Course Content

Total learning: 41 lessons Time: 10 weeks

The Author’s Entrepreneurial Journey

By Ryan Allis

“I’ve realized how short of a time I may have left. There’s this great desire within me to see a world in my earthly lifetime in which every human has what they need to survive and thrive. After 200,000 years of human history we’ve come so close to getting there after the immense progress of the last 200 years. So if I can use my life to inspire others to push toward that duality of global prosperity and sustainability sooner, then that is what I will work on each day. By 2035, every person will have access to their basic human needs of food, water, shelter, education, and medicine and a sustainable world to live in. This thought motivates me to get up each day filled with energy. And it is what makes every single moment of work seem like the most joyous moment of play.” – Ryan Allis

I was born on August 14, 1984, in the first few years of the Millennial Generation, to an Episcopalian minister from Pennsylvania and a social worker from Yorkshire, England. My parents, Park and Pauline, had met in the Fall of 1978 in Sheffield, England, when my dad was studying urban community ministry and stayed at an Ashram my mom lived in. They shared a deep care for the plight of poor and less-fortunate human beings. A year later, in November of 1979, my parents married and my mom moved from Sheffield, England to join my dad in Pittsburgh.

I beat some pretty long odds to make it into this world. Mom had four miscarriages before I was conceived, and when she went for a checkup while pregnant with me, the doctors sadly informed her that I had no heartbeat. Devastated, Mom went back to the clinic a couple of days later to have me removed, and to everyone’s amazement, my heart was beating again. I earned the nickname “Squiggles” from the line on the heart-rate monitor that confirmed the good news. Looking back, I think Mom always cherished me a little extra because she’d worked so hard to bring me into this world.

We lived in Pittsburgh for the first two years of my life, We rented a small apartment right above Mr. Rogers’ recording studio. In 1986, we moved as a job opened up for  my dad to become the minister at St. James Church in Woonsocket, Rhode Island. When I turned five, my mom quit her job as a social worker and started her own business as a couples’ counselor and a public speaker on women’s issues. Although her income was small, and my father’s not much bigger, she had a keen sense of financial intelligence and knew how to manage money—a skill I was lucky enough to have passed on to me. Both she and my father also made a deep impression on me with their care for disadvantaged people in our community.

I was a normal kid, playing tee-ball, Little League, and soccer. The only time I truly stood out was in winning the Bernon Heights Elementary School Geography Bee in 1994, for which my aunt and uncle gave me a Nintendo. I became very good at Super Mario Brothers and Bases Loaded 2.

Learning to Be a Global Citizen Early On

Ryan Allis baby
My mom Pauline holding me at age 1 in Pittsburgh, Pennsylvania

A great gift my parents gave me was the opportunity to travel and experience different cultures from a very early age. Although we never had a lot of money, travel was always a priority and my mom would scrimp and save to allow us to make regular trips. Some of my earliest memories are of traveling to England to see my Mom’s family. When I was in first grade, my parents took me out of school for the final month of the last semester so we could take a three-month trip to Europe. My teachers and my friends parents were horrified—how could my parents take a six-year-old out of school for a month? How would I catch up? In fact, as we traveled through Spain, France, England, and Switzerland, I learned things that most six-year-olds rarely have the opportunity to learn—about culture, history, art, and the complexity and diversity of the global cultures. I was exposed me to a world of opportunity and possibility that otherwise I would not have really known about.

When I was about seven years old, I remember my dad giving a sermon that said we should love all people as if they were ourselves, including white people, black people, brown people, and purple people with yellow polka dots. For about a year, I was fixated on finding these purple, polka-dotted people and making close friends with them.

These early experiences fueled a passion for learning about the world and about cultures that were different than my own. I won the school geography bee at the age of nine, and did well in the Rhode Island State geography bee, narrowly missing a chance to go to the national finals. I might have been raised in middle-class suburban America, in a town of 100,000 people, but my self-sense was expanded by what I’d learned and seen of the world. I thought of myself as American, but also partly British. And since Britain was part of Europe, that made me European too, and Europe was not too far from Asia. I felt like a citizen of this broader world of diverse cultures and faraway places, rather than just a small-town American kid.

Starting Young as an Entrepreneur

At age 6, I was already beginning my entrepreneurial endeavors

Are entrepreneurs born or made? In my case, I think it was some combination of the two. I certainly had an innate interest in business ventures from very early in life. But I also credit my parents for encouraging, educating, and inspiring me; for taking the time to nurture my creativity, my global knowledge, my financial acumen, and my care for improving the conditions of people less fortunate than myself. My parents were amazing people, and I’ll always be grateful for who they helped me to become.

My career in business began at the age of seven. My dad got me my first job doing landscaping for the local church where he was priest. My mom’s good financial advice helped me take the $500 I earned that summer and put it in a mutual fund—my first encounter with the power of compounding returns.

The next year saw my first entrepreneurial venture. I went to a local convenience store and purchased American flags for ten cents a piece. Then I set up a stall in our front yard and sold them for twenty-five cents a piece. For the first time in my life I was investing in inventory and turning a good profit that I was able to reinvest in the business. Not only did I sell all the flags, but I also sold the chair I was displaying them on for $20, which my mom was not too happy about.

In December of 1994, my family moved down to Bradenton, Florida, where I would receive on of the most important gifts of my life. My uncle Steve sent me one of his old Macintosh computers. I learned everything I could about that computer. I loved it. I traded in my frequent flyer mikes for a subscription to PC World, which I read from cover to cover. And of course, I played games like SimCity and Cannon Fodder.

Starting a Computer Business at 11

By the summer of 1995, I was ready to start my own business. My mom suggested that I do something connected with computers since I was inseparable from my Mac. So I created a flyer that said:

“Need computer help? For $5 an hour, responsible eleven-year-old will come to your house. Call Ryan”

My parents let me get my own landline to advertise on the flyers, which I thought was pretty cool. I posted that flyer everywhere I could—at the local Laundromat, the City Hall, the library. I even went around the neighborhood putting it in people’s mailboxes.

I didn’t get a lot of calls for the first couple of weeks, but finally my phone rang. I picked up the receiver and a gentleman asked to speak with my parents. Disappointed, I put my mom on the line. Turned out it was the postmaster general and he’d yelled at my mom for letting me put the flyers in people’s mailboxes without paying for the stamps.

That was the first important lesson I learned about entrepreneurship—sometimes you have to act first and ask for permission later. As long as you act within the Golden Rule, it’s okay to push the boundaries a little bit.

A couple of weeks later, I finally got my first real call from a guy named Jim. I rode my bike to his house and helped him for an hour with his computer. He paid me $10, a nice tip on top of my rate. Even better, Jim told all his friends at the bingo hall about me, and soon I was getting lots of calls from senior citizens who’d heard I could show them how to set up AOL and send pictures to their grandkids.

I was in business. And I’d learned my second important lesson about entrepreneurship: if you do a good job and take care of your clients, word of mouth will spread. Word of mouth is the best type of advertising you can get in business because it’s free and because, most importantly, it’s trusted.

That summer, I made more than $400, and I was able to go into seventh grade wearing some nice new shirts that I was proud to have purchased myself. I built this business for several years.

Age 14, with my dad Park and mom Pauline on Anna Maria Island, Florida

Becoming a Web Site Designer at 14

In 1998, one of my computer support clients, Lois, asked me a question I’d never been asked before: could I build her a website? Lois was a flight attendant who made regular trips to China, and had started bringing home freshwater pearl jewelry to sell to her friends. E-commerce was just taking off in those days, and she wanted to start selling online—a whole new world of possibility for enterprising retailers. Luckily, I had taken an HTML class in seventh grade, so I didn’t hesitate to accept the job. FreshWaterPearls.com was the first website I ever built, and over the course of the next nine months or so it reached about $5,000 a month in sales.

Eventually, however, Lois shut down the business because she couldn’t handle the additional work of customer service, order fulfillment, and so on, on top of her job as a stewardess. I was disappointed, but it had been a great learning opportunity, giving me hands-on experience of web-design and e-commerce. And the experience with Lois taught me my third important lesson about entrepreneurship: If you don’t build systems and hire and train good people to run your business, you are just building yourself a job rather than building a company.

Going into high school in Bradenton, Florida, I was now a website designer—a sought-after skill in the late nineties. On a school trip to Spain and Mexico in tenth grade, I had my first “entrepreneurial brainstorming session” and came up with a name for my business: Virante. I didn’t know where it came from or what it meant, but I liked how it sounded Spanish. I still didn’t know much about business, but I was a skilled designer and developer, and the summer I turned sixteen I built numerous websites including a travel agency site, an online dating service, and a site for a film company.

Three Books that Changed My Life at 16

Age 16, making phone calls for my business

When I turned sixteen, my Mom gave me three books that would profoundly shape the way I approached life and the way I saw the world. They were the classic success manual Think and Grow Rich by Napoleon Hill (written in 1937), the brilliant financial primer Rich Dad, Poor Dad by Robert Kiyosaki, and the incisive analysis of globalization The Lexus and the Olive Tree by Thomas Friedman.

The Lexus and the Olive Tree built on my early travel experiences and what I’d learned in school to fuel my interest in global economics and the power of business to change the world. Rich Dad, Poor Dad filled out everything Mom had already taught me about financial intelligence.

What I learned from Think and Grow Rich was the simple but immensely important insight that you create your life through what you think about, who you align yourself with, and who you surround yourself with. Inspired by this messageI wrote down my goals for the first time. I framed them, hung them in my closet where I get dressed every day, and read them each morning before I went to school. As I explain in How to Make Dreams Real, I believe this simple process is one of the most powerful tools out there for creating the life you desire.

 

Learning About The Power of Business Systems at 17

Ryan Allis high school graduation
Graduating from Manatee High School in Bradenton, Florida with my mom Pauline

At the age of 17, always looking for low-cost, effective ways to grow my business, I picked up the book Guerilla Marketing by Jay Conrad Levinson. One of his suggestions was to send out a press release and see if you could get some free publicity for your business in the local papers. I decided to try it. To my surprise, my story was picked up by my local paper, the Bradenton Herald, and featured on the front page.

This led to a number of inquiries and new client leads. But one call in particular stood out. It was from a guy named JR who had a company called ActiveX America, selling a liquid glucosamine supplement—one of the first such products available. JR didn’t just want me to build him a website—he wanted to hire me as head of website development and marketing, his first employee. Over the course of that year we grew from two to six employees and the sales of the company rose from $1,000 a month in sales to $200,000 a month. Looking back, I realize we were on the cutting-edge of e-commerce, although at the time, aged seventeen, it seemed to me like the internet had been around forever.

For a high school student, this job was an amazing experience and learning opportunity. My school was good enough to grant me an internship so I could work half days at ActiveX. I learned about Internet marketing, search engine optimization, e-mail marketing, affiliate marketing, display advertising, how to manage and optimize different channels. I also learned basic business skills, such as how to hire people, how to let people go, how to do accounting and payroll. Seeing these systems at work inspired me. Before then, I’d understood how to be a sole proprietor, and how to provide a simple service to clients. But I’d had little sense of what it meant to run a business. This was what I wanted—a business that could run by itself even if I was not there. I was tired of selling my time by the hour. I wanted a business that would work for me; a company that could scale and grow and make a real impact on the world. In the final week of 2001, when I took time to reflect on my goals and set new ones for the coming year, inspired by what I’d learned in Think and Grow Rich, I threw down the gauntlet for myself: I intend to build a business to one million dollars in sales by the time I turn 21.

College Years at UNC

The quad at UNC-Chapel Hill where I went to college

Albert Einstein once said, “The only thing that interferes with my learning is my education.” In the fall of 2002, that’s kind of how I felt. I faced a tough choice: Go to work full time at ActiveX, where I had the opportunity to learn a lot more about business and make hundreds of thousands of dollars a year, or go to college.

I’d been accepted by four colleges, but I was unsure whether I should go at all. I knew college would prepare me to get a good job working for someone else, but I’d already decided I only wanted to work for myself. I already had the skills and resources I needed to succeed. However, I was only eighteen, and I wasn’t sure I was ready to live full-time in a world where everyone was ten years older than me. I wanted to make friends my own age and build my network, and experience life outside my parents’ home and my small town. My parents had instilled in me a respect for the value of a good education, and an inspirational high-school economics teacher had awoken a deep interest in understanding the social and economic problems in the developing world, which I wanted to pursue further. But would spending all that time in classes take me away from learning how to actually make a difference in the real world of business?

After much soul-searching, I decided to go to college, and chose the University of North Carolina. On my eighteenth birthday, I packed up my belongings, and drove with my dad to Chapel Hill, N.C. In my first week at school, I made it into the school paper thanks to a web discussion forum I’d created for the students, UNCStudent.com. In those days, before Facebook, students were hungry for ways to connect online, and my forum was so popular it crashed the database. Unfortunately, I didn’t have the skill-set to build it using MySQL, or the foresight to make it available to students across the country, as Facebook’s founders were soon to do.

Working in my dorm room at UNC-Chapel Hill

A couple of weeks into the first semester, I was doubting my decision. “I have learned the principle that every action I take has a consequence. I have learned that the twisty tie must always be on the bread.” I wrote in my journal. “I love to learn . . . However, I feel that I perhaps am missing an opportunity. At this point in my life I have very specialized knowledge in the field of ebusiness development and ebusiness marketing. I feel that if I wait four years these fields will have greatly changed and the knowledge I have will be nearly useless. . .  Why am I in college when I have informational knowledge that could make me a millionaire in 18 months?” I had already built a company that had a net profit of $400,000. With the right team, I knew I could do this and more. I felt like I was wasting my talent doing pointless work. “I couldn’t care less about the eighth century papacy,” one journal entry agonized.

The Birth of iContact

Things improved a couple of months into my first semester at UNC.  I was enjoying my classes in statistics, calculus, economics, and globalization. I had convinced my professors to allow me to do an independent study in entrepreneurship, and as part of this, was allowed to attend several MBA classes over at the Kenan-Flager Business School, which proved invaluable. I learned about venture capital, legal matters concerning tech start-ups, and the basics of small business management. I also made important connections among the professors and found mentors who would guide me through some critical times later in my journey. My independent study also involved interviewing successful entrepreneurs, which provided both knowledge and great connections. School was turning out to be far more valuable than I could have imagined. I also discovered the Carolina Entrepreneurs’ Club, of which I quickly became Tech Chair. It was at a CEC meeting in October that year that I met Aaron Houghton, a senior computer science major who would play a key role in my future.

