Founders should focus on nurturing the team and idea and maintain a level of perseverance and patience for the right time.
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 Metz, founder and CEO of Prizeout. A career entrepreneur, he started his first company, Flugpo, in 2006 after a 10-year stint in private equities trading and hasn’t looked back since. Prior to Prizeout, he was most recently the CEO and co-founder of a mobile trivia app called FleetWit. David’s broad leadership experience in finance, marketing, and tech across both large firms and startups put him at the ideal intersection to lead an industry disruptor like Prizeout.
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?
Of course, thanks for having me! Out of college I got into finance and was a trader for 10 years. Coming out of college I founded an online classifieds site called FlugPo, and that was really my first foray into startups. From there I launched a series of companies, and the company that I started just prior to Prizeout was a trivia app where users could win real money by wagering on their abilities against their friends or random players. That company actually bore the idea of Prizeout because I needed a withdrawal option for whenever people won money, and nothing on the market really fit my needs in terms of speed, user experience, and cost.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
As my previous company grew its user base, we started offering a few different digital withdrawal options in-app and one of those options was a gift card mall of sorts. I was shocked by the amount of people who chose gift cards over cash without any added benefits, other than being able to commit their money to a certain purpose or store. Once I saw that there was a real hunger for this, I decided to capitalize where these gift card malls were sort of lacking: on UX, fast processing, and added value.
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 come from a family of entrepreneurs — my mom and dad started their own businesses, so even as a young kid I saw the realities of building your own businesses, both good and bad. I was possessed by the idea that I wanted to do that one day. I also figured out early on in my career that I had the personality where I wanted to control my own destiny and not be consumed in politics and personalities and such, so entrepreneurship just made sense.
What do you think makes your company stand out? Can you share a story?
Our growth from launch to this moment has been extraordinary. In our short history we’ve already partnered with some of the biggest brands in the world across a variety of industries including ecommerce, gaming, service, and payroll offering consumers an average of 11% more on every cashout. It’s the trust our brand partners have gifted us so early on that has given us the ability to grow so quickly.
How have you used your success to bring goodness to the world?
Bringing goodness to the world is at the center of Prizeout’s mission. 2020 had an unprecedented effect on unemployment, retail spend, and the accessibility of social support. In 2021, as our world begins to try and recover from the long-standing effects of COVID, we’ve gotten the opportunity to work with state and local governments in the UK and US to disburse government stimulus funds to the residents who need it most, while giving these residents the opportunity to spend those funds at local and family-owned businesses. In the process, we’re also able to offer support to underbanked individuals by operating with digital gift cards, something that everyone can use as long as they have a smartphone and access to the internet. Additionally, we have begun a partnership with Oneida County to incentivize vaccine adoption among citizens, offering $50-$100 in digital gift cards. We hope to continue these kinds of partnerships in the future.
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?
Perseverance, problem solving, and creativity. Perseverance is important when it comes to dealing with adversity and the inevitable lows — the pace at which my team and I can push through and look beyond those tough moments defines the pace at which we can grow. Problem solving and creativity go hand in hand, but again, are both differentiators when it comes to success. How can you continue to reshape and rethink a problem until it fits — your first idea is good but the tenth iteration of it is probably the one that will stick.
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?
I don’t have any regrets. Even if someone gave me advice that resulted in something bad it was a learning experience.
Can you tell us a story about the hard times that you faced when you first started your journey?
When I started Prizeout I was also running another company called FleetWit — closing down one company and starting another at the same time was not an easy task, but I was lucky enough to have amazing investors who trusted me and the team I had put together.
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?
It’s the little wins. It’s almost like playing golf — all you need is one hit and momentum begets momentum. As far as tips go, I’d say have balance. This is probably the hardest thing in the startup world. I always say this — there’s fitness, family, friends, and business, and unfortunately you can’t do all four. So, you have to give something up, and the important thing is to make sure the two or three that you keep are the ones that truly make you happy.
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?
If you’ve been doing this long enough, you always know the highs are high and lows are inevitable, but you have to recognize the moment. Many of our investors are people who have sold companies and all of them miss running the company, which tells me that it wasn’t as much about the pursuit of money, it was building something with a good group of people. So, I always try to take a step backwards and recognize what we’re doing. I want to surround myself with people who are going to enjoy the journey with me, regardless of the outcome.
Let’s imagine that a young founder comes to you and asks 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 think if someone’s never bootstrapped before — it’s not a money thing, but you need to get your Bachelor’s before you get your Master’s, right? And your Bachelor’s is bootstrapping; your Master’s is VC. Everyone needs to understand bootstrapping. It gives you an appreciation for money and funding that you would not have if you’ve never bootstrapped before.
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.
For me it boils down to three factors, actually: Timing, Team and Idea, and you need all three to be successful.
I’ve seen great ideas with toxic teams that are poorly executed. I’ve seen great minds get together with all the right elements and the wrong market fit. So, you need to make sure you have both of these elements — team and idea — in place before you move forward.
The timing, of course, is somewhat uncontrollable. The only guarantee is if you continue to push ahead, the timing will align at some point. For example, right now is an unprecedented time for fundraising. If you had a startup in 2008 you would have had to stick it out for a few years before the funding would’ve come. Timing is hugely important, but it also ebbs and flows. Founders should focus on nurturing the team and idea and maintain a level of perseverance and patience for the right time.
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?
Not focusing on the little details. Everyone has a great name, and all the focus is on that, while they overlook key details within the business. I also see founders hire friends and family or fight over a “50/50” partnership, which I believe is impossible to maintain.
I also see companies doing too many things at once. Before you build this big product, see if there is a market for it and if people will even use it. When I was creating my board game, I first built it out in cardboard form and had friends and family test it. It isn’t expensive to test it in the market, and you want to avoid spending a million dollars on a product and when you roll it out to users the reaction is underwhelming.
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?
I walk to and from work each morning. It gives me that exercise, but more importantly it gives me time to think and reflect on the day. I used to run marathons (I no longer do), so this is a nice substitute. I want to be purposeful with each activity during the day, and my walks to work serve me physically and mentally.
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.
My wife because I don’t get enough time with her. I am pretty busy these days, so if I could get an hour blocked off for lunch, I would want it to be with her.
How can our readers further follow your work online?
I’m not a big social media guy myself, but you can follow Prizeout on the socials listed below!
This was very inspiring. Thank you so much for the time you spent with this!