-stage, business-to-business software-as-a-service startups that compose LogicBoost Labs’ portfolio companies. Jonathan created LBL to accelerate growth for SaaS B2B startups where cohorts are given the opportunity to grow and prosper through mentorship and strategic know-how.
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. What was the “aha” moment that led to the idea for your company?
Thanks for having me! I’d say that moment came when I realized that BarPay, one of our current portfolio businesses, required more than just a little bit of mentoring and capital
It occurred to me, in order to wield the impact desired, there needed to be a team of experts who can help our portfolio businesses make a profound start.
For instance, BarPay needed sales help. Currently, Michael Millstein, our current VP of Sales, was working with BarPay in an advisory capacity, but I felt that was not enough. BarPay needed help with their sales pipeline and to make that happen, I wanted to do something that not a lot of accelerators do. I wanted Michael to become a member of our LogicBoost Lab’s team and his job would be to spend as much time with our cohorts as possible, up to six months if necessary and provide the mentoring and guidance required to get the job done.
That is when we came up with the framework for our fractional hiring practices — having a fractional VP of Sales or if needed, a fractional CTO. I realized then that BarPay also needed help on the technical side as well and so that is what led to the job role for Chris Staszak, our LogicBoost Labs CTO.
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?
Definitely! My dad worked in business for years and years, although I wouldn’t say he’s a natural entrepreneur. In his last business before he retired, he started his own company and employed maybe five or six people. He is a really smart guy who has helped me a lot and still continues to help me today. If I have a tough question I’ll often call my dad and say, hey what do you think of this? So I think my entrepreneurial journey was definitely inspired by him. I grew up in South Africa where it’s fairly common to be an entrepreneur and run your own business — you could be a plumber or own a store — whatever. Just that idea of working for yourself — being your own boss — is something that I’d seen many times and really resonated with me.
Okay, what do you think makes your company stand out and you share a story.
There are lots of incubators and lots of accelerators, and I think what makes LogicBoost Labs stand out is just how intimate we are with our portfolio companies as we really get to know the people as well as the business we work with very closely. I think that only works because LogicBoost Labs only takes on a small number of companies, and because we have a full time team who can help them out with sales, marketing, customer success or technology.
When it comes to other incubators and accelerators — they often have mentors that don’t actually work full time — they just donate a few hours — they’re really consultants. And that’s not our model at all as we have a stable team of experts, who get so involved in our portfolio companies — we really help them to be successful. And the journey is longer too. The usual relationship with a startup, and their incubator/accelerator is usually six months, whereas we plan for two years. Our goal is to take our portfolio businesses from $0 to over a million ARR. That is the kind of journey we take them on.
Have you used your success to bring goodness to the world?
It’s always tough to really look at intrinsic motivation, but I’d say, through my professional experiences the one thing I love that I think makes the world a better place is problem solving. When I think of my old company that I used to run, Thycotic, the purpose there was password management for IT people and I believe we made their lives more pleasant and the product definitely secured the world from many breaches and heartache. I also look at it like this — I created an environment where people like to come to work and we created hundreds of good jobs. We also helped solve a lot of security problems and made the world a safer place.
Which three character traits do you think are most instrumental to your success.
I am a big believer in core values for your company. Finding attributes — typically of yourself as the founder — that also give you a strategic advantage in your industry. The personality of your company echoing the personality traits of the founder.
- I have always believed in team building and frequently play the coaching role. This really resonates with the younger generation who are looking to learn. So give them tools, training and coaching to learn the business, allow them to improve their skills and then give them responsibility. This will attract the younger talent and will keep them.
- Hard work is key. I don’t know anyone in my personal circles who has achieved great success without incredible hard work. Sure, you need luck too at times but putting in the work and consistently showing up is going to give you more chances to get lucky. In startup terms, we often call it “grit” and it takes grit to succeed. People say work smarter not harder but no — do both — work smart and hard.
- Learning is a lifelong endeavor and the best people at their jobs are always learning. We discovered this to be a key factor in retaining software developers. They want to learn so you provide an environment where they can learn and improve their skills — this can be through pair programming, team environments and even brown bag lunches with presentations by team members. But I think learning applies to other careers too — take sales — the world is always changing and a successful salesperson needs to keep improving their skills, learning how to ask better questions, learn about the changing technologies in their industry.
Leaders are asked to share the best advice I’ve ever received. Can you share a story about advice you received that you wish you never followed?
I’ve heard this advice many times and I disagree: People recommend that the CEO be the primary salesperson in a small startup. That’s a common situation as many in startups will stipulate, ‘‘you don’t need to hire a salesperson, you should be the salesperson as you are the core of the business.’
Here is my advice to startup CEOs: As long as you understand where your company fits in in your industry and you know what your sales process should look like, as well as what the key use cases are and why people find your product or service compelling, then you should hire a dedicated salesperson. This is important because the sales staff can focus on sales 40-hours a week and a CEO could never focus on sales for that many hours as they get pulled in a million different directions.
So, your business will never grow if you follow that advice — you must have dedicated talent for sales!
Can you tell us a story about the hard times that you faced when you first started your journey?
Sure! For most startups, the hard part is usually cash flow as I think it is what affects most entrepreneurs. So just balancing the risk of your company in terms of having enough business to invoice and enough to meet the cashflow needs especially once you have a growing payroll. You have to be prudent with expenses and ensure you have a steady flow of work. I learned this in my first business but it was easier because it services being paid hourly for work — so as long as I kept my expenses low and stayed busy — then I could make a profit and keep the business going. My early days of doing this were hard but they prepared me for later stages in my entrepreneurial career.