Aaron had been running his own business for several years—a web development and software company called Preation. He’d heard about me, as had most people, because of the feature in the school paper. In fact, as a Senior and an established web designer, he’d been rather irritated that some upstart freshman was getting free publicity for his web design business. But we soon hit it off, and he invited me to visit his downtown offices a few days later. As he was showing me Preation’s various offerings, one thing immediately caught my attention. Aaron was developing a web-based product that would help small businesses and non-profits manage their contact lists and send email newsletters.

In those days, most of the list-management tools available were downloadable desktop-based software products. I’d used one of these in my time at ActiveX, and had been frustrated by how slow it was. Aaron’s software, however, being web-based, allowing users to do in minutes what had taken as long as 24 hours on a desktop system. Plus, it included features like bounce-back handling, tracking, subscriber management, and user-friendly HTML templates. And it could be sold as a $10 per month subscription, rather than a larger upfront payment. I was immediately excited by the opportunity to really build something of value that would meet an obvious need in the market. Aaron and I agreed to partner to develop and market the software, which was currently only in a beta version. My company, now incorporated as Virante, Inc., would be in charge of marketing and getting customers and Preation would be in charge of website design, website development, and programming.

Eventually, we decided that it would be better to start a new company specifically to develop and sell the email marketing software, which we named IntelliContact Pro, later to become iContact. There were three main reasons for our decision. First, it would make it much easier to give out options and ownership in the company, with value specifically tied to how the email software performed, rather than on Preation’s overall business, which was primarily in web site development. Second, it would simplify our accounting of expenses and payroll. And third, it would enable us to build a company that could one day be sold or acquired without affecting the operations of Preation. From the start, we wanted to build our company with this end in mind. We hired a great lawyer, whom I had met in my MBA class, and he helped us to incorporate our new company.

I was thrilled to be building a business again, this time my own. We worked evenings and weekends, improving the software, creating a website, getting a logo, writing copy, setting up our merchant account and our back-end systems. Maybe I could do it all at once—get an education and learn about business in the real world. The goal I had set for myself the previous year—to build a company to a million dollars in sales by the time I turned 21—suddenly didn’t seem so far out of reach.

A New Chapter as CEO of a Growing Company

On May 11, 2003, I wrote a blog post marking a turning point in my life. I called it “And So the Journey Begins,” and I opened with a quote from one of my heroes, Bill Gates, which made me feel a little better about the choice I was making:

“In a certain sense, if things hadn’t worked out, I could always go back to school. I was officially on leave.” — William H. Gates, 1974

Like the great founder of Microsoft, I had decided to take a leave of absence from my studies in order to build iContact. I didn’t regret the decision to go to college—I’d learned invaluable lessons, made great friends, built my network, and met my business partner, all because I had chosen to go to UNC. But I knew we had the chance to build something special with iContact, and it was going to need all of my attention. I couldn’t imagine sitting in history classes any more when the future held out so many opportunities. My dad, concerned I was throwing away my chance at getting a good job and succeeding in the future, wrote me a long letter urging me to reconsider. But I knew he didn’t understand the nature of what was opening up with the internet, nor did he recognize the rare chance I had to use my knowledge of this new terrain to such an advantage.

“I just know that I do not want to be normal,” I wrote in my journal. “I do not want to be the guy that in 2006 after 4 years of college has trouble finding a job because of the job market. I have knowledge right now that if applied will make me never have to rely on the job market. I do not want to be stuck in the rat race my entire life. I think now I have a chance to get out.” I truly had no doubt that I could succeed. I certainly had a kind of self-confidence that was unusual for a kid my age. Later, I would learn that this is a common trait of successful entrepreneurs, particularly those who succeed young. When I think about the perseverance it takes to build a business, and particularly to get through the initial hurdles, it makes sense to me that those who succeed are those who don’t make any space to doubt whether it’s possible.

In hindsight, did I make the right choice? I think so, but it was a risk. If an eighteen-year-old kid came to me today, faced with the same decision and asking my advice, I’d say, don’t drop out of college to run a business unless your business already has $5000 a month in revenue. We had only a couple of hundred dollars a month coming in when I dropped out, so I was taking a chance. It worked out for me, but I’d caution others to consider whether they couldn’t keep the business going in their evenings and weekends until it’s bringing in a good four-figure monthly revenue stream, while attending classes as well. Sure, you’ll sacrifice some of your social life, but if you’re passionate about building a business that will let you live the life you want in the future, that may be a price worth paying.

These considerations did not trouble me, however, that May morning. Without a doubt in my mind, I finished my last exam in microeconomics and ran off to do three somersaults on Polk Place to mark the end of my college career—at least for now. I was ecstatic. I had big plans. Not only was I planning to conquer the world of email marketing—I was also intending to write a book on online marketing, launch a website for aspiring entrepreneurs, and start an international association for entrepreneurs. Ahead of me lay a wonderful summer of travel, conferences, and relaxation, and a fall of hard work and productivity. After laying out all these plans, my blog post concluded: “Although, I may be wrong, I think taking this time off will benefit myself and others in tremendous ways and will be a good investment. Worse comes to worse, I can always return to school and finish up the two more years I need to graduate. We shall see.”

I was ready to be a full-time entrepreneur and dedicate every ounce of time and energy I had to achieving the goal I’d set myself at 17: to build a million-dollar company by the age of 21. I had big dreams, and high ideals as well. My passion for entrepreneurship was not just the excitement of an ambitious kid wanting to get rich. I’d learned from my parents’ example to care about those with less advantages than me, and already I had a sense that entrepreneurship was key to improving lives and creating change in the world.

“Entrepreneurship creates the potential for anyone, from anywhere in this world to make something of themselves, create a life free of poverty, and provide value to society,” I wrote at the time. “The ability to become an entrepreneur should be made available to everyone in every country. To make this a reality, we must fight corrupt government, work with governmental and non-governmental organizations to establish proper legal and property ownership systems, improve entrepreneurship education at the grassroots level in every country, and connect entrepreneurs at every level to encourage the exchange of contacts, ideas, and methods.”

I knew I wanted to have an impact on this bigger picture. I wanted to make a difference in the world and create a world in which everyone has access to opportunity. But my journey was just beginning, and the immediate road ahead of me involved a lot of hard work on my own company. I couldn’t wait to get started.

Growing iContact

My company iContact reaching 300 employees in 2011

There are some moments in life that pass almost unnoticed, their significance only appreciated with the clarity of hindsight. Then there are others that you see coming—moments when you are fully conscious that you are crossing a threshold into a different kind of life.

I had one such moment at the age of 18 in June of 2003, sitting on a plane at 37,000 feet, crossing the Atlantic after a summer vacation in England. I knew that when the plane touched down I would be in a new world—a world of working 100-hour weeks, hiring employees, signing contracts, managing people, keeping accounts, paying taxes, and much, much more. I was about to become a full-time entrepreneur, the CEO of my own company for the first time. And I couldn’t wait.

Bootstrapping iContact

I woke the next morning with a stiff neck, a few balled-up sweaters supporting my head as I lay on the floor of an empty office. In my mind, however, the office was already full—overflowing with the vision of what I planned to create. Soon, we’d filled it with some furniture too, inherited from various friends or bought from the college surplus furniture store. Happily for me, one trip that day included a futon, which became my bed.

Bootstrapping means to better oneself by one’s own unaided efforts. For Aaron & I, bootstrapping meant eating Ramen noodles, working for a salary that we deferred for three years, taking consulting gigs on the side to pay the bills, and living in the office (in my case)—whatever we had to do to keep costs as low and build the business without seeking outside capital in the early stages. One time in June 2003, we had to climb into the dumpster to recover a proof of purchase tag off a Staples chair box we’d thrown out, so that we could get the $50 rebate. You have to go through these lean times as an entrepreneur to even have the chance to get to the better times. Of course, these lean times are often those you remember with nostalgia later.

As I explain in the section on venture capital (See How to Raise Venture Capital), one of the most important principles about raising money, at least from my perspective, is to get as far as you can without raising capital. This was the approach we took at iContact. We didn’t have much choice in the matter—raising capital before you have a product and paying customers can be tough, especially at age 18. I’m glad we did it this way.

Too many entrepreneurs waste a lot of time and energy trying in vain to raise the money they think they need to develop their product, rather than finding creative ways to minimize expenses and just getting started. Waiting to raise capital put us in a much better position—it allowed us to retain control of our business, and to build it organically. And it forced us to prove we had a viable business model before succumbing to the pressure of investors demanding returns.

We gave away the first iteration of iContact for free, so we could get user feedback and work out the bugs. I remember going to local fast-food restaurants like Jimmy John’s Subs and offering to do their email newsletter for free for two months. I would put a fishbowl by their checkouts where they could collect business cards, which I would go by and collect once a week and manually enter into our system. At the end of the two months, I would ask them if it was worth $10 a month to continue with the service, and most of them said yes, because they’d seen the increased business that the coupons in their newsletters was bringing.

It was a struggle at times, but by keeping expenses low we managed to incorporate our company, develop our product, and get our first twenty paying customers by the end of the summer. Aaron and I deferred our own salaries for three years, I lived in the office, and our initial team worked for “sweat equity”—they were the first shareholders.

In August that year we had gone through the official incorporation process to become a Delaware C Corporation. (See How to Build a Startup Plan for more details on this process.) With five initial shareholders, this was a more complex matter than incorporating my web development company had been. In that case, I had used an online service, but for iContact we used a reputable corporate law firm, who helped us to prepare all of the necessary documents—noncompete, nondisclosure, and confidentiality agreements; consulting agreements; employment agreements; stock restriction agreements; and so on.

That summer I had the time of my life. I’ve never worked harder, but I loved every minute of it. I also had the opportunity to teach entrepreneurship to high school students at two Lead America conferences in Chicago and Boston, where I discovered a passion for sharing what I’ve learned with others. I finished and self-published my first book, Zero to One Million, based on what I’d learned working at ActiveX America (which had reached $1 million in sales in Oct. 2002, just fourteen months after I began working there.)

By the end of 2003, we had four full-time employees and 78 paying customers. We used organic search engine optimization and affiliate marketing to evolve beyond the fish bowl method of customer acquisition. We also tried some unorthodox tactics, employing the “act first, ask later” principle I’d learned from my eleven-year-old encounter with the Postmaster General. We subscribed to all the lists of one of our main rivals, Microsoft Listbuilder, and then replied to their customers suggesting they check out our software. That earned us a “Cease and Desist” letter from Bill Gates’s dad’s law firm, but not before we had doubled our customer base, and had a substantial initial impetus for customer growth. By December, we’d brought in our first $12,000 in revenue. That’s not a lot, and I had thought we would grow faster. But we’d laid the groundwork for the systems that in 2004 would bring us $300,000 in revenue.

Becoming The Chief Everything Officer

For an entrepreneur in the first year or two of a startup, CEO doesn’t just stand for Chief Executive Officer. It stands for Chief Everything Officer. In those early days at iContact, I was responsible for everything, from acquiring customers to managing the checkbook to taking out the trash. And most importantly, you’re responsible for people. That was a steep learning curve for an eighteen-year-old who had never managed anyone but himself before. I had to learn a completely new skillset: communication, negotiation, human relations, leadership, and so on. Some of the most valuable parts of my journey at iContact were the leadership lessons I learned.

The original eight team members at iContact — celebrating a customer milestone over ice cream

People often ask me whether it was intimidating to be CEO at 18, managing people much older and more experienced than I was. Looking back, I’m surprised at how little I thought about it. I think that a lot came down to my self-confidence and my one-pointed dedication to our mission. Someone who knows were they’re going is attractive, so long as what they’re doing is basically positive. Our mission was simple: We were going to build the easiest online email newsletter tool and use email marketing to sell it to a lot of people. It might not have been the most exciting mission in the world, but it was something a lot of people needed. That clarity of purpose, coupled with the fact that I treated people fairly and paid their paycheck on time every week, outweighed my youth and inexperience. It didn’t matter so much how old I was; it mattered that we were all working hard, and we were living up to the commitments we had to each other.

As we began to have employees, I certainly had to make some adaptions. When it was just me and Aaron, that first summer, I had gotten into the habit of waking up at 2pm or 3pm, rolling off my futon, crossing the office to my desk and just starting work. I’d go all night until 7am, have “dinner” at McDonald’s, then go to sleep and put the schedule on repeat most nights.

Once we hired our first employee, Josh Carlton, in September 2003, suddenly I had to think about having more “normal” working hours. I got an apartment a few miles away and would come in at 11am, much earlier than my internal clock would have liked.

Josh started out as an intern to help us with customer service. After a month, we agreed to pay him $1000 per month plus 7% of the company (which was a bit too much, but fortunately we vested it over four years, so we didn’t lose much when he moved away after eight months).

Our second employee, David Roth, was a 56-year-old from Brooklyn who had significant business experience. He joined our team as our VP of Business Development and took a salary of just $30,000 per year and negotiated 15% of the company. David brought a lot of value to the company by way of the respect we gained from having an actual adult and experienced businessperson on our team. Soon after, we added David Rasch as our lead developer and Brad Gurley as Director of Support once Josh left for grad school. By May 2004, I was managing three full-time employees.

One of the biggest mistakes I made in those days as a young CEO was being a micromanager. I would give unclear directions and then come back the next day and suggest minute changes, like adjusting the font size or changing details of the design. I can only imagine how frustrating it must have been at times to work for me in those early days.

I learned later that the only way to scale yourself is to hire individuals who can do their job much better than you could do their job, to set goals with them and hold them accountable to those goals, but not to tell them how to do their job or try to do it for them. At a certain point in a startup’s growth, usually a year or two in, a leader’s function is to stop being Chief Everything Officer and step back into more traditional CEO role. One of the most important parts of this role is to activate and leverage the intrinsic motivation of team members.

Another important step in leadership, which I never succeeded in taking at iContact, is to get out of being the daily “traffic cop” by hiring a Chief Operations Officer. Even back in 2005, I knew this, writing in my journal, “We definitely need a COO. I’m the visionary, the planner, and the strategizer, not the operations guy. I’m learning, but it’s not my expertise.” I never did hire the operations person, and I’m sure if I had, I would have made life at iContact much easier, both for myself and for everyone else.

The College Dilemma, Round 2

A Fortune Small Business magazine cover from 2007 in which I explain my decision to leave college

In the fall of 2004, with the business growing and a great team on board, I decided I could afford to be gone a few hours each day to attend classes, so I went back to school for my second year. I successfully juggled work and studies for the next two semesters, and enjoyed learning more about economics as well as taking psychology classes.

