Be careful with your initial hires. Initial hires can make or break a small company. If possible, bring on people who are known quantities. People you’ve worked with in the past and who you know can perform are always better than rolling the dice on new folks.
As part of my series about the leadership lessons of accomplished business leaders, I had the pleasure of interviewing Mike C. Wilson.
Mike is the Founder and CTO of Enzoic, an innovative cybersecurity startup that helps enterprises screen for compromised credentials during authentication. He has spent 20+ years in tech roles with an emphasis on security products at organizations like Webroot, LogicNow, NASA and a few other startups and smaller software companies. He earned a BS in Computer Science and Aerospace Engineering from Texas A&M.
Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?
I started programming when I was 7, when my brother saved up and bought an Apple II, which he generously allowed me to use. By the time I was in high school, I was doing computer consulting part-time; I started my first company when I was 15. For the rest of high school and throughout my college years, I did a little bit of everything to earn money: from building and selling bespoke computer systems to custom software development. Funnily enough, I never regarded this as my true career path; it was merely something I was doing to earn money for college. I majored in Aerospace Engineering and planned to work for the space program post-graduation. Ironically, while I did end up working for NASA after graduation, it was in a software development role. We were replacing the old Apollo-era green screen Mission Control Center systems with modern servers and workstations, re-engineering the entire flow of telemetry data processing in the center and creating GUI applications for data monitoring and visualization. It wasn’t until a few years later, after I had left NASA, that I again waded into entrepreneurism and co-founded my first startup. It didn’t work out, primarily because my co-founder and CEO essentially quit to become a professional poker player, but the seed had been planted and I knew one day after I had recovered financially I would do it again. Years later, this led me to found my current company, Enzoic (originally PasswordPing).
Can you tell us a story about the hard times that you faced when you first started your journey?
From the get-go, Enzoic was self-funded and bootstrapped. All we had was an idea, some seed money out of our own pocket, and the willingness to work way too much to make it a success. I was the only full-time resource and I handled all of the product design and development, IT, accounting, legal, etc. You can’t be too proud when you start your own company this way; no matter how mundane the task, if it needs to be done it’s all on you. My co-founder, a professional software marketer with a background in sales and product management, handled all of the marketing and most of the sales. This worked out well and was an enormous help, not just because I was stretched so thin already, but because those are the biggest gaps in my skillset.
When you have so much to do and so few resources to do it, you must be ruthlessly efficient in every aspect of your day-to-day activity. I constantly asked myself the question “Is this something I really need to do right now? Is this a must-have or a nice-to-have?” On the engineering, research, and IT side, automation and simplification weren’t nice-to-haves, they were absolute necessities. Costs are obviously also a major issue for the self-funded startup. Since we were a SaaS product, most of our hard costs amounted to paying for hosting infrastructure. Going with cloud-based hosting for our production systems was a no-brainer, but I also came up with creative ways to reduce costs. For instance, I had to do some serious data processing (our product indexes enormous volumes of breach data from the Web/Dark Web and must analyze and process all of it to identify and extract the relevant data). I realized I had a pile of old workstations and laptops sitting around in my basement destined one day for the scrap heap, so rather than paying to process this data in the cloud, I repurposed all of them into a ragtag fleet of data processors and saved a significant amount on our monthly bill.
We launched our first version within three months of starting, in October 2016. That initial version kind of went … nowhere. I didn’t expect to be successful overnight and this wasn’t the first time I had been involved in a product launch that started off slowly, but in the back of your mind you can’t help but hope lightning will strike, the stars will align and your product will explode out of the gate with unprecedented viral growth. Undeterred, we proceeded to buildout the product and market the heck out of it. Within another month we had released a new version that greatly expanded the product capabilities and within four months after that, we added three additional complimentary product offerings. We started getting interest towards the end of the year and within six months we had closed our first deal and were making enough to cover our modest costs — still no salaries, but at least we weren’t watching the company bank account drain and we had more money to devote to marketing.
