In this episode of Ventures we cover the full spectrum of an amazing startup story: Patrick’s original idea, recruiting a team, landing his first customers, getting into an accelerator (Techstars), raising a $1.2 million seed round, and being acquired by ServiceNow.

Overall, the purpose of this show (Ventures) is to educate and inspire a new generation of venture builders and investors. In this episode, we dive deep into a variety of strategies and tactics that are important for founders to consider.

My guests today are Patrick Lowndes (https://www.linkedin.com/in/patricklowndes/) and Brian Geihsler (https://www.linkedin.com/in/briangeihsler/), co-founders of VendorHawk (acquired by ServiceNow in 2018).

You can watch this episode below or listen on Apple Podcasts, Spotify, Google Podcasts, or wherever you get your podcasts.

In this episode we cover the following:

2:54 - Patrick quick intro

3:37 - Brian quick intro

3:55 - The origin story of VendorHawk

7:16 - How Brian and Patrick met

8:22 - Work with the early Prota Ventures crew and support for Patrick to focus on selling the idea to potential customers with wireframes/mockups.

10:25 - Intentionality on writing down and testing hypotheses with wireframes/mockups, and eventually quick MVP demos of the business concept.

12:06 - How exactly did Patrick successfully sell contracts with wireframes? What strategies/tactics did he use?

16:04 - Key hypothesis: is this enough of a pain point that customers would pay money for it?

16:26 - What was the problem that Patrick/Brian were solving? What was the value proposition that the first handful of customers were sold on?

18:25 - How did Patrick navigate his way into an organization in order to meet a decision-maker?

20:21 - What was Brian thinking about during the time when Patrick was landing the initial customers?

22:20 - What helped ground Patrick/Brian during the earliest stage? What was the “working agreement” they put together and how was that different from the official LLC “Operating Agreement”? How did Patrick/Brian establish company values? More on this here: https://patricklowndes.com/2018/09/19/faithful-founder-1-of-3-motivation-co-founders-values-family/

26:50 - Importance of worldview and value alignment, especially amongst co-founders, and why investors should look for it in early stage companies.

28:44 - The story of scaling the company even more, getting into Techstars, and raising seed money.

29:46 - The demo day story and refining the pitch

30:30 - Help from the Seattle community, mentors, and other founders. Closing their seed round 70 days after demo day.

32:00 - The story of hiring software engineers, an early sales team, and scaling a business while navigating family life as founders, having a new baby, etc…

33:12 - At what point did Patrick quit his day job?

34:37 - At what point did Brian quit his day job?

35:12 - What aspects of an accelerator - and Techstars in particular - make it most helpful for founders?

36:40 - What did Patrick/Brian and their team do after being seed funded? How did they scale? How did they architect their product roadmap and company operations?

41:40 - How did they build a B2B software sales team?

44:39 - How did Brian help Patrick think about iterating the product with the sales & marketing team? How did he navigate keeping the product up with the sales pipeline?

46:45 - At what point did “Corp Dev” start knocking on VendorHawk’s door? How did Patrick respond to those requests? See Patrick’s 4-part blog series here: https://patricklowndes.com/2018/07/16/getting-acquired-1-of-4-engaging-corp-dev-for-partnership-or-acquisition/ 

50:32 - What was Brian learning during the scaling process? How did he think about building the best possible engineering team and operations processes?

52:14 - How to successfully sell customers when you can’t build all the features they need right away?

53:25 - A personal learning for Brian regarding how to be a successful startup CTO, specifically around data security and convincing customers their data would be safe.

54:47 - Where did those conversations with Corp Dev end up? What is the story behind selling VendorHawk to ServiceNow?  

1:00:06 - How did Brian/Patrick navigate telling their team about the company sale? How did they set expectations with their acquirer about what the team merging in would look like?

1:03:06 - What did things look like after the acquisition? What did the team do? How did it go?

1:05:40 - Where can people learn and find out more about Patrick and Brian? Feel free to reach out to them via email at: patrick.lowndes@gmail.com and brian.geihsler@gmail.com and connect with them on LinkedIn: https://www.linkedin.com/in/patricklowndes/ // https://www.linkedin.com/in/briangeihsler/ // // You can also learn about Patrick at his site https://patricklowndes.com/.