In May of 2005, I found myself confronting the education vs. business dilemma again as I thought about the year ahead. On one hand, I had only a year left to complete my undergraduate degree, which was important to me and my parents, and I knew would be critical if I wanted to go to business school one day. (I had Harvard or Stanford in my sights.) I was still young enough to be a “normal student” and enjoy the college social scene. I knew my life as a CEO was only going to get more hectic, so it might be better to get this over with while I had only fifteen employees rather than waiting till I had fifty. On the other hand, my goal to build a company to $1 million in sales before the age of 21 was so tantalizingly close, and beyond it, greater possibilities for creating lifetime financial security. If I wasn’t around the business so much, would the goal slip away? And would I be able to get good enough grades anyway, if my attention was distracted by the business? These are the questions I asked myself.

Ultimately, I decided against going back to school. Was it the right decision? In hindsight, I think so, given how well iContact was doing at that point. The risk I took was that I might sacrifice my dream of going to business school one day. But it was a risk worth taking when my biggest goal, a $1 million dollar company, was within reach. Later on, I found that I could enter the MBA program at Harvard Business School without having to complete my undergraduate degree.

In the meantime, I marked another milestone: purchasing my first house at the age of 20. One of my mom’s dreams was for her son to own his own house. That house cost $180,000, most of which I needed a mortgage for. It was touch and go whether I would get approved for the mortgage, but on July 18, 2005, I proudly collected the keys and moved into my very own home: 910 Odyssey Drive in Durham, N.C. I’d come a long way from the office floor through a lot of focus, hard work, and being lucky to have found a really good team.

The $1 Million Milestone

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A new office and a goal achieved – milestones of 2005

By the end of July my first big goal was clearly in sight. “Based on customer re-billings, we are guaranteed to hit the $1,000,000 in sales mark on September 1—finally!” I wrote in my journal. We were also on the brink of passing the 2500 client mark. I had missed my goal of building iContact to $1M in annual sales before I turned 21—but only by 18 days. I celebrated my twenty-first birthday on August 14, and we passed the $1 million mark on September 1. Not bad for a goal I had set at sixteen. As I celebrated this achievement, the one thing I knew for sure is that I would have missed it by eighteen years, not eighteen days, had I not written down that goal and had it on my wall for the past four years. “Riches begin with a state of mind, with definiteness of purpose” writes Napoleon Hill inThink and Grow Rich. Just as he said, once that purpose was in place, hanging where I could see it every day, I figured out how to bring the people, the knowledge, and the resources I needed into my world in order to make it happen. It took a lot of hard work, but without the clear definite purpose and focus none of it would have happened and I would have instead been just a normal student, passing time until I had to look for a job.

Learning To Grow Our Customer Base

In 2005, shortly before passing our $1 million milestone, we did the most important piece of math a business can do.

It started over lunch with a friend of mine named Jud Bowman. Jud was the co-founder of Motricity, a company that raised $350M in venture capital before going public in 2010. Today, Jud is the CEO of Appia. Jud was asking me why I hadn’t raised venture capital for iContact. I told him I was considering it. He asked me two critical questions to determine whether we were ready to raise outside capital:

  • What is the lifetime value of an average customer?
  • How much do you spend to acquire an average customer?

Since iContact operated on a monthly subscription model, Jud told me that I could estimate the lifetime value of an average customer by taking the monthly average revenue per user (ARPU) and multiplying it by the average number of months a customer stayed. I knew the average monthly revenue per customer was $45 at the time. I also knew our monthly average churn rate was about 3%, meaning an average customer stayed with us 1/0.03 or about 33 months. So to get an estimate of the lifetime value we simply multiplied $45 and 33 to get about $1500.

ARPU x Months of Life Before Cancelling = Lifetime Value

Then to calculate how much we spent to acquire an average customer, Jud told me to simply take what we spent per month on advertising and divide that figure by the number of new customers we acquired in a month. At the time, we were spending about $100,000 per month on advertising to acquire 330 customers per month. So our Customer Acquisition Cost was about $300.

Advertising Spend / Customers Acquired from Advertising = Customer Acquisition Cost

There it was. We knew we spent $300 up front to acquire a revenue stream of $1500 over about three years.

That number—our customer acquisition cost—was critical to being ready to raise venture capital if we wanted to go that route. It would enable us to create a mathematical model for scaling our business, one that would clearly show investors how their money would be used and what the result would be. (If you’re considering raising capital and haven’t yet done this math, stop and do it now. I explain the process in more detail in How to Acquire Customers.)

The moment you have a proven mathematical model, plus a good track record, it gets much easier to raise capital, providing that the inputs and outputs of that model are far enough apart, meaning the economic return is good. We had a history of hitting our numbers and growing rapidly, and now we had a way to accurately project our future growth and scale our company.

Raising Our Seed Round

Now that we had our “unit economics” figured out, we were ready to go after our seed round of funding. After considering the pros and cons of raising capital versus selling the company, we decided to go ahead with the pursuit of funding. I was somewhat conflicted about doing this, however. The prospect of becoming a serious player in competitive email marketing business was exciting, but I sometimes felt like I was “selling” the next three years of my life. Any time you raise capital, you’re basically committing yourself to 3-5 more years with the company. Typically, investors won’t let you sell the company until you’ve at least doubled their investment. Part of me wanted to stay and grow iContact into the premier email marketing company. Part of me was itching to make more of an impact on the things I cared about, like investing in businesses creating jobs in the developing world.

While I loved Chapel Hill, I also longed to experience big city life. If we raised capital, any dreams I had of moving to New York City, Boston, or San Francisco; working for the U.N.; going out to work on economic development in emerging markets; or seeking out my soulmate; would have to wait. That last one was particularly tough. There was a longing to find a partner who shared my dreams and passions, and and I didn’t honestly know if I would find her in Chapel Hill. I wrote in my journal:

“There is a hole inside. It is slightly eating at my soul. Something that could be called loneliness. A longing for what could be more. It is making me miss what could be.”

In 2006, when we raised our first round of outside capital, I decided to put all these other dreams on hold for a few years and see what we could actually build iContact into. Too many entrepreneurs take outside capital way too soon, before their company is ready and before they are ready to commit five more years of their life into building their firm. I had carefully considered the pros and cons, and decided to go for it.

Until that point, the only capital we’d raised for iContact had been a $5000 emergency loan from a friend back in 2003, when our server died, taking with it all the data for the 56 customers we had at the time (including the contact details that would have enabled us to communicate with them and let them know why they couldn’t access the service they were paying for). That loan, for which we also gave 1% of the shares of the company, enabled us to buy a new server, and luckily we were able to retrieve the majority of our customer data. Besides that, we had bootstrapped for three years, until we were past the $1 million in revenue point. By delaying raising funding until we had more than $1 million in sales, we had retained control of our company and avoided the early distractions of being answerable to investors. In early 2006, I wrote a list of “What I Don’t Want to Become” which included “Someone who loses the next five years of his life to being the puppet of work and venture capitalists.” Somewhat reluctantly, I began the process of seeking funding, eventually raising $500,000 in May 2006 from IDEA Fund Partners of Durham.

There were challenges closer to home at iContact as well, dealing with employee frustrations. At the end of one particularly tough day of back-to-back meetings, I reflected: “Damn politics. Great lessons though. Frustrating yes, but interesting and enlightening. Always build pre-emptive support every day and, damn it, communicate your vision or else people will think you don’t have one (and communicate it individually or in small groups to get feedback and adjust before presenting to everyone in front of everyone). A lot of work, but it’s how it is done. Tremendous lesson there. People need to know they can be safe coming to me to express their frustrations if they don’t think they can come to their managers.”

Making myself available to employees meant more days like that, but I knew it was better than letting frustrations go unspoken. I did my best to be accessible and to build personal and connected relationships with a lot of the people at iContact.

I was also struggling at this period in my life with the downside of the entrepreneurial lifestyle. “Working so hard I may be 43 by the time I next come up for air,” I joked wryly in my journal. “No time for vacation.” Spending every waking moment behind a computer, but continuing to eat burgers like I was a seventeen year old running cross country every day, I had gone from a 140 pound 18 year old to a 210 pound 22 year old. The lack of balance in my life was taking a toll on my health.

As we started interviewing potential investors in early 2006, I was privately wondering how much longer I had as CEO. Was I worthy? Were we worthy? Would we be able to get the returns? For once in my life I was not quite so confident. “The dreams, the designs, the desires—are they within me?” I asked myself.

In February, we brought on an experienced and knowledgeable Chief Financial Officer, Tim Oakley, who had raised venture capital before, and would become a valuable mentor and guide as we navigated investor interviews and term sheets for the first time. It was a steep learning curve for me. One of the first VC firms we pitched, Southern Capitol Ventures in Raleigh, turned us down, on the grounds that they thought we’d probably sell for just $10-15 million in three years time, and would therefore not be worth the investment. This had the effect of galvanizing my commitment to the path we’d chosen for taking the company forward. I was determined to prove them wrong. I knew they were spending too much time looking at the tangibles of our competitive space and not enough time looking at the intangibles of our people and drive, energy, and passion for building the company.

Another firm we were negotiating with, Aurora Funds, turned out to be inflexible on terms that were important to us, like percentage of founder vesting, option pool size, and board structure. (See How to Raise Venture Capital for details on what to look for in a term sheet.) After a few months we parted ways, unable to come to an agreement. Eventually, we decided to go with local investing firm IDEA Fund Partners, who were offering to put in $500k of convertible debt, at a valuation that would be determined a year later using a formula of 4x the revenue we did in the next 12 months (an abnormal provision, but one that worked out well for both sides). IDEA Fund Partners invested their $500,000 at what eventually turned into a $16 million valuation and earned about a 6x return on their money when we sold iContact six years later to Vocus for $169M (wasn’t a 10x return due to future capital causing additional dilution).

One of the key takeaways for me during the process of raising venture capital was the importance of mutual trust and compatibility with the investors you are considering going into business with. Each time we raised capital for iContact, we were lucky enough to find investors who provided not only money but strategic advice and mentorship.

We would use our seed funding to grow iContact from $1.3 million in sales in 2005 $2.9 million in sales in 2006, following the mathematical formula we’d figured out when we did our unit economics. Our customer base went from 3600 in 2005 to 7600 in 2006, and our team grew from 22 to 37. We had set ourselves up well to raise $5.3 million more in 2007 from Carter Griffen on Updata Partners of Reston, Virginia.

Adventures in Entrepreneurship

2007 was a whirlwind year. In my annual review, I summed it up by the numbers, which had become semi-obsessed with setting up tools to track:

I’ve been on 51 airplanes, visited 27 cities, spoken in front of 3,445 people, sent 13,174 emails, received 61,457 emails, added 46 employees, lost 2 employees, added 10,000 customers, did $6.9 million in sales at iContact, did $400,000 in sales at Virante, spoken with 48 venture capital firms, raised $5.35 million in venture capital, sold $1,125,000 worth of shares, bought a $600,000 house, got 4 roommates, held 11 Entrepreneur & Social Entrepreneur Meetups, got 1 book contract, lost 3 phones, and completed 1 book manuscript.

Besides building iContact’s customer base, I’d been building the company’s public profile and getting attention from the mainstream media. I’d also continued to promote my first book  Zero to One Million and take speaking opportunities whenever they arose. I was building my own profile not for personal fame, but because I wanted to increase my capacity to have an impact on as many people as possible. This caused some tensions back at the office, however. Writing in my journal at the time, I articulated my reasons for spending time building connections:

“My passion and deep down motivation is having the opportunity to improve global societies, ensure environmental sustainability, and help lead a generational movement to end extreme poverty and lack of equality of opportunity in developing nations. This is why I get up each and every day and do what I do. It’s not just a charity I support. It’s my driving core. If you think I care about being in the public eye for the sake of myself you are incorrect. I care about being in the public eye because I’ve dedicated my life to figuring out how I can best serve humanity and know the best way I can do that is by sharing what I learn along the way, gaining influence, becoming a leader, and making a difference on a global scale through entrepreneurship, social entrepreneurship, philanthropy, and public service.”

The big decision point that year came in May. iContact was fast becoming a leading email marketing tool for small to mid-sized businesses, but it became clear that we would need to raise more capital in order to sustain our growth. I took a deep breath and recommitted to the company mentally. I was willing to give it another 5 years if that was what it would take. So began a relentless round of meetings with VC forms—48 in total. As I later reflected, one of the things they don’t tell you about entrepreneurship is that you get uncomfortably good at flirting with middle-aged men!

In June on 2007, we closed on our Series A funding: a $5.3 million round from Updata Partners in Reston, Virginia. Now we had real money and we could build out a truly professional executive team, ramp up our online advertising, and build out a professional, scalable, secure system that could grow to hundreds of thousands and eventually millions of users.

Not only was this a big step for iContact; it was a personal milestone as well: the deal included $1 million each to Aaron and I, making me a liquid millionaire for the first time at the age of 22. In the final hours before the deal closed, waiting with fingers crossed in the Boston airport, I wrote in my journal:

“I will never forget who I am, where I’ve come from, what I am seeking, and what the purpose of my life shall be. Money will never change me, only enable me to make investments in helping more people, expanding access to opportunity worldwide, ending war, ensuring environmental sustainability, and helping strengthen societies and communities.”

I truly believed in these words. It wasn’t just something I was telling myself. But I had to make sure that I always remembered who I was (the middle-class son of a social worker and minister who deeply cared about the less fortunate) and from where I came, regardless of where life would take me in the future.

After a moment of celebration, we were back on the treadmill, with money to fuel our carefully calculated expansion efforts. In the midst of it all, I got an offer from McGraw-Hill to reprint my book, Zero to One Million, in an updated edition that included the iContact story. I wasn’t sure how I would find time for it all, but accepted anyway, writing at nights in a Durham coffee ship.

Learning to Be an Authentic Leader

One of the tough but important lessons I learned in 2007 was about taking negative feedback. That spring, I attended a three-day leadership development program with my team at Grinnell Leadership, a N.C. based training organization. The first two days involved lots of activities, during which the trainer, John Grinnell, would observe the leadership skills of myself and others in the team. They also included a 360-degree review from all of my direct reports, the results of which were shared with us on the final day. Most of my feedback was positive, but I was rather taken aback by some strong negative comments about my “people skills.” That was hard to swallow, when I felt like I’d worked so hard to create a workplace that felt like family. I felt flustered, saddened, and confused, not sure how to interpret or respond to this unexpected criticism.

