The VendorHawk story: Idea to successful acquisition within a few years, and the importance of founder worldview alignment :: with Patrick Lowndes and Brian Geihsler
In this episode 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)Visit https://satchel.works/@wclittle/ventures-episode-12 for full notes and links to resources mentioned. You can watch this episode via video here. In this episode we cover the following (this is an abbreviated list): 3:55 - The origin story of VendorHawk8:22 - 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? 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. 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? 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? 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?