“Be Resilient.” With Charlie Katz & Kison Patel

The number one principle that guides us through the ups and downs of running a business is resilience. We aim to really embody that as part of the company culture and be able to take situations, like with the current downturn, and really look for the opportunities in that downturn to take our setbacks and […]

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The number one principle that guides us through the ups and downs of running a business is resilience. We aim to really embody that as part of the company culture and be able to take situations, like with the current downturn, and really look for the opportunities in that downturn to take our setbacks and bounce back from them, knowing we’re always going to come back bigger and better.

As part of my series about the “How to Navigate and Succeed in the Modern World of Finance”, I had the pleasure of interviewing Kison Patel.

Kison Patel is the Founder and CEO of DealRoom, a project management software for complex financial transactions. Kison has over a decade of experience as an M&A advisor and developed DealRoom after experiencing first-hand a number of deep-seated, industry-wide inefficiencies and challenges. Through developing technology, educational content and industry training, Kison aims to bring better process solutions to an industry with growing market pressures, transaction values, and competition.

Thank you so much for your time! I know that you are a very busy person. 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?

Ispent 10 years as a mergers and acquisitions advisor running a boutique practice called Transatlantic Investment. It was in this experience that I saw a bunch of challenges around managing an M&A process. During the recession, I saw a big trend with project management software that was getting adopted in various industries and thought that eventually billion-dollar M&A deals wouldn’t be managed on Excel. That prompted me to go after my dream of building the greatest software to manage M&A transactions, which led me to start the company DealRoom in 2012. It was a few years later into that journey, around 2016, where I started a podcast called M&A Science to create a platform allowing industry practitioners to share their lessons learned from their experiences. Then, around 2018, I published a book called Agile M&A which introduces a project management framework to the industry so other practitioners can benefit from these best practice lessons around managing M&A transactions.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

One of the funny mistakes I made was when I started my consulting practice. I left the firm I was with, but didn’t really tell my boss in a clear way that I was leaving the firm to start my own practice. It ended up with a confrontation that was rather unpleasant. The lesson I learned from that is to have tough conversations early so you can save a lot of grief later on.

Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?

One of my favorite books is called Just Listen by Mark Goulston. This book is all about empathy. It teaches you to develop a certain mindset and to practice connecting with people in a way to make them feel understood. To me, that is one of the most valuable skills as a person and leader to develop in order to help guide you through tough situations and understand others. It applies to everything from dealing with difficult people in general to within your own family situations.

Are you working on any exciting new projects now at DealRoom? How do you think that will help people?

The new project I’m most excited about at DealRoom is search technology. We’re creating technology to allow a person to be able to compare several similar documents with each other and identify what’s unique between those documents. This is particularly helpful for a person who has to review sets of customer contracts or employment agreements that are often very similar to each other.

Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?

My vision and purpose have always been centered around improving the M&A process. A lot of companies focus on the details of automating, scaling and using AI technologies. For us, the focus and challenges we often see and identify with are related to people. Our view is the industry needs better collaboration to make deals more successful. So when we look at improving the M&A process, it’s through improving collaboration.

Do you have a “number one principle” that guides you through the ups and downs of running a business?

The number one principle that guides us through the ups and downs of running a business is resilience. We aim to really embody that as part of the company culture and be able to take situations, like with the current downturn, and really look for the opportunities in that downturn to take our setbacks and bounce back from them, knowing we’re always going to come back bigger and better.

I have a thing where I ask my daughter, “What do you do when you get knocked down?”. She’ll tell you to get back up. That’s exactly what you have to do. We have to get back up. So anytime we do something new and it doesn’t work out, whether it’s riding a bike, making a smoothie, I look at her and say, “You got knocked down. What do you do? Get back up.” It’s all about resilience.

Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?

Probably the most important underlying strategy for us is developing quality educational content. When we do this we really spend the time to research and find the subject matter experts. One of the strategies we use to identify those folks is LinkedIn. By utilizing LinkedIn, we’re able to get a sense of different people, identify them, and reach out to them. You can also tell how proactive they are on LinkedIn to get a sense of what type of content they are creating and how they are positioning their personal brand. So that’s often been a good way for us to be able to research people and see if they would be a good fit for the content we’re creating.

If a fellow CEO would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?

Now, this is a tricky question because there’s a lot of external factors to review and think about in terms of the market positioning, the potential, scaling the business and so forth. I would make a list of what those factors are in order to weigh the pros and cons. Then from there, I think it’s just as, if not more, important to look at the internal factors — what actually drives leadership’s capability?

I’ve seen enough businesses that had the right market opportunity but the leadership just didn’t have the capabilities to be able to execute with those resources. Even as a leader and CEO, I have limitations and need to be aware of what my strengths and weaknesses are and where my capabilities actually lie. So I look at it and take those different segments of pros and cons. But look at them from both the internal and external aspects to really weigh if a company should bootstrap or look at raising money outside to scale.

What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?

I would steer away from jumping into one specific valuation model or criteria and instead really try to think of the strategy and get a sense of the value of the business to the acquirer. Try to get into the lens of the acquirer because that value varies dramatically entity to entity. Every company is going to have a different view of the value of your business, so you have to think dynamically in terms of what kind of outcome you’re looking for. Do you want it to be scaled in part of a large organization and platform or are you simply looking for somebody to continue the legacy?

What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?

