Identify a problem that you can provide a solution to that has impact and value. The solution can not cost more then the problem.
Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and even bigger 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 Paul Szyarto of PS Group Holdings.
Paul had very shitty circumstances but he never let that define him. He is a survivor and an entrepreneur. He has taken the hard lessons he was shown to become an Oxford, Wharton and University of Maryland graduate. He is currently teaching at over 21 universities, including Wharton University and he has successfully created multiple systems for high level companies like Bentley, Microsoft, BMW, and SAP. He is now venturing into private equity and venture capital specifically focused on startups.
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?
I was raised on the streets of Irvington, New Jersey, with a very rough childhood. My dad was the primary agent of chaos. He just recently passed, which I have now found has provided me a guiding light in understanding that if my dad were not the person that he was, I wouldnot be the warrior I am today. Between trying to kill my mother, doing street fights and theft, there was a clear understanding that I had two paths to consider. My brother chose drugs and alcohol and I was on the same path. I ended up getting into a street fight in which I had to go to through the court system. The judge basically said, I had to go into the military. In all honesty, it was an escape. I had a warm bed, food, support, and a mission driven goal. It was very structured and what I needed at that time as a young man. I became an expert in computers and technology. Upon getting out of the Navy, I started developing those systems and used the guidance of the Navy to pursue my own success.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
My “Aha Moment” was after working with my mentor at Bentley systems. We developed certain products that at that point was revolutionary in integrating ERP systems with Outlier systems. For example, SAP is an enterprise resource planning program, but it doesn’t work with other systems. My mentor was getting paid $5000 an hour and meanwhile I thought charging $200 an hour, was massive. At that point, we understood the value of what we had, of what we were doing and that if you control the tech, you control anything and everything within an organization. I became an expert in working with top tiered companies such as SAP, Oracle, Jira and Microsoft.
A good friend of mine took our system, got on a plane and headed to Germany to present our idea. My partner at the time backed out and my “a-ha moment” was pretty much a “fuck it moment”. I know what I have, I know what I am worth, let’s take the risk. I got on the plane, I flew to Germany and I met with the Executive Board of TPG, who just recently, closed a multibillion-dollar deal based off my software integration program. After that meeting, they offered us TPG America, I became CEO, and we expanded that business into a multimillion-dollar company.
With their help, I developed an integration system called PSConnect, which started one of my companies Delcon. Delcon currently has over 2 billion dollars in managed assets with my software. I separated from TPG because our visions did not align exactly, created a new system and helped develop CS Connect with another German based company, Compana & Schott. From that moment forward, I realized that with any start up I was in, it is all about finding the gaps and applying a simple, economical, low cost, technological solution. ERP Systems can cost upwards of a million plus dollars. Consultants are getting paid $5000 or more an hour to come in and fix these systems.
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?
Everyone I meet is a mentor in my eyes. They all have something to teach. I live every day to learn and grow my mindset. From family to friends to co-workers, they have all taught me valuable life lessons that have shaped who I am today. A bad childhood made me an even greater father and husband. Faulty business deals made me the successful entrepreneur I am today. Every instance that you encounter, has meaning. Embrace it, learn from it, grow from it.
What do you think makes your company stand out? Can you share a story?
Most people do not focus on margins. They focus on reach and revenue equal’s impact. If you have reach and you have revenue, you will create impact. The problem with that, is business owners are spending a dollar to make 75 cents and they keep sinking money into the system. When, they should be thinking,” How do I take a quarter and turn it into a dollar?”
What makes PS Group Holdings stand out, is that we look at the revenue and the reach, which is impact, but more importantly we look at what the margin is. Margin is the most crucial part of any business. After investors, after cost, after equity, after taxes, if you do not have a 25% or more margin, your idea is flawed at some stage. I operate off the Rule of 25. If our idea from conception to realization, does not maintain at least a 25% or more margin, we will rework the process. If it does not meet those requirements, it is not executed.