The most valuable thing I learned in that workshop, besides the fact that sometimes you just have to take criticism gracefully, was that I often appear to others to be overly serious and even intimidating in my intensity. John Grinnell, the workshop leader, called it my “stone face.” It’s an expression that’s hard to read, which can be useful when negotiating, but worked against me when engaging with my team, as people tended to assume that my lack of emotion I didn’t like them

What John helped me to understand was that my overly serious demeanor was my way of compensating for my youth. Especially when interacting with people older than me, I was afraid they would discount me because I looked so young. So I’d adopt this “stone face” which, coupled with the fact that I am quite intense in my passion for changing the world, ended up pushing people away. John encouraged me to just be myself—to smile, connect authentically, and not be afraid to be silly once in a while. This way, he said, people would actually get to know me, and I’d get more direct feedback ongoingly, so I’d be less likely to get the kind of unpleasant surprise I’d gotten on my 360-degree review. At the end of that workshop, I made a note to myself:

Be real, smile, connect. Don’t just talk about business. Stop acting. Let my free child out. Live through my heart. Ride the Dragon. Don’t blow off people too soon myself.

“Riding the dragon” was a phrase they used at Grinnell to mean taking the risk to be yourself—letting yourself be authentic, spontaneous, and even silly. After that workshop, I made a lot of effort to be more approachable in the office. I launched a monthly video news update that we called iNews, which always featured a segment from me where I was doing something ridiculous, whether reading about entrepreneurship to my stuffed animal collection or dressing up as Tina Turner to celebrate a company milestone. I made fun of my own youth, with one video featuring an employee acing shocked to learn that I was in fact CEO. These videos, (which you can watch here—scroll down to “iContact Videos”), helped to build and make more conscious our company culture, as well as make me seem more human. I even filmed one segment where I gave everyone a video tour of my home in Chapel Hill, so they could get a sense of who I was outside the office.

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Learning to let my inner child come out and play at the office

I tried to carry this lesson into my public appearances as well. In November of 2008, I had the opportunity to return to a conference that I’d attended some five years earlier: The Collegiate Entrepreneurs’ Organization Annual Conference. Back then, I’d been a wide-eyed college kid, soaking up everything I could learn from the grown-ups on stage. Now I was the closing keynote speaker.

When the day came, I was nervous. I was generally a confident public speaker by this point in my life, having gotten used to speaking weekly to the Carolina Entrepreneurship Club, as well as audiences on my book tour. But this would be the biggest crowd I’d ever addressed. I had already had a taste of what it felt like to stand on that stage the day before, when I introduced my financial hero, Robert Kiyosaki, author of Rich Dad, Poor Dad—one of the great honors of my entrepreneurial life. Now it was my turn to take the spotlight in front of 1500 people. And if that wasn’t enough to make my knees knock, I was planning to pull off my pants and dance in front of them.

Let me clarify—I was wearing track pants beneath my dress pants, and had Soulja Boy’s Bird Walk cued up ready for my moment of silliness. But what if I messed up? What if I fell while running onto the stage? What if too many clothes came off? Thankfully, I pulled it off without pulling off more than I intended. You can watch the video here—the dance is in part 3 at 1:20).

It was quite a moment, standing there on that stage, looking out at a sea of faces so like my own just five years before. I felt like all the hard work was finally beginning to pay off. Yes, I had had to make sacrifices, and walk a different path than most of my peers, but it was worth it to be standing there that day with so much to share.

Finding A Greater Calling

In the little time I had for self-reflection, my sense of a greater calling continued to haunt me. “There is so much to do,” I wrote. “So many people to help. I don’t know where to begin. But I do know that it will start soon. How can we end the killing? That is all I want to work on. Going into battle to create the opportunity, to end the deaths. Men need not kill men. Not with communication and a sense of identity at the species level. War must end. Children must have the opportunity to be educated.” My longing to find a long-term partner and experience life in a big city also tugged at my consciousness. I hoped that by 2009 we would have a chance to sell the company and allow me to pursue new adventures.

It was around this time that I wrote an entry in my journal entitled “Tormented by Possibility.” I was playing scenarios out in my head: What if a buyer offered $100 million? “We’ve got such a tremendous opportunity to truly build something special,” I wrote. “A wonderful culture. A public company that cares. Why the hurry?” But I knew at least part of the answer. “I’m afraid. Afraid it will all go away. Afraid Google will buy our competitor and make it free with ads at the bottom. Afraid our technology will fall apart.” Part of me wanted to get out soon before our amazing run of success came to an end. Part of me loved the company we were building and wanted to hang in there for the long run and take it public.

2008 had been a great year for me and for iContact. Our growth had continued unabated. Zero to One Million was published that Spring, and made it to #2 on Amazon and #11 on the Wall Street Journal bestseller list. But the acclaim and attention the book brought me paled beside one of my proudest moments that year. One day in August, during a company meeting our CFO, Tim Oakley, from whom I had learned so much, made a beautiful speech to present me with a company award we called the Outstanding Performance Award (normally reserved for the employees of the month). Tim said, “I am 46 and I have learned much from Ryan. He has challenged me not only by words but by his actions, but especially by his genuine and authentic care for the uniqueness and value of each person at iContact and in our local and global community.”

I am sharing this excerpt from his speaking notes because not his praise was all true (I was definitely making a whole bunch of mistakes right around that time, which became clear in hindsight). But rather, because his appreciation touched me deeply and it reinforced how important shared appreciation was within the iContact culture. Aaron and I had invested heavily in the emotional side of the balance sheet as well as the financial side. We cared passionately about the purpose of our business, about the employees and our whole team. We cared about our community, and about the customer base that we served every day. And through that passion and that investment of time and care, we had been able to create substantial assets that often could not be seen in a simple profit and loss statement. Things were by no means perfect, but investing in our people and our culture had begun to pay off in a big way.

Growing Through The Financial Crisis

When the financial crisis hit in October 2008, I was affected, like most Americans who owned equities. Initially, I thought the situation was primarily contained within the financial services sector and that the markets would bounce back within a couple months. Boy was I wrong. Within two months, my liquid and paper net worth had dropped by 40% and investment bank valuations of iContact fell from $110M to about $70M. I’ve never been someone who is driven by money in and of itself, but as I watched that perceived value evaporate, I couldn’t help thinking of all the good it could have been used for, like sending thousands of children to school in Ghana. Then I realized it was never truly real and that I had much to continue to work for.

Another impact of the market decline was that it made us much less likely to sell the company any time soon. Now it seemed wiser to raise some additional capital and build the company for two or three more years. Mentally, I recommitted once more, and set my sights on growing iContact to to a 300 employee company.

Despite the financial crisis, iContact ended 2008 having grown 125%, and we would go on to grow 81% in 2009. Because of our prudent approach to raising capital and our careful adherence to a mathematical marketing model, we were able to thrive during a time when many businesses did not. The spring of 2009, however, was a time of soul-searching for me. As our customer acquisition numbers leveled out, and my failure to have hired a Chief Marketing Officer was creating stress for me and others, I was experiencing an uncharacteristic loss of confidence. I wrote at the time:

I’m starting to see myself in a less confident way. iContact is not growing like it used to. We’re on track to miss our customer acqusition goal this month. I’m not destined to always exceed my goals, it seems. I’m not sure I’m the right person anymore to lead the company into this next stage of growth. Scary to think about. Terrible to have lost some of my confidence.

At another tough moment, I reflected:

I am feeling a bit directionless. I am a leader. But I think I need to be a follower for a little while.

By 2009, I started seriously considering replacing myself as CEO, mentally scanning through the other members of the leadership team to see who might be a potential candidate. I didn’t want to leave my “baby” in the hands of a stranger, but no-one on our existing team seemed to be the perfect fit.

Fortunately, a major public software company from San Francisco was interested in buying iContact. Thoughts of succession planning were quickly put aside as I focused my attention on our potential buyer. Selling the company would mean I was required to stay on through the transition and for some time afterwards. but it also meant exciting opportunities to work within the acquiring company, where I could learn and develop in a new kind of environment, perhaps in a new city. As I wrote in a letter to our potential buyer:

I view each segment of my life as a building block toward being able to reach my long term purpose, as well as a journey in which I wish to learn, enjoy, and grow throughout. Over time I’d love to create and build a multi-billion dollar public company, invest in other entrepreneurs and social entrepreneurs who are changing the world, and eventually consider some type of public office. Time running a business unit of an entrepreneurial, growth-oriented public company would be a new experience through which I would learn and grow substantially that would help me in reaching all of these goals.

While we had not been actively seeking a buyer, and were focused fully on becoming a winner in the space, our discussions with this buyer were very interesting for a number of reasons, particularly their interest in keeping the business in its current location in N.C. and retaining the existing management team, and their willingness to make additional investment in the business unit that would allow it to grow even more quickly. Plus, they were looking at an offer of $95 million.

Ensuring the end result of all our hard work was a “win” was important to Aaron and I. Ten years from now I wanted to be able to look back and know that we had built a sustainable company (or business unit) that would continue on long after we were gone and make an ongoing impact in our industry and the State that we cared deeply about. Unfortunately, the offer to buy the company in 2009 soon evaporated. It would take another 3 years before we would find a buyer.

Finding My Passion

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Visiting Kakuma Refugee Camp in Kenya, May 2012

I was seventeen years old when I learned a statistic I’ve never forgotten: 2.7 billion people, or 42% of the world’s population at that time, lived on less that $2 a day (adjusted for purchasing power parity or PPP.) The other memorable and terrible statistic I learned at that time was that 45,000 people were dying of starvation and preventable disease every day, according to a 1999 World Health Organization report.

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Finding a way to create a prosperous and sustainable world for all people has been a driving obsession of mine since age 17

I learned both these statistics from my high school economics teacher, Robert Fletcher. And more importantly, I learned about the human beings behind the numbers. He was an inspirational teacher who taught us about global economics from a social rather than a mathematical perspective. My parents had raised me to care about others who were less fortunate than myself. I’d grown up watching them volunteer their time to care for struggling people in my father’s congregation and our community. But this was suffering on a greater scale than I’d ever really envisioned.

I took away from Mr. Fletcher’s class a key realization–that the would as it is structured today is fundamentally unjust and suboptimallly organized for maximizing human security and welfare. I recognized that there was not truly anything close to equality of opportunity. In that moment, I committed to doing everything I could to making the world a place in which equality of opportunity for all human beings could exist.

I resolved to learn everything I could about developmental economics, because even at the age of 17, I realized that it would take more than charity to address these issues. It would need systemic change on multiple levels. During the years I was growing iContact, I often felt frustrated that I didn’t have much time or energy to devote to the cause I cared about. Back in 2004, on my twentieth birthday, I wrote in my journal:

I’m 20. My friends are starting to turn 21. Am I spending my time in a worthwhile manner? Who do I want to become? Where will I be living in five years? When will I start working to create a world without poverty? Can I create global opportunity better as a business owner?

In the years that followed, these questions came back to me over and over again, particularly when faced with the decision to raise capital and therefore commit another two or three years to the company. Another entry, years later, found me still struggling with similar concerns:

I am really passionate about development economics and ending poverty and hunger. Much more so than I am about email marketing. I can make positive social change through business and through iContact, but is it enough? Probably the biggest recurring tension in my life right now is the struggle between wanting to build iContact over the next three years and realizing how great of an opportunity it is and knowing deep down I am not yet fully aligning what I love with what I do. I am enjoying building iContact, have wonderful people around me, and am learning tons. But I know something is missing . . .

Was I just a corporate sellout? Sometimes I felt as if I was trading some of the most productive years of my life in exchange for experience, connections, and funds that would hopefully help me create much more social value for humanity in the future. I hoped the payoff would be worth it. I wrote to a friend a the time that I felt kind of like a jumbo-jet with lots of fuel that’s been instructed to keep circling the runway.

In the meantime, I continued reading everything I could on poverty and economic development.  Hernando de Soto’s The Mystery of Capital, Jeffrey Sachs’ The End of Poverty, William Easterly’s The White Man’s Burden, and C.K. Prahalad’s The Fortune at the Bottom of the Pyramid influenced me greatly. In 2005, I launched a blog called The Anti-Poverty Campaign, which later evolved into The Humanity Campaign, where I explored my interest in the field. I started wearing a wristband from the One Campaign with the message: Make Poverty History, so that my overriding life mission was never far from my mind.

It was around this time that I also learned the term “social entrepreneurship.” Through attending conferences and gatherings like Fortune Brainstorm, Summit Series, StartingBloc, and Skoll World Forum, I got connected to passionate entrepreneurs who were dedicated to doing well and doing good. Inspired, I started hosting monthly Social Entrepreneurship Meetups at my house in Chapel Hill. It was through these meetups that I met a guy named Roey who was working on an initiative in Uganda to empower people in agricultural communities called the Full Belly Project. He suggested I go with him when he returned in the Summer of 2008 and I gladly agreed. Seven years after Mr. Fletcher had awakened in me a passion for alleviating poverty, I would finally have the chance to see firsthand what I had been passionate about working to change. I was excited and a little scared, not wanting to seem like some idealistic, out-of-touch corporate guy.  I’d only encountered serious poverty once before, on a Habitat for Humanity trip to Belize at the age of sixteen. I knew that in Sub-Saharan Africa, the poverty was even more extreme. And I knew that was where I needed to go. Africa had been calling to me; now I hoped she would accept me.

Traveling to East Africa

Ryan_africa
Encountering extreme poverty and the resilience of the human spirit on my journeys to Africa affected me deeply.

My first interaction with Africans came before I can remember. My parents used to host African potlucks at their apartment in Pittsburgh when I was just a year or two old. In Woonsocket, my Dad welcomed dozens of Liberian refugees into the Church community. I remember talking to the Liberians on Sundays at coffee hour and loving their colorful attire and dazzling smiles. I was approaching my twenty-fourth birthday when I arrived on the continent for the first time.

Landing at Entebbe airport, I was shocked—not just by the poverty but by the signs of economic opportunity. Mobile phone ads covered the walls—the first hint of an idea that would later change my life. We saw a lot of poverty too on that first trip. And I fell in love: with the people, with the land, with the sense of freedom and relaxation I felt driving the dirt roads. I remember putting out my hand to feel the African air and having the sense that time had stopped and I could do anything. Dancing in villages in Uganda, I felt more connected to my human spirit than at any time in my life. I knew I would return to Africa many, many times. I wrote about the experience on my blog.

Uganda really is a beautiful country. It has lots of challenges, yet lots of real opportunities. Seeing the extreme poverty that exists there firsthand was difficult, yet instructive and very helpful to my understanding of the issue. 89% of Ugandans are currently subsistence farmers, so a great majority of the population lives in rural villages. It was very common to see families of 6 to 8 living in mud and stick one-room shacks with tin or grass roofs with dried dung floors with no running water, toilet, or electricity. The primary school we visited in Mityana in the West had neither windows nor doors and had dirt floors. I was amazed at the extent to which the children and most adults living in these most difficult conditions maintain such a level of happiness and non-complaint.

