Building a Successful Startup: Tips from Patrick Campbell, Co-Founder & CEO of Price Intelligently
Patrick Campbell’s software company Price Intelligently takes the guesswork out of setting prices. Their suite of pricing software uses research and market data to pinpoint a pricing sweet spot–and then their ProfitWell product provides free financial metrics to track performance and growth. Essentially, Patrick has figured out a way to help businesses make their pricing simpler and smarter. And it’s working. Today, Price Intelligently is the pricing strategy software behind SaaS giants like Autodesk, Wistia and Litmus. Here’s Patrick’s best advice for budding entrepreneurs looking to make the leap, build a successful team on a tight budget and keep employees engaged with company goals.
Finding that Big Idea
Many entrepreneurs report that they didn’t have to look far for an idea for their startup, and Patrick got his while working in a job where he analyzed the impact that slight adjustments in pricing had on revenue. Patrick decided to start Price Intelligently after his realization that the prevailing wisdom of bringing in more customers to increase revenue didn’t provide the best ROI. His research revealed that finding exactly the right price for a product had a far greater impact – generating 3 to 5 times more revenue without a corresponding increase in sales. It’s one thing to notice a correlation like this one, and it’s another to turn it into a profitable business. Patrick found the formula for new business ideas and chose to jump on this finding for two reasons: “First, price optimization is super important. Second, no one knows what they’re doing. That’s a perfect business opportunity, in our mind.” Tip: Your big idea will probably come from your field of expertise, so start there. Trust your knowledge base and look for solutions to a problem that’s right in front of you!
Getting Started: Co-founders and Funding
A great idea isn’t going to go anywhere without a good foundation. Some entrepreneurs can launch a business on their own, while others find that the support of co-founders can help avoid pitfalls and find shortcuts. Patrick was able to discover knowledgeable co-founders who were working on a similar idea, thanks to an opportune introduction. As for funding, Patrick chose to cash in his retirement savings, which is frequently seen as a huge mistake by financial advisors. However, Patrick saw it as calculated risk because he didn’t have a lot of responsibilities like a mortgage or a family to support. “There wasn’t a lot in my retirement fund because I was young, but it was one of those things where I took the big tax [penalty for an early disbursement]. Then, I ended up living on that for six to eight months before I could start paying myself a little bit to keep going,” he said. Tip: Taking a financial risk isn’t always a bad idea if you have time on your side. Sometimes relying on your investments for capital is a better plan than finding investors, so make sure to explore all of your options for funding.
You Don’t Need a Backup Plan
Starting a business is a huge risk, and many experts have encouraged entrepreneurs to have a Plan B. According to this common advice, everyone should have another way to support themselves if their startup fails. Patrick’s backup plan was fairly simple: he could always get a job. “I told myself that I could get a desk job. If I can’t do that, I can always go get a construction job. If I can’t do that, I can always go work at a coffee shop. If I can’t do that, I can always move and live in my parents’ basement and find a job at McDonald’s,” he said. Studies are proving that Patrick had the right idea. As reported by Forbes, researchers determined that having a high degree of focus on one goal was much more important to success than trying to factor in contingencies. In fact, the study concluded that “just thinking about your backup plan reduces your chances for success.” Tip: Keep your full attention on your startup, not a backup plan. The best insurance against business failure is to stick to your business goals and forget about what you would do “just in case.”
Build a Great Team on a Budget
As the customers start flowing in, it’s tempting to add more staff in order to keep up and really feel like you’re a thriving business. Don’t. Most successful entrepreneurs, including Patrick, credit their ability to hold down costs by waiting to hire high-salary team members. Some look for ways to automate tasks that would normally be performed manually or hiring freelancers to take on specific routine tasks. Patrick made it through his first growth stage using interns, and he learned how to work smarter until he could truly afford his first hire. A fresh perspective, energy and affordable rates made interns a good match for Price Intelligently. Tip: Find creative ways to keep your costs to a minimum by automating tasks, hiring freelancers or utilizing interns.
Set Your Values Before You Hire
Eventually, even help from interns wasn’t providing all the support that Patrick needed. It was time to make that first hire. But before he put out feelers, he considered the qualities he wanted to emulate in his business and started by examining his own experiences. He looked at positive and negative aspects of the corporate cultures he saw at Starbucks and Google when he was an employee there. Then he added the perspective he’d gained from listening to his father’s complaints and praise of management styles. “With those three little data points put together, I thought, ‘Hey, we’re going to hire the right people, and we’re going to treat them well,'” he said. When considering a new hire, Patrick said he always asks one crucial question: “Is this someone I’d want to bring home to my family?” That wisdom has built a strong 30-person team at Price Intelligently that has low turnover. But it’s not always a perfect match. Patrick admits that if there’s one fault that his values-based hiring practices have created, it’s a tendency to be slow to let people go when they’re not a good fit for the company. Tip: When you do hire your first team member, it’s easy to assume that choosing big talent will fast-track your company. For long-term compatibility start by setting your company’s guiding principles–and then select team members whose values are a good match.
Keep Your Team United and Engaged
The most productive, connected teams don’t get that way by force or by accident. Patrick has found that the best way to motivate his team is to remind everyone exactly where the team is headed for the year and how their role fits into that plan—he calls that alignment. “What I mean by alignment is making sure that the entire team understands what we want to accomplish. We pick the compass metric or compass goal for the year, whatever it is. We help them understand each of the organizations and how it feeds to that particular goal. Then, they see how individually they feed towards that organization and the company goals,” he said. Patrick has found that when his team members understand how the goals in their life, like taking on more responsibility in work or owning a home, fit into the larger picture of the company’s progress, everyone works together more effectively. “That alignment is just so powerful. Once people understand what they’re supposed to be doing and how they contribute, you start to see–pretty much overnight–the difference in people as they’re managed and as they’re marching towards that particular goal,” he said. At Price Intelligently, Patrick has taken alignment one step further by creating alignment docks, which is a file that each individual creates for the whole company to access. It states their personal goals and way that those goals fit into the broader company goals. In order to have everyone in the company working together effectively, Patrick also requests that team members add information about their preferred method for feedback. Some want to hear it privately, not publicly. Others want to have information in writing prior to the meeting, others are fine with a verbal exchange without notes. Tip: Maximize productivity and individual motivation by keeping everyone aware of your company goals–and how their personal goals and outcomes directly contribute to company growth.
SaaS Success Is More Than a Big Idea
Jumping into the SaaS arena takes more than a great concept and some capital. Knowing how to find knowledgeable co-founders (if you need them), building a great team and staying focused on continued progress and growth takes a steady hand on every aspect of building and promoting the product. It’s easy to focus on your big idea and assume you’ll attract a great team. But take Patrick’s advice and build slowly, maintain a low overhead and keep your eye on the goals and values you’ve established. Do you have any tips for others looking to get their startup off the ground? Leave a comment below to let us know what choices or advice helped you along the way.