How have you used your success to bring goodness to the world?
I am a firm believer in giving back to the community, so I created a company called Mentobo. It is a collaborative network that I am fully funding. And although it does not pass my Rule of 25, the idea of Mentobo is that I pass my knowledge down to young entrepreneurs and business professionals. Through Mentobo, they are able to access courses, books and connect with a network of likeminded individuals. We are also engaging in A2E which is our new venture capital arm and focusing on Corporate Warrior. Both companies are run by veterans and we are diving in to create a program called Vet Invest. Vet Invest guides just released military members in how to invest their money properly through business leadership. Veterans are being severely overlooked and they have a tough time transitioning out of the military. My goal is to make as many Veterans as successful as possible with a network of people they can rely on.
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?
Three-character traits are hard to pin down when my success is based off pure survival. Most people in startup space have some type of comfort. The most successful entrepreneurs that I have met, are incredibly uncomfortable. Every big tech startup or big business has a really shitty beginning.
I cannot take an entrepreneur and have them relive my childhood. But what I can teach them is a survivor mindset. You need to operate your business and your startup like you are literally fighting to feed yourself. One meal a day type mentality. Walk to work versus driving to work mentality.
It is not a 1,2,3 — here are three traits to make you successful — it’s the never broken mindset. What do I need to survive today? What does my spouse need? What do my kids need? And that’s it. Remove any other unwanted time and assets. You don’t need to show people that you are “worth something”. You just need to survive.
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?
“Prove your wealth.” To be successful, most people think you must look rich, to be rich. Fake it till you make it. That is complete and udder bullshit. How many Instagram, Facebook and social media influencers are saying, “I just made a million dollars, and I bought a Ferrari!” Every single one of these fake, executive leadership coaches are texting guys like me because they do not have equity to put back in their business.
Can you tell us a story about the hard times that you faced when you first started your journey?
At 23 I made my first million. With a young mindset, I could have easily bought frivolous junk, spent money on that big house and bought nice cars. But what would I be left with? Things to impress people?
It was another pivotal moment in my life where I had to dig deep for answers. Really figure out what my family needed to never be broken again. I created a sustainable budget, bought used vehicles, still had the same clothes and the rest of the million was reinvested back into the business.
Wealth is not how much money is in your account. A lot of these “social media superheros” will flaunt how rich they are and what they have. What they are not letting you know, to make a billion, they are spending almost a billion to get there. So even though they have that billion, it cost them every ounce of time to get nowhere profitably.
The true definition of wealth is time. Can you do what you want, when you want, with your time?
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?
This is the most critical Wealth Rule I can teach you; Don’t ever quit no matter what. If you set a goal or a task to get completed, see it through till the end, even if that means calling in reinforcements to get it done. Anything worthwhile in this life will not be easy. It will take grit, hard work, long hours, a solid work ethic, and a no-quit mentality. If you grind through those brutal days that would make 98% of people quit, it will separate you personally and professionally from that 98%, and you will reap the rewards they can’t. Stay true to your mission; keep your word, and NEVER QUIT!
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”?
I have been very successful in life, but that was not by luck or chance. I have started hundreds of business ventures, with some making me incredibly wealthy. You see, that’s where most mentors and these “insta-famous” influencers will stop and let you think every idea they have is pure brilliance, the proverbial “next sliced bread.” The truth of the matter, shit happens. Ventures will fail. You will lose money. Investors will be pissed. This is life. It’s also not an excuse to give up or start feeling bad for yourself. Remember, if being a TRUE ENTREPRENEUR was easy, EVERYONE WOULD BE SUCCESSFUL. Everyone wants to say I am a highly successful entrepreneur, but no one wants to be up till 4 am preparing a slide deck for a 6 am meeting. No one wants to work on holidays or while on vacation when things go wrong, and everything is falling apart. That relentless drive and no quit focus through the bad times is what separates wannabe entrepreneurs and TRUE ENTREPRENEURS. Most people will quit when failure happens, and 99% will move onto their “next great idea.” But nothing changes, that venture will fail too. If you want to succeed, quit making excuses when failure happens, toughen up, embrace the suck, and let’s get to work.