Where did you get the drive to continue even though things were so hard?
Before we started my co-founder and I agreed we would give the business two years before we would reevaluate things. We would not even consider shutting it down until then. If it’s possible for you to do this, I think it is an excellent strategy, as it removes the pressure to be a success right out of the gate and gives you the space and time a new company needs to figure out the market and pivot as necessary. So even though the typical doubts surfaced when things were slow and didn’t pan out right away, knowing that we had this runway and that we had committed to it helped immensely to pull us through.
So, how are things going today? How did grit and resilience lead to your eventual success?
It’s been a long road, but things are going well today. We have 13 employees and are a profitable and growing enterprise. While sales of our initial product offering are steady, this is a young market and we believe that most of the growth is still to come. That said, we have also pivoted into another market with a new product where we are having immediate success. I think this has been the key to our success: when it became apparent that our initial product offerings weren’t providing the growth we wanted early on, we were willing to pivot into a new market and pursue a new product that was a definite departure. The idea for this pivot came as a result of a sales opportunity where the customer wanted something we actually didn’t have. Keeping an open mind and having the confidence that we could build the product in question, we realized this might be a great opportunity for us. Our gamble paid off as it allowed us to grow the company significantly and reinvest in our original product suite.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Once we started growing, the time came for us to find dedicated office space. Looking around the city of Boulder, we quickly discovered this was not going to be a cheap proposition. One of the “offices” we considered was actually a former jewelry store in a rundown strip mall that had been purchased by a developer to eventually tear down and replace with multi-family housing. While the developer was waiting for their plan to be approved and permitted, they were trying to lease these spaces out for whatever they could get. We toured the space and while it wasn’t perfect, the rent was very low. We were informed that the retail space next door was going to be temporarily used by the city as a services center for the homeless, but that there would be no loitering in the area. While we were certainly supportive of helping folks who are down on their luck, we also knew realistically that there are sometimes issues with mental illness and drug abuse in this population and running a business in close proximity to this type of activity could be distracting. That said, the price just couldn’t be beat and we were assured by the landlord that it would not be disruptive to our business, so we decided to move forward despite our misgivings. Ultimately, we had to pass when we determined that the Internet access available was not sufficient for our needs. Later, once the homeless services center opened, I started noticing that there would often be a large group of people congregated in the parking lot and, not infrequently, police or an ambulance were also present. Needless to say, I think we probably dodged a bullet on this one. Cheap can be expensive.
What do you think makes your company stand out? Can you share a story?
One of the big things that differentiates us is the fact that we are 100% self-funded. In the technology industry at least, this is uncommon. Most small startups in our space are funded by venture capitalists and angel investors. There are certainly pluses and minuses to this approach. In the plus category, we are completely free to choose how to grow and run our business. This streamlines operations immensely and means that we are not beholden to anyone other than our customers. However, one drawback is that we lose the networking advantages we might gain from being part of a VC portfolio. Oftentimes VC’s can introduce a small company to potential customers and partners, and this can be a big benefit for a young organization. Being self-funded also meant we were under-resourced at the beginning, and we are constantly competing against companies bigger and better financed than ourselves. This puts a great deal of pressure on us to work smarter, harder and be ruthlessly efficient in everything we do. Overall, I’m not at all sorry we went the self-funded approach. I’ve been part of VC funded startups in the past and much prefer the operational freedom and agility that we have.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Find a way to take some time off here and there. It can be difficult, but you have to do it. And when you are off, be off — you might still need to be available for emergencies and answer an email sporadically, but don’t plan on doing work. In addition, find some enjoyable activity you can do on a daily or near daily basis that takes your mind off of work and consistently make the time to do it. It can be something as simple as playing video games for an hour with your wife or taking a break to hike the trail near your office — anything that forces you to put work aside and allows you some down time. Lastly, make time for sleep. Being well-rested makes you far more productive (and pleasant to be around) than trying to consistently burn the midnight oil.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
More than anyone else, my older brother David Wilson has had the most influence over my career. He purchased his first personal computer, an Apple II Plus, in 1979 and was generous enough (or browbeaten by my parents enough) to let me use it to learn to program. Later, when he started his own company to do custom software development, he would farm work out to me and eventually helped me start my own computer consulting business. That first company helped me earn money during college and gave me my first real taste of entrepreneurism. After college, when I was first getting established, I would often call him for career advice and to pick his brain about sticky technical problems. Several of my early career jobs came directly from referrals from him. I think it’s safe to say my career trajectory would have looked quite different without his guidance.