I think the first thing I would do is review their strategy or suggest reviewing strategy for inorganic and organic growth opportunities collectively with your team. I’ve learned time after time that the best growth ideas don’t always come from the top. You don’t know where they’re going to come from. It could come from the new guy, it could come from the intern. It’s not always from the senior leadership that’s been there forever. Take some of those challenges your company has and encourage your team members in a broader perspective to bring some of these new ideas.

We do quarterly meetings. In these quarterly meetings, however, it’s not as much to address the new initiatives to everybody. It’s more of an opportunity for team members to speak up their ideas, to grow the business. So that’s what we really want to encourage them to do is bring three or four new ideas to the table. You’ll be surprised when you can do that and really open up your ears and listen. A lot of the strategic advice that you could possibly want is all under the hood. You just have to be open and create a platform for those in your organization to be able to speak freely and share their voice.

Along with that is to watch out for stagnation in hiring. You have to continuously be very proactive in the way you hire. Meaning, you should be hiring and firing. As you bring in new people, look for talent and skills that bring new ideas. There are people that have obviously been in the organization, but if they’re not creating value and that high score rating, then you should consider moving them out of your organization. The strongest organizations I’ve seen have been very proactive about both hiring and letting people go. That’s just part of a business cycle for an active company that’s continually evolving and growing.

What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?

The biggest finance mistake I’ve seen companies make is not validating ideas, products, or services. It does end up coming back to financial benchmarks. What I realize is a lot of companies take a stab, or an assumption, about go-to-market and they don’t really take the time upfront to validate it. I think the biggest mistake that organizations make is developing a go-to-market plan but don’t actually validate it with the cohort of customers that are there. Your R&D team has probably had conversations with those customers and had that feedback loop to develop the product or service. They’ve done that through cycles to the point where they felt comfortable to take the product to market. Nobody has really taken that same approach to validate the go-to-market. There should be the very same approach and feedback loop to develop that go-to-market that comes from that cohort of potential customers to drive the success rate when you actually go to market. So make sure you develop and have this continuous feedback loop with your customer, not only for product development but also for your go-to-market aspects as well.

Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.

The first one would be resilience. Being able to bounce back and come back is one of the key things. I mentioned this jokingly with some peers that our company DealRoom should’ve gone bankrupt. The business was completely stagnant for the first five years of operations. Very few customers, very much of an uphill battle to get people to utilize a project management tool instead of Excel to manage a process. We kept pushing through even though at the time it didn’t make a lot of financial sense, but we kept pushing through. Now over the past few years we’ve seen a tremendous amount of growth where that change curve is now hitting and we’re at the very forefront of it. Through that experience I’ve learned giving up is the number one cause of failure.

I would say another important skill is being bold, and to look at that as an internal muscle you develop to have a level of discipline and risk tolerance so that you are able to do things you were otherwise uncomfortable doing and taking risks you’d otherwise be comfortable taking. I think that’s a type of mindset you develop to get better and stronger over time and really push yourself to be a bold organization.

Another important skill is being dumb. We tend to be in the marketplace, find our area of expertise, and learn with a goal of becoming an expert. Then we go to meetings and want to make a good impression, to come across like we know what we’re talking about. The value, however, is really in the conversations you have with people. By being dumb, you become more open and receptive to what others say. You really listen and learn from them. If you can, put aside all the things you know and want to impress people with (or when you’re talking to people and you’re thinking about the next thing you want to say). That’s where you can find opportunities to help others. When you focus yourself on helping others achieve their goals, that’s where you can progress a lot further.

Another skill I touched on earlier was about empathy, being really empathetic with people and making them feel felt. I think for me I learned this skill by getting into a leadership role. It’s been one of my greatest successes. This is a skill that allows you to be more versatile as a person because you’re able to connect and understand people at different levels and put yourself behind the lens of different people to see how they look at things. Oftentimes we sort of get focused on one lens and we may not be seeing the whole picture. Until you get that connected view, that full view, it’s difficult to make the right decision.

The other skill I would add is agility. Driving your organization to be agile is critical in this time. You want to develop a culture that’s very flexible, responsive, collaborative, and that continuously improves to be able to respond to a fast moving world. It starts with leadership being able to embody that kind of culture into your organization. Then from there, you have to find ways you can actually standardize it through the organization so everybody’s acting in the same way.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

Probably the top tip I would suggest is to exercise your mind and your body. Take trips in order to break up your daily routine. Put yourself in a different environment so you can look at things in a different way. For myself, I personally like exploring other industries just to be able to see some ideas that have worked really well in other spaces and see if there’s an opportunity to bring them into my industry. Sometimes I listen to a podcast I may not normally listen to, just to hear some different ideas and perspectives from a totally different industry.

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. 🙂

The big influence I’d love to put out there is inspiring others who have achieved a level of success to share their life lessons so we can inspire and develop a stronger next generation of leaders. I think from having children myself I learned there’s things the school system doesn’t prepare them for and there’s a lot of things you only can learn through life experience. If we can take those lessons and provide it in a platform aspiring youth can learn from, I think that’s great. A lot of times, we think about philanthropy and it’s always about making monetary donations, but I think there’s an opportunity to contribute time to share these life lessons to educate and inspire this next generation so they can achieve their goals and create a better society going forward.

How can our readers follow you online?

I host a podcast called M&A Science that’s available on most podcast platforms. Otherwise, they can follow me personally and our company DealRoom on LinkedIn.

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

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