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 it is both. I don’t think it is an A or B conversation. The first thing you need to do is understand your cost basis to actually live. What do you need for rent, transportation and food?
If you learn to bootstrap and have a comfortable life, in building your companies net worth, any venture capital will come to you. They are going to ask you, “If I give you money, how are you going to use this?” If you have an over lavished, venture capital funded lifestyle, they are going to instantly think you mismanaged it.
On the other side of pure bootstrapping, a future investor will look at it and say they are not willing to spend money on necessary upgrades because they are pinching pennies, and they are short cutting.
When I say both, you need to spend your money on a needs based scenario within comfort that maximizes your impact.
Ok super. 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.
Identify a problem that you can provide a solution to that has impact and value. The solution can not cost more then the problem.
After we define the problem and solution, we need to identify the scope of the problem by performing a market research analysis. Evaluate how many people have this problem, and can those consumers afford the solution you are proposing.
To advance the startup successfully, we need to calculate an investment with people, processes, and technologies to get the reach needed to generate a 25% or more margin.
A competitor analysis on your solution will identify your products unique value proposition and what makes you different from other leading businesses.
Finally, create a seed funding analysis. What is the investor to equity ratio that makes it beneficial for the investor and you? Create an investor pitch deck with the above data research & your journey as a business owner and operator has officially begun.
By keeping these simple guidelines in place and allowing data to make decisions, you establish an infallible business plan.
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?
Too many times, I witness my students, mentees, and colleagues trying so hard to force their genius in every situation. It’s almost like they have this uncontrollable need to self-validate their worth and merit in every social and academic setting. There is no need to do this, and in most cases, being around you will get exhausting. Your well-intended motives will have the exact opposite effect that you had intended. Your moments to shine will come, and you’ll knock it out of the park. Your peers will perceive you as a calm, collected professional who is a true genius rather than someone with something to prove. Trust me; you don’t want to be “that guy in the office” or your social circles.
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?
Impacting Sprinting is one of my most valuable tools that will increase productivity by 100% at a minimum. 90% of people who “work” for 8 hours a day only work 3 hours. Between notifications on your five devices, answering emails, phone calls, getting coffee, snacking, chatting about the football game, we are not as productive as we think. Here is a solution that my entire team and I use: Impact Sprinting. Every day, I’ll start my day by writing down all the tasks that I have to complete and tasks I would like to get done but aren’t time-sensitive. I will then order them in order of importance from Mission Critical to Not Important. Once I have my tasks “Bucketed” by priority, I then block off 3 hours (divide the time as needed for each task) for my Impact Sprint to attack that Task Bucket. The next step is the most challenging part; I won’t do ANYTHING but the task at hand — 100% commitment and focus. I turn off all notifications and have the time blocked on my calendar: no meetings, no calls, no texts. The goal is to remove as many, if not all, distractions. On completion of the Sprint, I reward myself by going for a walk, getting coffee, or a snack from my favorite Donut Shop — it’s up to you how you want to use the next 30 mins. I then organize and plan my second Sprint for the next Bucket of tasks. Most people can easily achieve two sprints in a day without burning out, which will leave ample time to answer emails, attend meetings, and increase their productivity by a minimum of 100%.
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. 🙂
It is a network for world class leaders to transfer their knowledge to young entreprenuers and business executives. Together, with the use of case studies, podcasts and university research, we will be able to expand knowledge to the business sector in the most efficient way.
The best part? Anyone can join. If you want to learn, we have you covered through virtual networking groups and mentors you can rely on.
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.
I don’t think you can tag him, but if you can, go for it!
Jesus. I just want to know it all.
How can our readers further follow your work online?
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!