How have you used your success to bring goodness to the world?
I currently spend a lot of time working so I have very little time to give, but I do quite a bit financially. Personal charitable giving is probably the biggest single area. Everything from cancer research to cat shelters. We’ve also participated in local technology groups and mentorship programs for local startups.
What are your “5 things I wish someone told me before I started leading my company” and why. Please share a story or example for each.
- Make sure potential partners will mesh well. It’s important to not only make sure that they have complementary skillsets to the existing partners, but also to ensure that they complement well from a goals and personality perspective. As our business needs evolved early on, it became apparent that we needed additional help with certain facets. We weren’t bringing in the revenue to justify making hires in those areas yet, so instead we opted to add additional partners to the business. Ultimately, we brought on two partners who were former coworkers, friends and acquaintances, making the naive assumption that we would all work well together in this environment without really testing this out in practice first. Unfortunately, we ended up in a situation where there were personality and business goal conflicts amongst the partners and it led to some management dysfunction. Although we have overcome this to build a successful business, there is little doubt that this dysfunction has made running the business more painful and it has dampened some of our growth. Testing out potential partners on a trial basis to determine how everyone works together and having in-depth discussions to ensure compatible goals is something any business in a similar position would be wise to do.
- Try not to split your focus. Steve Jobs once famously said Apple only focuses on three products per year. Apple is a massive company, so it’s a pretty decent bet if they can only focus on three things effectively, as a small startup you aren’t going to be able to focus effectively on more than one. At Enzoic, we have a dual focus at the moment: two sets of products in two very different markets. While we have muddled along and made it work, and we have our reasons for doing so, I can’t overstate how complicated this makes things for a small team. I don’t recommend it.
- Be careful with your initial hires. Initial hires can make or break a small company. If possible, bring on people who are known quantities. People you’ve worked with in the past and who you know can perform are always better than rolling the dice on new folks.
- Don’t undervalue your company’s equity. It can be easy in the early days of a company to undervalue it, especially when there’s no guarantee it will ever be successful. This can lead to being overzealous when handing out equity early and put you in a position where you don’t have sufficient equity later without diluting existing owners. You should always look at the equity of your company as having significant future value and treat it like the expensive commodity it may one day become.
- Know your goals. Make sure you know going in what success looks like for you and what type of company you’re trying to build. Are you hoping to start the next multi-billion dollar publicly traded company? Or are you looking to found a modest friends-and-family lifestyle company? What is your time horizon like for an exit (if that’s part of your goal) and what shape would that take? These fundamental questions, while seemingly irrelevant at first (“hey, I just want it to succeed and make money!”), can guide many of your subsequent decisions.
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. 🙂
Plastic pollution is a massive problem for humanity. Microplastics in particular are appearing in even the most remote places on the planet at an alarming rate. Single use plastic containers are contributing to this in large amounts. A movement to make reusable containers the norm for groceries and toiletries is something I would personally like to see happen. Rather than continually buying new containers of nuts, chips, drinks, shampoo, shaving cream, etc., having reusable containers we can refill makes far more sense and would drastically reduce the amount of plastic waste that ends up in our environment. There’s no new technology we need for this — just the will and logistical infrastructure to distribute and consume these types of products in a different manner.
How can our readers follow you on social media?