Why You Can’t Do Business 50/50 With Your Friend: With John Lauer
By Yitzi Weiner and Casmin Wisner
“We wanted to come up with a fun way to show what texting is capable of doing, so I used my robotics knowledge and built the world’s first text-enabled espresso machine.”
I had the privilege of interviewing John Lauer, the co-founder and CEO of Seattle-based SaaS provider, Zipwhip. The company modernizes the texting medium by adding text messaging to existing landline, VoIP and toll-free phone numbers and just recently announced $22.5m Series C funding round.
Thank you so much for doing this with us! What is your backstory?
I’ve always wanted to be an entrepreneur. When I was 13, I asked my dad how I could make money, and he told me to find some way to make my own business. So I DJ’d school dances and grad parties, and mowed lawns. These were the few paths you could make money as a kid in the 90s. Later in life, you just figure out more sophisticated ways to make money.
I went to college for computer science and business, because I thought that’s what I needed to become a successful business owner. But cut to three years later and only a few credits left, and I questioned why I was paying someone to teach me when I was so motivated to learn myself. I did most of my learning by sitting at the bookstore drinking free coffee refills for hours until I read the entire computer software and business sections. I learned more in the bookstore than I ever did in the classroom. So with no real money, and only $7,000 in credit cards, I got off campus, dropped out of school, and started my own business.
Can you share the funniest or most interesting story that happened to you since you started your company
We wanted to come up with a fun way to show what texting is capable of doing, so I used my robotics knowledge and built the world’s first text-enabled espresso machine. Some people thought we were kind of crazy, but it ended up turning into this huge, widely-publicized happening within the tech community. It received tons of coverage and generated a load of excitement across the Zipwhip office. Seattleites love tech and love coffee, so it ended up being a pretty fitting invention for our town.
So what does your company do?
Zipwhip is a Seattle-based software-as-a-service company that modernizes the texting medium by adding text messaging to existing landline, VoIP, and toll-free phone numbers. Zipwhip pairs direct network connectivity to the wireless operators with easy out-of-the-box software, so businesses of any size can give customers the choice to “text or call” from their existing numbers, and handle two-way text conversations at scale.
4. Yitzi: How have you used your success to bring goodness to the world?
I wouldn’t say that at this point I feel totally “successful.” For me, there’s a long way to go until I officially reach that milestone. However, I’d say that I use the success I have achieved to educate other entrepreneurs. I love to attend local CEO groups where I meet other entrepreneurs and share war stories. Connecting with others and teaching lessons learned is incredibly fulfilling to me.
While I’m super passionate about helping other entrepreneurs, my favorite way to give back is by working with kids. In the past, Zipwhip has invited juniors and seniors from local high school business clubs into the offices to talk about how to run a business, and what that entails. It’s great to see young adults engaging, asking questions, and being genuinely interested in what it takes to run a successful business.
What are your “5 things I wish someone told me Before I Launched My Startup,” and why?
- Don’t do a business 50/50 with your best friend. The first thing you learn is a 50/50 ownership model doesn’t allow anyone to overrule the other, which is sometimes what you need in a successful startup. If you and your co-founder are both 50/50 shareholders, small disagreements can’t conclude and there is no clear path forward. I wish someone had told me that you must have differences in ownership and hierarchy when it comes to decision-making.
- You must set expectations correctly. This is one of the earliest lessons I learned. If you bring employees, investors, or partners in and promise them the sun, moon, and stars, they eventually get upset when you can’t deliver. In overselling yourself and your company, you’re setting yourself up for failure and resentment.
- Organization charts are a necessity. I’m of a new generation that does business differently, but it took me years to learn that more old school things like organization charts are really important. For instance, I used to let people pick their own titles. At my first startup, I hired a project manager who gave herself the title “coffee girl.” I came to realize that was simply too playful and it didn’t let others know exactly what she did and what department she was a part of. I wish I’d known that things like organization charts are around for a reason. Everyone needs to know what role they’re playing and everyone else needs to know it too.
- You need to be willing to give up partial ownership. Raising money for your start-up can sometimes feel like you’re always suffocating trying to get enough. When I was just getting started, I wish I’d known that you need to be able to give up control and sell shares of the businesses to investors if the opportunity presents itself. For your first start-up, you don’t need to be so staunch about owning 100 percent of the business. It’s natural to want to control your own destiny, but 100 percent ownership of the business isn’t always the answer. Give yourself oxygen in the form of cash, but make sure you don’t spend it too fast.
- Don’t get distracted by the next shiny thing. Moving on from one idea to the next too early is the curse of the entrepreneur. Most entrepreneurs love the idea of creating things that solve problems, but they’re not willing to focus their attention on that single problem until it’s fixed. I wish someone had told me that I needed to be realistic about how long it takes to solve just one problem. In my career, I’ve seen many people give up because they’re trying to do too many things. Staying focused and not getting distracted by the next shiny object is the way to go.
I have been blessed with the opportunity to interview and be in touch with some of the biggest names in business, VC funding, sports, and entertainment. Is there a person in the world whom you would love to have a private breakfast or lunch with, and why?
That’s easy — Bill Gates. Bill was a huge inspiration for me to get into the technology space. He combined his computer science expertise, general knowledge, and entrepreneurialism to create one of the most innovative and successful companies of all time. He also did it at such a young age — he basically just left school and made things happen. Great timing was a huge part of his success, but he also knew that he had to seize the moment. He drew from his software background and honed in on the product to make sure Microsoft came out on top.
This was very inspiring. Thank you so much for joining us!
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