In 2009 I went back, this time on a twelve-day trip to Kenya and Uganda with a friend and girlfriend. During this trip I heard stories that seared themselves into my memory. Like the story of the 139 young girls kidnapped by the LRA, of whom 30 were kept as sex slaves for as long as 13 years, and six were killed trying to escape. Like the story of high-school kids hiding in a snake-infested ceiling drop to avoid kidnap by the LRA. The overriding memory from that trip was a visit to Kibera, in Nairobi—the largest slum in Africa. Covering an area not much bigger than Central Park, Kibera has more than one million residents. A friend and fellow Tar Heel, Rye Barcott, had founded an organization called Carolina for Kibera (CFK), which provided a girls center, a clinic, a waste management program, and a youth soccer program for the residents of the slum. He took us with him on CFK’s “fun day,” where kids did a couple hours of community service cleaning up the area and then participated in a soccer tournament. We grabbed rakes and helped remove trash from the streets and sewers.

Kibera
Kibera: the largest slum in Africa

It was a life-altering experience walking through the dirt paths, dodging stray dogs and chickens, raking clothes, water bottles, shoes, fruit, corn, and litter out of open drainage ditches filled with brown water and human excrement. I had seen rural poverty on my previous visit, but this urban poverty was of a different order, intensified by the filth and cramped living conditions. I learned that the contamination of the streets was due not only to the open sewers, but to the common use of what are known as “flying toilets”—plastic bags which are then thrown out of windows into the streets, attracting flies and spreading disease. I also learned that an estimated 1/5 of the 2.2 million Kenyans living with HIV at that time lived in Kibera.

Yet amidst it all, the community seemed vibrant, entrepreneurial, alive, and musical. We met so many wonderful people, including a seventeen-year-old girl who offered to escort us through the streets at the end of the day (we had been warned not to walk alone.) She told us that both her parents had died of AIDS. She had moved in with her grandfather, but he soon died too, so she moved in with her pastor, but he abused her. She was effectively alone in the world, struggling to survive in the midst of Kibera. All she wanted was a small place of her own.

Kibera 2
Amidst the appalling poverty, the people I met in Kibera amazed me with their vitality and positivity.

The sights, smells, and stories of that day intensified my internal commitment. I’d read about these things, but being in the midst of them affected me so much more deeply. The existence of a place like Kibera was hard to comprehend. How can this be allowed to be in a world of such material plenty and extravagant waste? I asked myself. I was deeply disturbed, but not discouraged. Walking the filthy dirt streets of Kibera but seeing modern high rise buildings just a couple miles away in the background, my attention was naturally drawn to ask deeper questions about the sources of these inequities–the underlying systemic problems that created a lack of access to opportunity for so many. In the years to come, I would return to Africa several times, each visit intensifying both my sense of pain at the inequality I witnessed and my sense of excitement about the opportunities that this strangely beautiful continent held. But first, there were challenges and opportunities to be confronted closer to home.

The Month I Grew Up

“Will always remember October 2009 as the ‘month I grew up,’” I wrote in my journal toward the end of the month. The past few weeks had been the most challenging of my life. Within one week, my business partner Aaron found out that he had thyroid cancer, and two days later, our major prospective buyer had inexplicably pulled out of a $95 million deal, after a five-month process that had seemed all but done. Reeling from these two unexpected blows, I realized what a sheltered life I had led up till that point. Nothing like this had ever happened to me.

The events of that month triggered a serious soul-searching for me. I felt confronted with mortality, with the fragility and unpredictability of life. And my growing discontent with waiting before I could fully live my purpose reached a breaking point. I couldn’t waste any more time. So if I was going to be stuck at iContact for another three years (which was looking likely with the sale falling through), I was going to have to find a way to align what I cared about with what I did every day. One of the valuable things I’d learned from our prospective buyer was that it is possible to integrate philanthropy into a company. As I started learning about “corporate social responsibility” (CSR), I realized we could use iContact to set an example for how to do CSR at  venture-backed high-growth companies. iContact was going to become a vehicle for not just for making money, but for doing good.

Around this same time, my views on how I could best fulfill my mission of ending extreme poverty in Africa were also shifting. I started to see the limitations of charitable aid, and began to think that I could have more impact by investing in African businesses than I could by simply giving away money. Suddenly the dots connected. I could see the all-important link between my work at iContact and my desire to be the “Warren Buffett of Africa” and create hundreds of thousands of jobs on the continent by profitably investing in growing, socially responsible companies. Feeling my confidence return, I wrote in my journal at the end of October:

I’m not going to let iContact wither. I will make it great. This is my defining moment.

Aaron had surgery to remove his thyroid and cancerous cells, and made a good recovery. I told him about my revelation, and together we set out to re-align the company we’d built.

Re-envisioning Our Values

One of the first things we did was to come up with a new set of company values. At iContact  we had ten “Corporate Values,” but at a certain point I realized that I could only remember four of them. This wasn’t good. I remembered hearing at an entrepreneurial executive education program I’d attended that you should never have more values than you can remember, and that for something to be worthy of being considered a company value, it should be so important that you’d be willing to let someone go if they didn’t live up to it. Our values fit neither requirement. If I was to align the company with what I was passionate about, it needed to start with values that I would remember. In December 2009, at our two day Senior Leadership Team  offsite in Chapel Hill, we came up with five values that spelled out the acronym WOWME. WOWME stands for:

WowMe

Wow the Customer
Operate with Urgency
Work Without Mediocrity
Make a Positive Wake
Engage as an Owner

We launched these values at iContact and required that every team member learn them by heart. We put them on people’s ID cards, and on posters all over the office. We resolved to hire and fire by these values, to live up to them ourselves, and to hold each other accountable to them. They inspired me to pick up my game.

Corporate Social Responsibility at iContact

The second major change we made was to dramatically expand our CSR model. Since 2007, iContact had been giving away 1% of it’s payroll to 501(c)(3) non-profit organizations in our communities locally and globally. We also had an annual Habitat for Humanity company house building day each July and we “adopted” a handful of foster children each winter to provide gifts for them. These initial efforts were a start, but not enough. If we were going to make CSR a key differentiator for our company for attracting and retaining top talent and attracting customers who cared about the world, we needed to do much more. If our culture was going to be centered around creating a tangible connection between the work our employees did and true meaning and value creation for the world, we needed an integrated CSR program.

iContact Fdn check
The iContact Foundation enabled us to support local nonprofits as part of our CSR initiative.

On January 8th, 2010 we launched what we call the 4-1s Corporate Social Responsibility Model at iContact, which meant that we would take 1% of equity, 1% of product, 1% of employee time, and 1% of payroll and invest it in local and global non-profit organizations. Now, in addition to the money we donated, each of our employees had the opportunity to be paid to take 1% of their time (2.5 days off from work) each year to do community service during business hours. We were also able to donate our product to non-profits in North Carolina, and to pledge 1% of the shares of the company to the iContact Foundation. I was thrilled to have a formal CSR program in place, but I knew we were just starting out and had a lot to learn. When Entrepreneur Magazine wrote an article about the 4-1s program in April, I was careful to emphasize that this was just the beginning.

A year later when we completed a hard-nosed analysis of the effects as part of our annual CSR report, we found greater employee commitment and a reduction in overall expenses due to the B corp vendor discount community. I summed up the changes we had made and the results we were seeing in the Fall of 2010 in a detailed Case Study: The Results of iContact’s Initial Foray into Social Responsibility. This experience strengthened my own motivation for building the business, and my view that while the result of a good business is shareholder value creation, the purpose of a good business is addressing human problems and creating value in society.

Scaling Myself

The other big change I made during this tumultuous period of my life was letting go of some of my control of the company. I learned to trust my six-person Senior Leadership Team more deeply, and we established a thirteen-person Leadership Team underneath them. All of this team had more business experience than I do, and I realized that my job was not to ensure they did their jobs the right way but rather to enable them to do their jobs and hold them accountable for the results. This allowed me to get my hands out of the day-to-day operational details and focus on people, strategy, culture, and investment. I was thrilled to be part of a company that was socially responsible, doing good things in the community, and enabling us make a positive social impact as a well as a positive financial impact. In February of 2010, I wrote:

I sit here tonight in my home in Chapel Hill motivated more than ever. iContact is now at a $34M revenue run-rate and growing that by more than $1M each month. We will hire more than 50 new team members in 2010. We had our first ever post-investment EBITDA positive month in December! We’re well on our way to fulfilling our dream of “building a great sustainable company in NC for our customers, employees, and community.” And we’ve got a plan to go from #2 to #1. We have a plan to win. I no longer question whether I’m a corporate sellout just putting in my time. I’m aligned, I’m focused. I’m learning. I’m surrounded by amazing people every day who know how to do what they do so much better than I ever could.

My understanding of business as a force for good really developed during this period. I believed then, and do now, that the purpose of business is to create value for society. And as long as you’re creating positive value in society as a business owner, you will do very well financially. Historically, there has been a misguided notion that the businesses sole purpose is to maximize profits in the short term. I disagree with that wholeheartedly, and believe that the purpose of business is to do well and do good at the same time; to minimize and neutralize impact on the environment and eventually have a positive impact; and to have good labor relations. I also believe businesses should give back as they grow; rather than waiting until they are very large or very successful to start giving back. Many of these things I had intuited for many years, but my perspective crystallized during the Fall/Winter of 2009-2010 when we implemented these principles at iContact. I reflected on what I had learned during that time in a long blog post I wrote in February of 2010, entitled “How I Aligned What I Love With What I Do & Scaled Myself.”

Becoming a B Corporation

B-corp
The “Declaration of Interdependence” we received and proudly displayed in the office when iContact became a certified B-corp.

In May, we took the next major leap in our effort to turn iContact into a leader in social responsibility. I knew that we needed help if we were to really become a Triple Bottom Line company—one that was equally responsible for people, planet, and profits. Serendipitously, I met a guy named Matt Kopac at a Sunday brunch with a group of Durham friends. Matt had just finished up an MBA at Yale and was looking for work in the area with a non-profit or socially responsible enterprise. We brought Matt on as CSR Manager to help us put in place a measurement system for social and environmental impact, manage our 4-1s CSR program, and help us put in place the changes necessary to become a B Corp.

B Corps are a new type of corporation that are legally committed to using the power of business to create public benefit. To become a B Corp, we had to take an assessment that graded us within five categories: accountability, consumers, environment, employees, and community. A pass required 80 points—when we first took the assessment we scored 67. In the eight weeks that followed, Matt led us in an environmental/energy audit and a supplier audit and put in place some needed changes to policies and sustainable supplies.

When we retook the assessment on June 30, we passed the 80 point threshold and became officially certified as a B Corp. We had reached the next milestone in our process of becoming a leader in social responsibility and creating a company culture that tied the work each employee did every day with meaningful impact. We received a signed “Declaration of Interdependence,” which we proudly displayed in the office. We began to track our social and environmental impact and include these metrics among our core indicators of success.

Investing in African Companies

As my appreciation for the social power of my own business grew, so did my interest in using business as a force for good in the developing world as well. A seed had been sown on that unforgettable visit to Kibera the previous summer. I had been touring the organizations I’d donated to, but something was feeling increasingly wrong. The moment of clarity came during a conversation with a fifteen year-old boy in the slum who had taught himself the web application framework Ruby on Rails at Nairobi’s iHub incubator. While he was glad the community non-profits existed, he said what he really wanted was employment, or the capital to invest in starting up his own make-shift programming shop. The misalignment that I’d been feeling on that trip suddenly made sense, as I realized that I could make a more sustainable impact by using my personal capital to invest in responsible and growing companies than I could by giving charitable aid. While effective government, transparent institutions, and a strong civil society are certainly needed to enable sustainable economic development, I felt that I could best utilize my skills as an entrepreneur and investor by focusing on allocating growth capital to companies in frontier markets.

When I returned home, I launched a small angel investment fund called HumanityFund. On January 4th, I had made my first equity investment in an African business, becoming a 10% owner of Village Energy Ltd., of Kampala, Uganda, which was bringing a $60 solar-panel-powered LED lighting solution to rural village homes through a microfinance and franchise distribution model. Later that year I made two more investments in Kenya and one in Tanzania. I wrote:

For four years I’ve been personally making contributions to non-profit organizations focused on ending global poverty. My philosophy has changed on economic development over the past year. Today I believe that while effectively monitored bilateral aid is an important component of ending extreme poverty and emergency humanitarian aid is morally and critically necessary in many locations, an investment in a local entrepreneur in Africa will have much greater long term impact in terms of job creation, tax revenue base, and constituent-focused democratic institution building. There is SO much opportunity to invest in Africa and so many entrepreneurs and companies poised for growth.

I was also acting as Board Chairman of Nourish International, a 501(c)(3) non-profit organization that teaches entrepreneurship to college students who then use the net profits from their ventures to invest in community-based organizations in the developing world. I had joined their board in 2007, and was elected chapman in 2009. I loved this work. I even thought I might live in Africa one day, if my life circumstances allowed. In the meantime, I got a tattoo of the continent on my back as a symbol of my love for and commitment to this magical place.

Our Series B Fundraise from JMI

While I was making investments in Africa, I was on the other side of the negotiating table back home. With no sale on the horizon, iContact needed to raise our Series B round of investment capital in order to keep growing. I did a “road show” in Silicon Valley, New York, and Boston, pitching 25 or 30 venture capital firms. We received 3 or 4 term sheets, and ended up raising $40 million from JMI Equity of Baltimore, Maryland, in August 2010.

We planned to use these new funds to make significant investments in sales and marketing, back-end technology, our product features and usability, global expansion, and, of course, our people. To be honest, however, in retrospect, we weren’t clear enough about how we planned to use the money. And given that lack of clarity, we raised too much. We were in defensive mode, trying to find an edge against a competitor who had started giving away a free product, dramatically increasing their sales. But money doesn’t fix a broken model. It just dilutes your pool of shareholders.

From the vantage point of 2013, I don’t regret raising $40 million. I know that it helped me achieve some key life goals, including the eventual sale of iContact. But in the short term, I quickly paid the price. Suddenly I felt the pressure of having a large VC firm owning 35% of our company, at a high entry point valuation, and expecting me to increase the value of their investment. Our carefully built culture started feeling less like a family and more like a factory.

