Michael Dell confidant and mobile device launch expert shares why he left lucrative Corporate America to found a risky bootstrap startup and succeeded
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“One of the things I’ve learned is you have to look for something that can scale early on. Otherwise you have to have add bodies which is an element of my current business. We are working around how we can scale our revenue even though we have a variable cost model.”
Power of One Relationship
“If you don’t have something that can scale early on, then you want something that if you hit one relationship it will carry you forward.”
“We are investing in culture. It’s one of our top two or three initiatives. You have a spirit that drives you 24 hours a day and that you can’t turn off. Eventually you get big enough where you can’t be everywhere. You have to pray you have a culture that carries on your core values. It does not just happen naturally. You have to encourage and foster it.”
“Hiring people that don’t pan out. It’s hard to get around this unless somebody experience tells you need to be aware of it. As much as I’d love to say I’m an incredible interviewer and always get a players, that’s not the case.
“I was probably born counterintuitive. I never think about rules or the way things have been done before. I’m blessed in that. The other side of that is you get spread too thin if you chase too many things at once.”
Counterintuitive quarterly review
“We stop the company once-a-quarter and tell our people to go in an a room. They write out all of the task they’re doing that with some good guidance, somebody else international could do. And we pass those notes off to our international partners to implement. Now we’re that much more efficient to do higher-level stuff.”
Why Listen to Paul Kirchoff:
In the audio, Paul shares:
– How he’s implementing Topgrading in his company to attract top talent (because bad ones cost you 15 times their salary and may ruin your company culture)
– Paul shares the critical pieces on what he does to build his company’s culture
– How Angry Birds, cardboard forts and live music contribute to his company culture and the lesson you can apply in your business
– Why you have to wear your visionary hat and your implementor hat starting out, then how to hire those complementary players who do well what you don’t
– The one thing you should focus on starting out whether bootstrapping or working with VC money
– Bootstrapping — how to use corporate America as your “venture capitalist” and build your business while your main talent keeps their current jobs
Paul Kirchoff is the CEO and founder of SaleAMP, a pay for performance online marketing company covering everything from SEM, SEO, Social Advertising, Social Media, Mobile, Conversion marketing and more. Paul began his career at Dell, where he started many new lines of business including the Inspiron laptop product line growing from zero to $1.5 billion in its first year. After six years, Paul founded his own marketing software company that he eventually sold to the largest NASDAQ player in the industry.
SaleAMP’s clients have included: The Dallas Cowyboys, Carfax, Starwood hotels, Lenovo, the National Park Foundation, Beachbody, his former employer Dell Computers and many local, e-commerce, lead generation and B2B customers.
His background at Dell gave him strong experience bringing portable and laptop technology devices to the market place. Because of this experience and results he was recruited by both Apple and Amazon.
Apple wanted him to lead the division that would bring the iPad to market.
Amazon wanted him to lead the division that would bring the Kindle to market.
He’s not political but he is looking to rewrite the U.S. Constitution to be more contemporary. America operates like a broken business and Paul is looking to streamline how America operates.
He’s made a promise to himself to go on a two-week business hiatus. He’ll travel to where the original Constitution was penned. He’s going to update it for contemporary times and put it out in social platforms because he believes everybody should give their feedback to improve how America runs.
He believes this has to be done and somebody has to take the lead so it might as well be him.
When he was 13 he started a business and made more money over a summer than his dad did at his job.
He wrote a novel and sold 5000 or 6000 copies and gave all the money to cancer research.
He was one of the youngest people to get an MBA degree from the University of Texas.
He found rough sledding attempting to get a job in big corporate. A lady at Dell offered him a position and told him up front it was work he wouldn’t want to do.
He took the job to get the experience. He moved up in the company and had the opportunity to start several new divisions of the company. This was classic intrapreneurship. Before he was done he was talking over his ideas directly with Michael Dell.
He had the entrepreneurial spirit.
He felt like a hawk who needed to fly so he started his own business. He started a software firm and bootstrapped never taking VC money. He ended up selling the company to a NASDAQ traded firm.
In typical serial entrepreneur fashion, he took two whole weeks off.
Then he started SaleAmp which he’s leading to growth today. They have 65 employees in Austin and around 65 to 70 in various offices overseas. The future looks bright.
Paul is looking forward to the next chapter in the company’s upward growth and stepping out front to lead that growth.
Some Shareables from Paul in this episode…
Origin to growth
“There are two types of entrepreneurs. Some are expert bootstrappers. I’m in that group. They scrapped their way to a gravitational force and sustainable growth. Others are great promoters who know how to raise money.”
VC money versus no VC money
“It’s much easier to fail fast when you have money. Without VC money, It’s much more tricky to make all the right decisions so you don’t get killed.”
Pushing international economics
“I helped pioneer some of this during my early days at Dell. I don’t even think about business without international economics. I think about what tasks do I not have to do because there’s somebody overseas just as smart and has a different economic baseline. They can do it at a cheaper rate and still a gratifying standard of living. When you add all these up across your company you have structural advantages nobody else does.”
“When starting out you may have the capacity for 5 clients but you’ve got 10 knocking on your door. You’ll rush to increase your capacity because you don’t want to miss the revenue. Many times you’ll hire the best available which isn’t always an A player.
My mistake was not having a system to screen A players. This takes some of the interviewer’s judgment out of the equation. I’ve hired people in the ‘wrong seats on the bus’. We’re implementing the Topgrading system to screen where only A players make it to later interviews.”
“Hiring people like me. I’m the emotional cheerleader of the company. You have to round out your company with other types.”
“I am the embodiment of this. We keep it weird with the real-life angry birds and spontaneous nickel toss with beers in the middle of the day. At the beginning of South by Southwest we throw a party called the ‘Gangsters’ Ball’. This last one we had some Wolf of Wall Street style gymnastics. The fact is we invest in weird.”
“Early on we had a client who was about 50% to 60% of our revenue. They called us one day saying they been bought and we had to shut everything down within 14 days. That’s a tricky one when you don’t have sales people or a pipeline”
“We’ve had many of the top Internet marketers who have hundreds of thousands of businesses following them hire us to do things because we’ve got the marketing muscle. I’ve studied what everybody does but never paid attention to who anybody is. I was sitting next to two of the best-known marketers and they introduced me to a third named ‘Frank’. I said, ‘who is Frank?’
They looked at me like I was crazy.”
Bad conventional wisdom
“When you first start a business, one of the worst things you can do is what comes naturally to you. My good friend was CFO and the #3 guy in a growing $40 million a year company. He decides to start his own thing. I call him three weeks in and to asked what he’s doing. He tells me he’s installing an accounting system.
I told him that was ridiculous. He should have been focusing on sales and building a pipeline.”
Learn more about Paul Kirchoff:
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