Can you share a few ideas or stories, about how to successfully write the emotional highs and lows of being a founder?
Yeah, I would say having mentors or folks that you can chat with — contemporaries or other founders is helpful in dealing with the highs and lows of being a founder. These people do not need to be in the same industry as you, actually it is probably better if they aren’t — as they can offer up a new perspective. But I would say that what helped me a lot is that I used to go to a round table, where there were a whole bunch of business owners from many different industries. It was really diverse.
I’d also add that the role of a single founder is definitely a very lonely road. You can’t always have those types of conversations with your staff, because they’re often the ones that you’re struggling with. So just having some outside folks who understand the journey that you’re on, whether that’s a mentor or whether it’s just someone you have lunch with every two months, is super helpful.
A young founder comes to you as your advice about whether venture capital or bootstrapping is best for them. Can you kindly share a few things that founders look for to determine if fundraising or bootstrapping is the right choice.
I have written about this topic before.
I definitely recommend bootstrapping! If you can get enough money together and pay for what you’re doing, then bootstrapping is the way to go when starting out in business. Obviously you don’t want to quit your day job right away. And if the business can’t generate enough money, then you’re going to need to raise capital to do it. Since it is your business, you will want some control — which you will have if you are bootstrapping it. If you have angel investors, and spend their money, then the control is not entirely yours — and you will then have to work with them on goals for how to run your business.
Ultimately, I recommend bootstrapping for as long as you can. In my case, I was able to bootstrap all the way to $10 million in my first company — so it’s possible!
Okay, from your experience, 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?
1. Have a strong team — having the right team is absolutely critical. That’s probably the number one factor I look for such as, who are the people involved, do they have an appetite for risk? Do they have grit, do they have that persistence and work ethic to try and try and try again to get the right formula to be successful?
2. Access proper market- What I’ve often seen as well as folks don’t address really is a viable market for their product or solution. They might have a great idea or they’ve got some problem that they are looking to solve, but the market just isn’t big enough, or the problem being solved just isn’t compelling enough to be successful.
3. Timing- Is the market ready for this product? Sometimes startups are too early and the market is educated enough yet for the startup to be successful.
4. Competitors- Are the competitors in the space likely to be too challenging? If there are no competitors this raises the question of whether it is a real problem that customers experience and also means the company is likely to have to do some customer education to get business.
5. Idea- Figure out if the startup idea solves a real problem that the customer will pay for (or some variation on this, depending on your business model). There has to be a solid path to revenue. Revenue is the ultimate market validation!
What are the common mistakes you have seen CEOs and founders make when I start a business, What can be done to avoid those errors.
The first thing that comes to mind is not having leadership on the sales side of the business. I highly recommend hiring proficient salespeople , it’s vital to the success of startups!
Also sometimes founders have a tendency to hand out lofty titles. For instance, they will hire an employee and instead of making them just an account manager, they’ll make them VP of Sales. But are they really the VP of sales or are they just the only salesperson? They will then have a problem in the future when they hire a real VP of sales since the previous person is going to be demoted and will likely quit. Rather give staff the appropriate job title for their experience level and job responsibilities.
Here’s a fun one, what would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
Well if I’m honest, I personally didn’t do it very well. However, I do have better advice for other people. My wife’s a nutritionist, so one, marry a nutritionist! But in all seriousness I’d say, eat right! I used to do a lot of take out for so many years when I could have eaten much healthier and my body would have felt so much better. I do that now and I feel a huge difference! So recommend that founders get plenty of physical exercise (book a workout into your calendar at least every 2–3 days) and eat well.
Secondly, manage your calendar better! If you manage your calendar and block time off for yourself, whether that’s going to the gym, or eating, that will help your well-being. If you don’t protect your calendar, your time will just get taken over, especially if you’re in a growing business and you’ve got a smart team who are doing their own things, but they’re always going to need your help. I found, if I wasn’t careful, my calendar would just be back to back for 8–10 hours a day and doing that over a long period of time is going to lead to burnout very quickly. My calendar now includes scheduled breakfast, lunch and breaks otherwise all my available time fills up with meetings.
If you could start a movement, what would bring the most amount of good, the most amount of people, what would that be? You never know what your idea can trigger, and this is what I can say that you can either think about or even possibly skip if you want.
I think the renewed interest in STEM in recent years is very encouraging. We probably need less people focused on the stock market, legal field and social media. Maybe more STEM folks focused on global warming, feeding the world and making our planet more sustainable.
I do think that critical thinking is terribly important along with a focus on problem solving. Entrepreneurs have tremendous potential to tackle these problems and create innovative solutions to the world’s problems.
Is there a person in the world, in the US with whom you’d love to have a private breakfast or lunch with and why he or she might just see this, and we’ll tag them.
Probably any of my grandparents — I was too young to know them before they all passed away. That would have been an interesting lesson in family history.
In terms of business luminaries, probably Elon Musk. He is a fellow South African, we only live a few hours apart on the West Coast and he is quite remarkable. I read one of the biographies on him and found it very inspiring that he achieved financial success and then used that money to start pursuing his childhood dreams (electric car, space travel). This in part also pushed me to start the LogicBoost Labs accelerator as a means to help others see their dreams come true.
I don’t have anything like Elon’s endless work ethic, thirst for knowledge or will to change the world.
But we would probably have some things in common and have a good chat as entrepreneurs albeit with very different levels of success!
How can our readers further follow your work online?
To find out more about LogicBoost Labs you can visit our website at logicboostlabs.com to read our blog about startup advice or even apply to the next cohort of our B2B SaaS startup accelerator for funding, mentoring and expert help.
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!