When a company gets large, it becomes more like a cruise ship than a speedboat. Changing the direction of the cruise ship is a much slower and more cumbersome process. The little start-up that Aaron and I had run from college dorms was now employing almost 300 people.  My entrepreneurial bias toward acting first and asking later had to be tempered with a respect for systems, procedures, and compliance, all of which took time. Decisions had a lot more weight and were slower to execute, yet they were still mine to make, staring out of the window in my office knowing it was me making the final call.

In April 2011, after many months of planning and putting systems in place, I took a big risk: launching a free edition of our product. A major competitor had done the same, and I felt it was necessary to change our customer acquisition model if we were to stay in the game. But I knew it was a potentially destabilizing move to make. I reflected in my journal:

It looks like we finally have figured out how to scale revenue growth, and bam—I’m going to change it all up in 2 weeks. I’m taking a big ship and steering it into the unknown. A $48M business could be a $42M business in a month. Damn it feels scary. Here we come, iContact Free Edition. April 2011 is going to be a crazy month.

iContact Free
Launching the iContact free edition.

A few weeks later, I was writing: “I need a COO and I need a long relaxing vacation. I need to take time to meditate.” I was feeling stifled as an operational manager, pulled away from my strengths as a leader and a creative thinker by the day-to-day demands of running a 270-employee business. I worked better when my attention could be primarily outward facing: building key relationships, raising capital, strategic thinking, customer advocacy, understanding the market, and driving our social responsibility. Instead, I found 90% of my attention being trapped internally, which leveraged neither my skill-set nor my passion.

Within a few months, I was facing some really tough decisions. My gamble hadn’t paid off—at least, not quickly enough to convince the Board to stick with it. In retrospect, I had not prepared them well enough to understand the length of time the new customer acquisition strategy would take to work. I had faith in the choices I’d made, but the hard truth was that I was no longer in control of the company, thanks to the amount of capital we’d raised. We reverted back to the old model before the new one had time to show its potential.

Our revenue looked likely to be flat that quarter for the first time ever. “Everything feels like it’s falling apart when revenue stops growing,“ I wrote. I felt responsible, knowing we’d been late to respond to changes in the market and our competitors. A large layoff that summer was looking inevitable. Accustomed to feeling energized and positive most of the time, I was rocked by mood swings and anxiety, feeling in over my head. I couldn’t stop thinking about the looming layoffs. Would it be better to offer a nice severance package and take volunteers, or to cut the bottom 10% from a performance standpoint? Could I have avoided this if I’d made smarter decisions? In one of the many journal entries agonizing over this decision, I reflected:

We’re looking at letting go 40-50 people, which just breaks my heart. I know that happens every day in corporate America. But this isn’t corporate America. This is iContact. And it’s my fault. I own it personally and it’s a burden I carry and it’s hard.

In September 2011, convinced I was finally going to have to hand over my position as CEO to someone more suited to the task, I wrote in my journal:

Cried as I left work tonight. It’s been 9 years I’ve worked on this. I thought we would sell at the end. Perhaps we raised too much money. So many lessons learned. But in the end an amazing experience. Time to find the right next leader.

I often regretted that we had not tried harder to sell the company the previous year, when we were still growing more quickly. I’d learned a lot about leadership during these tough times, but I worried I was losing the optimism and passion that was the key to realizing my dreams. I felt like I was half 12-year-old and half 40-year-old. One day I could be in a board meeting for my company, the next I could be learning hip-hop moves from the kids in the Kibera slum. Would I ever find that mid-point where the two could truly integrate?

Selling iContact to Vocus

celebrating the sale
A dream come true.

In December 2012, after spending a day interviewing potential CEOs, I got an unexpected call. Vocus, a large public software company, was interested in acquiring iContact. I tried to temper my excitement, having learned the hard way not to get invested in such hopes until they got a lot more concrete. We’d been down that path a good many times in the past few years, and it hadn’t led anywhere yet. Plus, we had a senior leadership team retreat starting the next day, and I didn’t want to compromise my investment in our future with thoughts of an impending exit.

A month later, however, sitting in a McDonalds in Florida while visiting my parents, I got a text that almost made me break down in tears. Was I ready to sign the LOI tonight? I could not have been more ready. It had been a nerve-racking few days of negotiation, teetering on the edge of failure numerous times, but it looked like we were nearing a deal. I felt like I was about to win the lottery—which for me meant getting to work on what I truly loved:

Hopefully it gets done and I can focus the rest of life on finding truly huge human problems to solve.

On February 26, 2012, the day before my Dad’s 74th birthday, we finally got there:

Wow. It closed. 9 years of hard work. It’s such a relief to have it done. $168.9M enterprise value. $177M equity value. I can do so much good now.

Getting to tell my Dad the news on his birthday was one of the best moments of my life. He was so proud of me. By that point, we had built the company to 70,000 paying customers, over a million users, $49 million in revenue, and 300 employees. With the sale, I was meeting a goal that I had been wearing on a wristband for the past couple of years: “$100 million in 2012.” I was happy with the terms of the sale, knowing that my baby would stay in NC and be well taken care of. I still had to face the tough task of making some layoffs, which clouded my happiness quite heavily—I wished we could have avoided that. I did it with as much dignity and respect as I could, speaking to each person one to one, and Aaron and I made sure that they each got an appropriate severance package. And then I was done. Vocus only wanted me to stay a month to help with the transition—a very unusual but welcome change from the couple of years that is more typical. My last day at iContact was March 21. With a mixture of excitement and sadness I said goodbye to the team I’d come to feel were my family and the culture in which I’d grown so much.

Facing My Mother’s Death

I wish I could say that we all lived happily ever after. But of course, life doesn’t work that way. Since November, my mom had been battling brain cancer. Diagnosed with a fast-growing glioblastoma brain tumor in the frontal left side of her brain, she deteriorated fast over the following months, going from being a normal, fully functional, healthy 59-year-old woman to being bedridden and unable to talk. While I was working to secure my future through the iContact sale, my excitement was shot through with sadness at not knowing how much of that future she’d be around to share with me. It was hard to let in that she’d never see me finish grad school, and that I’d never have the opportunity to watch her inspire my future wife and kids as she had me. Faced with her impending mortality, I regretted how much I had focused on work, not fully recognizing the need for balance in life and spending more time with family. The doctors recommended aggressive radiation and chemo, but at Christmas they had told us she had only three weeks to live.

Ryan & Mom 2
My mother, Pauline Allis–one of the greatest inspirations in my life.

Christmas 2012 with the family was bittersweet, filled with wonderful moments and painful realities. Sitting at her bedside in hospital all day and often all night, it was hard to watch her sleep, knowing that the tumor was growing inside her. At times, I was amazed by her calm and determination in the face of her debilitating disease and the ravages of the treatment. At other times, I ached to watch her struggling to even open her eyes and tell me she loved me, even when she could no longer remember my name. One time I just screamed at the top of my lungs and pounded the sidewalk in despair when the doctor told us there was nothing more that could be done.

We worked fourteen-hours per day figuring out a complex new world and ensuring care was coordinated between the primary doctor, radiologist, oncologist, and neurosurgeon. I learned the importance of just being there through those days—filling the seemingly inevitable gaps in communication between the many different doctors who came and went. Thankfully, she rallied, and we were blessed with a few more months together. Mom’s cancer was the most painful experience I’ve every been through, but the strength with which my family came together to support and love each other during those months made it also one of the most memorable times of my life. Watching the love that my Dad showed her through these trials defined for me the kind of partner I want to be one day, and the kind of love I am seeking.

I’ll never forget the day I had to forcibly restrain Mom so that the radiation technicians could create a plastic mask mold for her face. Something inside me changed forever as I held her hands down, knowing that it was the only thing to do to save her. It felt like the day I became ready to become a parent myself someday.

Watching mom fight for her life deepened the appreciation for the preciousness of life that had awoken in me when Aaron got cancer. When you confront your parents’ mortality, you’re actually confronting your own. I had never realized before how much can be communicated in a simple smile, or simply by sitting in silence. For someone with a tendency to live in the future, it was an important life lesson. Sitting by her bedside one day in February, I wrote:

My Mom taught me to be an optimist many years ago and I will always be one, The doctors said she had three weeks to live–and that was eight weeks ago. Every day we now see as a gift and a miracle. Every day is truly such a gift. Live now. Don’t delay ensuring that which you are spending your time on daily aligns with the change you wish to make in the world.

Life is of course unpredictable. Inevitably, we all die. What I’ve learned most from mom is that what matters is what you do with the time you have between birth and death–the memories you create, the people you impact, and whether or not you use that time to make a difference in the lives of others.

“Perhaps life isn’t meant to be easy,” I wrote in a letter to a friend. “It certainly has its times of sorrow and difficulty. But perhaps the truly joyous moments can only be deeply felt after one has gone through the sorrowful moments. Our role, perhaps, is to live life joyfully and to its fullest while being open to the inevitable sad moments that provide much wisdom. For you and I, we have so, so much and our choices are but choices between amazing possibilities. And so, I will always be deeply grateful and joyful and yet carry a deep desire to contribute to those of different circumstance.”

That May, I was in Nairobi on my fifth trip to Africa, when I received a text message from my dad that mom was deteriorating. I changed my flight home to go visit her, knowing in my heart that I might only one more chance to see my mom alive. On May 25, 2012, she passed away peacefully. It hurt more than I could possibly say, and yet it was strangely beautiful. I had no particular belief about what happens after death, but as her life energy was released from her suffering body, it seemed to me that simply passed into another form of expression. Part of it, I felt sure, was channeled into me, as a sense of greater focus and resilience than I had ever experienced. As her body lay there, at peace, and her presence was still palpable in the room, I thanked her for being such a tremendous inspiration in my life. I said aloud:

I just want you to know I will use my life for good. I will always remember you. And in your name, I will work every day for the rest of my life to create a sustainable world in which every human being has access to food, water, shelter, education, and medicine; and is treated equally under the law. Thank you for teaching me to think globally, to be a world traveler, to read, and to care about others. I love you.”

Mom’s death reminded me just how little time I might have left to do this. Who could say how long I would live—it could be 3 more hours, 30 more years, or even 300 years if science figured out the secret to life-extension while I was still healthy. I felt a renewed urgency to get my dreams on track–starting with one that I knew would have made my mom proud: getting my MBA from Harvard Business School.

Attending the Singularity University Executive Program

I’m a very driven, goal-oriented person, but I’m also not afraid to adapt or change my plans completely if new information presents itself. In this instance, the catalyst for my change in direction was a weeklong executive ed program that I attended in April of 2012 at Singularity University, an interdisciplinary institution based at the NASA Ames campus in California’s Silicon Valley. Co-founded by entrepreneur and futurist Peter Diamandis and inventor Ray Kurzweil, SingularityU offers programs that help leaders gain what they call an “over-the-horizon” view—to understand the opportunities and disruptive influences of emerging, exponentially accelerating technologies.

The first thing that struck me when I arrived on campus was that these people thought BIG. As they put it in their mission statement, “The goal of Singularity University is to positively impact humanity by assembling, supporting, educating and inspiring future leaders across the globe who can harness the power of exponential technologies to improve the lives of a billion people within a decade.”

A billion people. That was the kind of impact I wanted to have. It was inspiring to be among people who weren’t afraid to think in these terms, and who understood the kinds of technologies that could actually address what they called the “grand challenges”—global health, water, energy, environment, food, education, security, and poverty.

The professors at SU talked about the world as if there were no real constraints—and yet they were not simply naïve idealists. Their bold visions were grounded in real data, and informed by an understanding of the exponential nature of change.

During that week, I learned about synthetic biology, artificial intelligence, machine learning, space travel, life extension, future of medicine, and many more emerging technologies that were much more advanced than I had previously imagined. And I learned a simple but life-transforming truth: that the world is actually getting better. Looking around at the incredible challenges that we are confronted with, it’s easy to miss this fact. Turn on the television, and it seems like all you see is one conflict or disaster after another. But what they taught us at SU was that if you look at the data for all the significant metrics, as a species we are so much better off than we were a hundred years ago, or two hundred, or five hundred. The only metrics that doesn’t show clear improvement are those that measure global climate, such as CO2 parts per million. (See my article The World Is Actually Getting Better for a more detailed discussion of this perspective.)

This is not to say, of course, that we don’t still have tremendous problems to solve. But this perspective gave me a deeper faith in our potential to develop and overcome the challenges we confront through our amazing human capacity for innovation. Contemplating technology and the ways in which it has impacted human culture through history, it was clear that new technologies are not just an output of cultural change, but also a catalyst—transforming the ways human beings think and the ways we connect.

As Diamandes explains in his book Abundance, greater connectivity leads to greater opportunities for cooperation, which has been a fundamental driver of evolutionary progress ever since the first eukaryotic cell emerged two billion years ago as a result of the cooperation of single-celled life forms. We’ve all heard of evolution as a story of ruthless competition and “survival of the fittest” but what’s less commonly known is that it’s a story of cooperation.

The journalist and scholar Robert Wright has tracked the progress of cooperation in human civilizations as the expansion of “win-win” or “non-zero-sum” arrangements between groups of people. He points out that as our economic interdependence grows, we are more likely to see other people as “us” and not “them” and therefore create mutually beneficial outcomes for more of the world. Human “empathy circles” as scholar Peter Singer called them, have steadily expanded throughout history, from the family, to the tribe, to religious affiliations and nations, and now the full human species.

Today, as globalization links our fates more and more tightly together, some of us are starting to see ourselves not simply as members of families, tribes, religious groups, or nations, but as citizens of one world, brothers and sisters in one human family. And as Wright points out, information technology has been central to this process. The more we are connected to people who are different from us, who live in faraway places and dramatically different cultures, the more likely we are to see the entire world as our “family” and make choices that will positively impact all of us.

During my time at SU, with all these ideas lighting up my mind, I started thinking seriously about the power of mobile technology to transform the way human beings think and communicate and relate to each other. If you want to impact a billion people, I thought, what better way to reach them than through a mobile app that makes it easier for people to connect and to see themselves as part of a global family? An idea was taking shape that was both practical and potentially powerful. I had seen the power of connection in my own life, building an amazing global network that had expanded my worldview and made so much possible. What if I couldsee that network, on a map, and be able to communicate with everyone I knew through a single interface? And what if I could create an app that gave other people that opportunity, whether they were based in New York or a village in rural Kenya?

I could feel the inner compass that had been guiding me for so many years starting to recalibrate and point me in a new direction. Maybe I didn’t need to take up a new profession as an investor to make a difference. Maybe I could have an even greater impact by doing what I already did best—building a software company. Maybe I could build a company that didn’t just use its profits to do good after the fact, but had a world-changing vision built into its DNA from the very beginning. My entrepreneurial spirit was reawakened, and I realized that I was in the perfect place for it to thrive—Silicon Valley, among the world’s greatest software companies. I had found my new home.

Meeting My Cofounder Anima

By the time I left Singularity U, I not only had a new business idea and a renewed inspiration, but I had also, although I didn’t know it yet, met my cofounder. On the last day of the program, I played hooky to go hang out with a Google software engineer I’d met who I hoped might one day be part of my company. We went back to his house and he introduced me to his girlfriend, Anima Sarah LaVoy. “This guy is working on a project that is exactly the thing you’ve been talking about wanting for a long time,” he told her. He seemed a bit skeptical in the face of my enthusiasm and conviction, but when I showed her my deck with the idea for my new business, which was called Connect, she got it immediately.

“For the past four years,” she explained, “I’ve desperately been looking for a way to ‘map my people.’ I want to keep track of my network, and I want to know who is where, when.” She told me how she’d created an elaborate hack, involving adding each new connection to multiple social platforms and tagging them in gmail to identify them by location, networks, and so on. It was complicated, but it worked. Friends were so impressed with her system that they asked her to share it, and she’d created a set of instructions that was widely shared among her network. “The most important thing any of us have are our networks,” she said. “I keep meeting all these brilliant people, coming from amazing new worlds of ideas, who I want to continue to interact with and learn from, and most importantly, start to connect with one another so we can see bigger and more interesting problems and perspectives.”

Anima later shared with me that when I arrived at her apartment, she’d been sitting in the back room thinking about her future. On the notice board in front of her were three sticky notes that identified qualities of the kind of company or project she wanted to work on. They said: “Leverage,” “An idea whose time has come,” and “based on an understanding of the human operating system.” Behind her were a host of sticky notes with names on them and business cards–an attempt to visually map her network of amazing friends and colleagues on the wall. I showed up in her living room, ready to hire the best engineers I could find and build an app to do exactly that.

Interestingly, Anima’s immediate response, following her excitement about the general idea, was to try to discourage me from doing that. She sensed that my project fulfilled two of her criteria–it had the potential for significant leverage, and it was an idea whose time had come. But she was concerned that it did not meet the third–it was not “based on an understanding of the human operating system.” This one mattered deeply to her. In her own journey, she’d come to understand that many of our technologies and systems are external reflections of the “internal” ways that we humans see the world and the way we operate. To build an app to successfully solve a complex human problem requires a nuanced understanding of what actually makes people tick. As she explained to me later, “My first challenge was convincing you that this was not a technical problem. It wasn’t going to be solved by engineers. You didn’t need a Chief Technology Officer, you needed a Chief Human Officer.”

I didn’t fully realize it at the time, but this woman I barely knew, with very little business experience, was a perfect complement to my skill-set and background. She had a wealth of knowledge about people and their world views, and an instinctive sense that getting Connect right would involve thinking deeply about the workings of our own minds, and understanding how connectors like myself and herself “think in networks.”

Over the next week, we got to know each other better, and my respect for Anima grew, as well as my instinctive trust in her. I didn’t know exactly how, but I knew she was a key part of this new life that was coming into focus. I enlisted her to help me search for a house where I could live for the summer and start building Connect. I was falling in love with the city and its people, and couldn’t wait to own a small piece of it. I wrote to a friend:

“My last week has been absolutely incredible. The intelligence and ambition and care and values of the people here is unmatched anywhere in the world. My best friends from so many different walks of life all happen to be living within a 4 block radius of a park called Dolores Park between the neighborhoods of the Castro and the Mission. The values-driven innovative culture here is palpable. It’s sort of like 1968 with iPhones. Imagine if the social justice passion of the 60s were combined with the connection and communication technology of 2012. Imagine how you could change the world in that environment. And then you wake up with a smile and realize that’s what’s actually happening.

It feels like the future here. People are commonly talking about genomics, self-driving cars, 3D printing, the application of smart phone diagnostics to global public health in remote villages, artificial intelligence, robotics, and solving humanity’s greatest challenges. Oh, and they dance and dress up in banana costumes! I may have found my tribe.”

After an intensive few days of house-hunting, we showed up one day to view a house in the Castro that a friend had told us was on the market. It was rumored to have been built by rock stars in the eighties (I later found out that the rock stars had come after it was built, but they had certainly had an impact on its aesthetic.) We climbed a steep San Francisco hill, walked through the front door and up a flight of stairs, and the first thing we saw was a swimming pool. In the living room. It was an over-the-top, exuberant, impractical house. And it went on, level after level, from the windowless, cave-like media room to the panoramic views from the glass-walled kitchen to the stunning roof terrace. I would be crazy to buy such a house to turn into an office–which is precisely why I fell in love with it. I wanted a space that combined work with play, that would foster creativity and out-of-the-box thinking, and that would allow me to convene social events for my network as well as build a business. This house had that potential. Standing in the kitchen, looking out over the city, I felt like I was standing on the bridge of the Enterprise. I made an offer on the spot, and we christened the house “the Starship.”

Leaving Anima to finalize the purchase of the house and furnish it, I headed to Boston for my HBS interview and the flew to Kenya with the UN Foundation to visit Nairobi and the Kakuma Refugee Camp near the South Sudan border. It was in Kakuma, a world away from Silicon Valley, that I fully connected the dots between my lifelong passion for improving global access to opportunity  and my new business idea. At Singularity University, I’d intuited that helping people to connect with each other could have an impact on raising awareness of our global interdependence, which could only have a beneficial effect on the many problems of the world. At Kakuma, I saw the more practical implications as well.

Kakuma is a refugee camp with approximately 70,000 residents. The people there have almost nothing, struggling to pull together the basic necessities for survival. And yet, in the midst of that hardship, I met a teenage boy named Richard who had an Android mobile phone and an entrepreneurial spirit. Richard was determined to get to Nairobi so he could start a business, and he was saving money by renting out his mobile phone for twenty-five cents an hour. Watching this kid with his phone, I was struck by an obvious yet significant realization–smart mobile touch devices will be nearly ubiquitous globally within just a few years. And if the bright-eyed kids in Kakuma refugee camp had an app that allowed them to see and connect with friends and family in other places, they might realize there was a world outside their UN shelters and be more likely to find a way out of there. As I boarded the plane home to San Francisco, I couldn’t wait to start building it.

Through the summer of 2012, I lived in our office on the hill, and with Anima now on board as my cofounder and Chief Human Officer, started creating the new company. We hired two more members of our founding team, Zach Melamed and Lilia Tamm, and launched our alpha product in August. I half-jokingly described it as being “sort of like if Facebook, LinkedIn, and Salesforce had a baby and it was easy enough for consumers to use (yet powerful enough for large amounts of data) and designed for touch devices first.”

Attending Harvard Business School

Harvard Section F
The HBS Class of 2014, Section F

Attending HBS had been a longtime dream of mine. When I created my first vision board, back in 2009, I had included a Harvard University Graduate Diploma, onto which I’d pasted my name. That’s an ambitious goal for anyone, but it was even more so for me, as I had left the University of North Carolina at the age of 19 to start iContact, never completing my undergraduate studies. At the time, I didn’t even know if it was possible to get into Harvard without an undergraduate degree, but I set the goal anyway. Later, I heard of a handful of cases where people with significant business experience were admitted to HBS without a college degree, so my dream seemed more attainable. In early 2012, soon after my mom got sick, with the sale of iContact finally within reach, I had decided to apply and start studying for the GMAT. My plan at the time had been to go to school, get my MBA, and then become an investor in emerging markets, dividing my time between NYC and Africa.

I got the long-awaited call on May 17, 2012. A message came to the nursing home where I was sitting with my mom, just 12 days before she died. It meant so much to me to be able to tell my mom that I’d achieved this long-held dream. By that time, however, my vision for my future had made a surprising shift. A new business idea had captured my entrepreneurial imagination—one that I thought could have more global impact than even my investing activities. I still planned to attend HBS, but I was now planning to spend the coming summer in San Francisco building a team for a new company, before heading to Cambridge in the Fall.

At the end of August 2012, I packed up and headed across the country to HBS, leaving Anima to steer the Starship. Some of my entrepreneurial friends in San Francisco and North Carolina had a difficult time understanding why I’d go to business school—historically considered a place for the risk-averse, old-school corporate types rather than adventurous entrepreneurs like myself. But I had a number of reasons for feeling that this was the right next step at this point in my life. My interest in investing and international economics had not lessened, and I was excited about the opportunities to immerse myself in Harvard’s intellectually rich environment and learn more. And while I had learned a lot about entrepreneurship and leadership in my time at iContact, I also recognized that in the last few years, when the company grew beyond 150 people, the gaps in my skill set and knowledge had held us back. Harvard was the best place in the world to learn the managerial skills that I hoped I would soon need again, as Connect grew from a small startup to a successful company. I also knew that the business school had recently launched a new Innovation Lab (iLab) with available office space for startups, where I’d be able to work on Connect between classes and stay in close touch with the team.

Arriving in Cambridge in August 2012, I was exhilarated, giddy, like a little kid in a candy store. It felt like a great privilege to have these twenty months ahead of me to learn and grow and be pushed. After so many years of being a leader, I loved the experience of being a student again. One of the first things that struck me was the caliber and diversity of my classmates. In my “section” of about ninety students (one of ten), there were at least two Ph.Ds, two attorneys, two MBA/MDs, a Navy officer, an Army officer, a solar energy entrepreneur, a fashion entrepreneur, a guy who ran a hospital, and a nuclear engineer, not to mention some of the sharpest consultants, investors, and bankers I’d ever met. I had classmates from Nigeria, France, Russia, Japan, China, India, Singapore, and Brazil.

Harvard Business School, Section F, October 2012
Harvard Business School, Section F, October 2012

One common denominator among us was that we all cared about making a difference in the world and building shared value. I’d heard that this was something HBS was consciously selecting for, and that one the primary admissions criteria for interviewers was simply: “Does this person inspire you?” During my second week of school, we had a Section lunch with Rawi Abdelal, the Chair of the MBA Required Curriculum (first year), who shared with us his view on the purpose of attending HBS. He said our time there would help us:

  1. Develop our own worldview and sense of how the world works;
  2. Enhance our ability to see the whole;
  3. Spend two fleeting years imagining how a new generation of business leaders will engage with and change the world; and
  4. Reimagine our place in the world.

He summed up what he called the “HBS Deal”: “We will teach you how the world works now. You go make it better.” He shared his excitement at being part of what he called an extraordinary moment–an inflection point in globalization and at a new point in the evolution of business leadership.

It quickly became clear to me that HBS is much a leadership school as it is a business school. It is a place for future and current leaders to refine their skillsets for building and growing sustainable organizational structures regardless of sector and accomplish much more than they could individually while meeting the people that will help them on their journey to impact the world at scale. I felt privileged to be able to be there.

Learning Management Through the HBS Case Method

I quickly realized that no matter what I or any one of my classmates had accomplished before school, it was more or less impossible to bring even a modicum of arrogance into the classroom, as everyone was equally impressive. I learned as much from my classmates as I did from my professors, who acted more as facilitators than instructors.

HBS classroom
The Harvard teaching method made a big impact on my thinking process

Harvard’s teaching model is the “case method”—based around 15-25 page documents which cover actual historical business situations from the perspective of a main character (called a protagonist) with a handful of tables and exhibits with additional detail. The HBS learning model began with individual preparation of cases, then small-group discussion and projects in groups of 6, then section level 90 person facilitated class discussions, and then individual reflection and integration (which I liked to do via blogging).

We were encouraged us to share our conclusions with our classmates—and more importantly, to share the thought processes behind our conclusions. With the data identified and thought processes highlighted, we could better discuss them and learn from the variety of perspectives.

The case method works because everyone in the room is smart and experienced. There are no laptops. There are no mobile phones. Just eighty minutes of poring over every detail and taking away the enduring lessons from a complex picture—three times per day. You never know when you’ll be cold called to present/summarize the case to your classmates, creating internal pressure to be ready for your moment. I found that almost everyone was present and engaged, even if they’d been up till 3am the night before.

The professors would often put the students in the roles of the case protagonists and at times ask us to role play critical moments in a beautifully improvised learning experience that, when done right, could be magical.

I learned to track mentally with each classmate’s comment, in order to be able to be ready to make the next comment, though quality of commentary was more critical than quantity. A quality comment meant one that was relevant and timely and moved the learning process forward in the class. A helpful scribe sat in every classroom taking notes on what was said, enabling later grading of participation by the professor.

What I Learned While at HBS

It would be impossible to do justice in a few short paragraphs to the wealth of knowledge I gained at HBS. For those interested, I reviewed the cases and lessons of my first three weeks in a series of blog posts: Week 1Week 2, and Week 3 at HBS. Multiply that by three semesters and you’ll get some sense of how much I learned in my first year.

If I could sum up my core learning from HBS, it would be that I learned how to drive a cruise ship as opposed to a speedboat. As an entrepreneur in a small startup, you’re driving a speedboat, often through choppy waters, you can turn at high speed and adjust constantly. You may make three important decisions per day, which impact the course of the company. As a leader of a large company, however, you’re steering a cruise ship. You may only make one important decision per year, and such decisions take many months to safely implement. Try to turn too fast, and you risk capsizing the ship.

I’d become all too aware of this difference in my last couple of years at iContact, particularly after we raised our last round of capital. But I never had the operational knowledge or experience to really steer that cruise ship skillfully. At HBS, I learned how to run not just a 300 person company, but a 10,000 person company. I learned how managerial structures could evolve and become more complex yet stay effective when you have many layers between yourself and all the people who work in the organization. I learned how to scale communications; mission, purpose, and values; recruiting; metrics; and much more.

I also learned what I could have done better at iContact. As I reflected in a blog post entitled “What Harvard Business School Is Teaching This Tech Entrepreneur”:

One of the key “HBS takeaways” from the last few weeks for me has been that to continue to grow beyond initial success, an entrepreneurial founder CEO must change their very nature and slow down to:

1. Create effective processes for disciplined information sharing.

2. Give up as many operational roles in the company as possible.

3. Bring the senior team in early on during strategy formation.

This last point was a particularly important lesson. When I’d made the decision to launch the iContact Free Edition, I’d mulled over the decision by myself for many weeks before bringing in my team once I’d made up my mind. I didn’t bring them into the process early enough and I didn’t properly incorporate the information they had into the process. By the time I brought them in, the biased-toward-action entrepreneur in me was ready to act and implement, while from their perspective, we hadn’t even discussed the key strategic decision yet.

At HBS, it became clearer to me that the key trait that leads to success as a start-up CEO—a relentless bias toward action and focus on rapid implementation and incremental improvement—is often the exact trait that causes that same person to become impatient with the processes necessary to prudently make the right decisions and run the company when it grows larger. I concluded:

Sometimes the swiftest speedboat racers (entrepreneurs) end up sinking the cruise ship (the large company) by trying to turn it too fast and too frequently. Larger ships require coordinated plans and defined processes to properly turn their direction. Speedboat racers rarely enjoy “process” and “planning” and often have this “success bias” that makes them think what’s worked so far will continue to work. However, if the entrepreneur is going to build something that long outlives them and makes the impact on the world they hope for, it’s either time to learn to manage a large organization or bring in someone who can.

This was not entirely a new lesson for me—I’d certainly developed as a leader at iContact, and had moved beyond the tendency to micromanage that had characterized my early leadership style. I’d built a wonderful team of people with more experience than me, and learned to let them do their jobs. But when it came to strategy, I’d never let go of my control and go-it-alone tendencies. I did not take enough time to really analyze the internal, customer, and market data with my team, listen to what they were seeing in their departments and in the market, and implement one key focus that brought together the strategic, operational, and financial plans. I believe that prevented us from succeeding further and reaching a greater potential.

I was grateful for this opportunity to reflect and learn, without the weight of an organization on my shoulders. With my next company, I want to be able to scale as a leader as the company grows, hopefully well beyond 300 employees. I also know that these lessons will be key to my future as an investor, sitting on the boards of companies that will hopefully be scaling from startup to well beyond their IPO. I’m sure I’ll never lose my proclivity toward having a relentless focus and a bias toward action in the early stages of new start-ups. But now, if I can get a company beyond a couple hundred employees again, I’ll have much better tools and frameworks to build upon for long-term growth.

At the end of my first semester, the Admissions department asked me to write a welcome letter for the class of 2015. In it, I shared my thoughts on the value of my first semester at HBS:

As I left Aldrich Hall at HBS after finishing my last final of the first semester, I smiled, knowing that I would return home to San Francisco for the Holidays changed forever. I considered a question as I walked through the Spangler tunnel on my way to the taxi stand, “What is it exactly that Harvard Business School does?” Does it teach you finance? Does it teach you marketing? Does it teach you storytelling? Does it teach you operations?

Sure. But that’s not what HBS does.

What HBS does is:

1. Teach you a deeply analytical thinking process critical to making high quality decisions and becoming a transformational leader;

2. Enable you to build a team or find a team of superstars to go after any big world challenge that you wish; and

3. Give you constant psychological reinforcement and mentors that enable you to refine and then actually execute on your dreams to make a difference.

Rewiring My Brain

Another great takeaway from HBS was that I learned how to think in a new way. Through the case method and the new analytical frameworks provided, I felt as if the very neurological structure of my thought processes was changing. At times I could “feel” two concepts being connected in a new way inside my brain during classes. I became more a more analytical thinker—something I’d gotten feedback for not being during my time at iContact.

Harvard_chicken suit
Enjoying a snow storm that hit Boston in February 2013

HBS taught me to see one problem from ninety angles—equal to the number of classmates in my first year section. I came to realize that there is rarely only one objective truth. There are various perspectives that many smart and reasonable people can hold, and argue for—logically and often compellingly. I understood more deeply that I was seeing reality through my own lens–which is, by definition, a subjective lens. As I heard the various perspectives of my classmates, my understanding of “what is truth” and my approach to seeing reality as clearly as possible improved.

Besides my MBA studies, Harvard gave me many other opportunities to learn and grow. I got involved in various student clubs, including the Entrepreneurship Club, Start-up Tribe, TechMedia Club, Africa Business Club, Social Enterprise Club, and Energy and Environment Club. I also had the chance to go to MIT and sit in on their first Energy Ventures course, where I fueled my interest in renewables, solar, and clean tech. And between all of this, I would head over to the iLab and Skype with the Connect team back in San Francisco, laying the foundations for the next phase of my journey.

Should I Take Time Off from HBS?

As my first year at Harvard came to a close, I found myself confronting a now-familiar dilemma. My San Francisco-based startup was growing, and I was feeling the irresistible pull to be there for this critical phase of our growth. School was an exhilarating, consuming, and satisfying experience—but it had started feeling as if it was pulling me away from something that needed me more. I was glimpsing a world that could come into being through what we were building at Connect, and I needed that world to exist before my attention would be free to continue my education. So I took a deep breath, gave another mental nod to the great Harvard dropouts Gates and Zuckerberg, and decided once again to put my education on hold.

This may seem like a strange decision, given how hard I’d worked to get in to HBS, and how long I’d dreamed of attending. One day, when Connect is thriving, I intend to go back and finish my education. But for now, I feel I’ve already gained tremendous value from my time there. I think people tend to overvalue degrees and undervalue knowledge and relationships. What I learned and the connections I made in my year at HBS will last me a lifetime, opening doors and making things possible that might never have been within my reach had I not attended. I may only have a high school diploma to my name, but I’m more connected and educated than many people with multiple degrees and qualifications.

I remain a strong advocate of going to the best schools possible. But if you’re an entrepreneur who feels so passionate about what you envision that you simply cannot do anything else but work fourteen hour days to make that vision a reality, then completing a degree may not be all that critical. The lack of one has never held me back from achieving anything I cared deeply about.

Aware of the repeating pattern that seems to be shaping my life, I reposted my blog post from the day I took leave from UNC, almost exactly ten years earlier, entitled “And So the Journey Begins.” I added “… Again” to the title, and prefaced it with a short explanation of my latest choice. In conclusion, I wrote:

Remember my friends… believe in yourself, work hard, care deeply about others, be an optimist, live life with infectious enthusiasm, dream big, and make your dreams real. We may have only one life to live… so follow your passion and build something that makes the world better!

Building Connect

The Team at Connect in San Francisco
The Team at Connect in San Francisco

By the the summer of 2012, we had grown to eight team members—seven on the core Connect team plus our office manager and someone who works mainly on my angel investment activities, now rebranded as Connect Ventures. When I finished my first year at HBS in May and took leave of absence from my studies to be in San Francisco with the team full-time, we kicked off with a week where we invited everyone—from our office manager to our engineers—to review our first round of in-depth user feedback. We also shared with the team the big philosophical questions that were driving us, and our understanding of the different kinds of people we were trying to serve, so that, as Anima put it, “when the engineers are online, they are always aware of the human conversation, not just their particular technical part of it.” By the end of that retreat, we had moved from this big-picture conversation all the way to a very practical set of decisions about what it would take to create a minimally viable product (MVP) to launch later this year.

This unusual approach to strategy is typical of how we’ve come to do things at Connect. I’ve learned some important lessons since I sat in my office at iContact trying to figure out strategy by myself, and failed to communicate it fully to my board. At Connect, we’re committed to making space for the full range of perspectives provided by our people, so that when we each sit down to execute, we’ll be informed by the biggest possible view. I’ve learned to deeply value the blending of our different forms of expertise and intuitions about the world. It is my hope that in taking the time to think widely and wisely about the problem we are trying to solve for people, we may find a way to create something more substantive and systemic than many apps that are narrowly focused on a particular task.

I largely credit Anima with helping me to learn how to make space within the closed circuit of my own thinking process for other people’s creativity and insight. We’ve made a deep commitment as cofounders to positively challenge each other and bring intellectual rigor and curiosity to our own and each others’ thinking processes. Also critical was my emerging understanding of the “design thinking” process, which I’d been exposed to in my studies at Harvard. Design thinking is a methodology in which, as IDEO’s Tim Brown puts it, “innovation is powered by a thorough understanding, through direct observation, of what people want and need in their lives and what they like or dislike about the way particular products are made, packaged, marketed, sold, and supported.” Design thinking is a human-oriented design process, which is what Anima had been trying to point me towards in that very first meeting. And it works through creating the right conditions for people to be fully themselves and allow creativity to emerge. Anima does this by telling all our team members to  “bring their weird.” We’re not trying to tame the quirks out of people and fit them into boxes–we’re encouraging them to bring their full selves to our house-office-starship, and inviting them to work and play together and see what arises.

The Principle of Hive Mind Within A Startup

Another important thing I’ve learned from working with Anima is the value of a phenomenon known as “hive mind.” Essentially, hive mind means collaborating in such a way that what we are able to imagine, create, and do together is much more than the sum of the parts. “The hive is a good metaphor for this,” she explains, “because while bees are very clearly differentiated, with particular roles and a clearly defined structure, they share a purpose that no single bee can hold on its own. In a hive, the bees are going out and pollinating many different flowers and gathering nectar from many different places, and all of them provide touch points for understanding the map of reality around the hive. Similarly, at Connect we want to gather all that ‘nectar’ from all of our people, each of whom adds unique ingredients to the creative process we engage in together.”

Technology theorist Kevin Kelly has written extensively about the power of hive-mind:

The whole 50-pound hive organ emerges with its own identity from the tiny bee parts. The hive possesses much that none of its parts possesses. One speck of a honeybee brain operates with a memory of six days; the hive as a whole operates with a memory of three months, twice as long as the average bee lives. Thus, there is nothing to be found in a beehive that is not submerged in a bee. And yet you can search a bee forever with cyclotron and fluoroscope, and you will never find the hive.

I’ve seen this principle come into play at moments when we’re all working creatively together and something emerges that none of us could have thought of by ourselves. Sometimes it happens when we intentionally try to collaborate; other times it occurs spontaneously because at the Starship we’re all working together in an open, interactive space. We overhear each other’s conversations and cross-pollinate ideas, although we respect people’s focused maker-time and space as well. The key to giving rise to hive mind is communication–not just intellectual communication but emotional and instinctual communication. To generate this, it’s essential to create trust and ease within the workspace, which is why we play together as well as work together. Our onboarding document for new hires includes instructions for using the printer/scanner and also instructions for how to use the 3D printer. It specifies the location of office supplies and beach towels. If you came to visit us at the Starship, you would likely see decorations from a recent party, one or more walls covered in post-it notes from a recent brainstorm, and takeout boxes from our daily GrubHub order. We encourage and support our team members to attend events or trainings that have made an impact on us, like Burning Man and the Landmark Forum. We have a private Facebook group where we share things we find that relate to our vision, our problem space, or our product, as well as things that inspire us personally. We use visuals a lot–displaying our values, our metrics, and our inspiration on the walls around us. Visualization makes a powerful impact on consciousness–which is why we are so passionate about helping people to be able to see th

I’ve also seen that when any one of us tries to impose too many of our own ideas and agendas on the company, it stifles the potential for hive mind. For me, this is something I have to be particularly aware of, because as the CEO and sole investor, with such a successful business background, it’s easy for my opinions and ideas to end up having a disproportionate weight in conversations. To counteract this, I started doing something that we named ”flip it and reverse it” (from a Missy Elliot lyric), where I would deliberately change position and argue against something I’d previously been arguing for–like switching from being the defense attorney to the prosecution. It’s a great way to loosen any personal attachment to one’s own ideas that might get in the way of seeing clearly what’s best for the collective.

None of this is to say leadership isn’t important at Connect. But I’ve learned that my most important role as leader is to be the one making sure information is distributed throughout the team so that we can all collectively make the wisest, most informed decisions, rather than expecting my team to funnel information up to me so I can make decisions on my own. It’s up to me to create a physical environment and a culture that encourages the collaborative spirit I’ve been describing–and of course, to make sure all of that gets translated into execution and a great product.

Figuring Out How to Launch Connect

In July of 2013, we were closing in on a finished product design and thinking about launch plans. Some months before, we’d applied to be part of TechCrunch Disrupt‘s “Startup Battlefield.” This event takes place at their annual high profile technology conference in San Francisco, coming up in September. Thirty companies, selected from among hundreds of applicants, get to launch their on stage with a big media presence and then compete before a panel of VCs, TechCrunch editors, and seasoned entrepreneurs for a grand prize. We’d been excited at the idea of launching at this prestigious event and getting such an immediate boost to our user base. In the hope we would be selected, had built our launch schedule to match the conference dates.

As those dates approached, we were absorbed in product design when the call came: we had made it through the selection process. I was elated–and then conflicted. I was on the road at the time, so I called Anima to share the news and she had the same response–excitement followed by concern. She told the team and made a celebratory toast which quickly turned into a serious debate. Were we ready to be on a stage that big? Our mobile app was not finished yet. Even if we could nail it on the technical side, were we ready for a public launch? We cared so much about the human experience of our product, and wanted to do extensive testing. There were still some issues our testers had found confusing around the map interface. TechCrunch would get us a lot of users in a short time, but was that strategically the right move?

After much debate, advice, and consideration, Anima and I gathered the whole team to get their input. We knew this was a decision we needed to make with as many perspectives on the table as possible. Ultimately, we decided to pull out of the “battlefield.” We would go to the TechCrunch conference but stay off the main stage, instead launching our private beta in what they call “Startup Alley,” which would give us the opportunity to keep testing and get both our user experience and our messaging right.

I feel fortunate to have the capital, the time, the team, and the connections to be able to think deeply and widely in this way. Today, we are focusing on building the best tool in the world for connecting with other people. My hope is that we can execute on all of this to create an elegant, sophisticated product that helps human beings from San Francisco to Kenya stay connected to each other more easily, and in so doing, become more aware that we are all part of one global system. Today in the Fall of 2013 we are getting ready to launch our beta version, and we are excited. We know it will take many years to get our product to millions of users–but we are greatly enjoying the journey along the way.

Writing This Book in 2012 and 2013

I am writing The Startup Guide over the course of 18 months from mid-2012 through late 2013. It has become a passion project done on late nights and weekends. During this time period in life I am also building Connect, making investments via Connect Ventures, advising on the creation of Dream.org. I also finished my first year of HBS before taking time off before year two. The way I went about writing the book was somewhat unique, so it may be worth sharing the process I have gone through. Here was the process I’ve used to create this book.

  1. In July 2012 I spent 3 weeks creating an 830 slide powerpoint containing everything I knew
  2. In August 2012 I spent 3 days recording this content on 6 hours of video
  3. In September of 2012 I had that video transcribed into a 60,000 word Word document
  4. In October 2012-October 2013 I worked with Ellen Daly, our editor, to turn that 60,000 word Word document into a series of 40 refined articles on startupguide.com, which we created using WordPress
  5. We then found a publisher, after the book was fully written and we had already received over 100,000 visitors to the web site.

Thanks for reading this story. I hope to work with you in the many decades to come to create a peaceful, prosperous, and sustainable world for all people.

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