Sushant: Hey TREPS! This is Sushant, founder and host of TrepTalks. Today I am really excited. Carol Leaman is joining us today. Carol is one of Canada’s leading female entrepreneurs. She’s the CEO of Axonify, and prior to Axonify, she was the CEO of Post Rank, which was acquired by Google in 2011. Prior to that, she was the CEO of RSS Solutions and Fake Space, which were also sold to strategic acquirers. She also sits on many boards of profit and non-profit organization and advises tech companies In her spare time. She’s also a sought after and award winning speaker and has spoken at many high profile conferences including TedxWomen in Waterloo. I really appreciate your time today Carol and welcome to the show.
Carol: Thank you very much for having me. It’s my pleasure.
Sushant: You have had such a successful track record of entering a start-ups or small companies kind of situations, and then really growing the company many folds, and then selling them. So I wanted to ask you a few questions about that process. About how you take a company and grow it I thought it would be really helpful for startups and entrepreneurs to learn from your taught processes and some of the strategies that you use. Before I ask you those questions, I wanted to ask about Axonify. Can you tell us a little bit about Axonify and what problems it is solving?
Carol: Absolutely. Axonify has a software platform that for corporate enterprise, makes learning very easy. How we do that is we incorporate some actual brain science in terms of how the brain works to remember with, with leading educate mechanics, and we deliver three minute experience a day that actually gets employees to remember what they’re supposed to do on the job every day.
Sushant: That’s good. I went on your website and I understand there’s some actual science behind it. You said that people are learning in three minute intervals. Can you explain a little bit about what that science behind that is?
Carol: We use two brain science concepts called Interval Reinforcement or Space Repetition, that’s the first one, and the second one is called Retrieval Practice. And both of these brain science concepts have been proven over many years of study, to actually be the best way for human beings to drive memory and retention in our heads. And so, both of those concepts are ones that we employ, in the way that we deliver highly targeted questions to employees on a daily basis, in an intelligent and adaptive fashion that means over 30 to 45 days, we can actually get them to solidify the memory pathways in their brains, so that when they do have to do something on the job, they can instantly recall how to do it properly. And they don’t have to guess, they don’t have to exercise judgment, they can instantly know what the right answer is. And then just do that on the job. And so it’s Interval Reinforcement and Retrieval Practice that drive those solid connections between the neuro pathways and the brain.
Sushant: That sounds excellent. So Axonify s applicable in a corporate setting. Is there some lesson that students or people in general can take from the technology that you’re using, like in terms of memory and learning and things like that?
Carol: Absolutely. In fact, our technology doesn’t just apply to corporate enterprise. In fact, students and schools should be utilizing and leveraging exactly what we do to study their K-12 curriculum, or post-secondary curriculum. It’s a much, much more effective way to study than the way historically students have studied. And again, in real life situation, we actually do have several customers who deliver products to the consumer space and are using our platform to reinforce knowledge and information to their consumer customers.
Sushant: Let me change gears a little bit and really ask you some of your strategies for growing your business. You have been CEO for multiple companies, I am very curious to know, and I’m sure a lot of start-ups or entrepreneurs who are just starting out, or even aspiring entrepreneurs would be curious to know, let’s say that you’re starting out in a new company and you’re fresh, you’re getting to know the team, you’re getting to know more about the company, what is the first step you take? Do you ask some questions? Do you sit down with the team and create a strategy? What are the first steps that take that company on that path of growth.
Carol: Well the very first thing that you have to understand it, what is the product or service that you have in great deal. So I always go into a new situation with the goal of acquiring as much information about the product, service, and the market space, as I possibly. To understand that that’s the basic information that you need to be able to understand what it is that you do, who are you serving, what is the market and market size, and it when you have that level of understanding that then you can start to think about strategy and how to take that basic information forward. So understanding the product and the market is critical, it’s essential out of the game. And then what are the resources that you have? What’s the strategy you should employ to move the ball up the field in terms of selling product service and executing on a plan. So you’ve got to understand product and market, what resources you have, and then start thinking about how do you turn this into a successful business.
Sushant: So the strategy has to definitely keep in mind how many resources you have?
Carol: Absolutely. There are many, many things that I would love to do at Axonify today, yesterday, last week, but we’re constrained by resource. And so, your strategic plan has to balance all of the things that you want to do with what are the biggest wins for you, given the resources that you have? So what’s the lowest hanging fruit? The biggest bang for your buck with the resources that you have at your disposal. And then presumably if you employ them well and you execute, that will resort in additional resource to continue down the path of all the other activities that you want to pursue to continue to achieve your strategic vision.
Sushant: Now when you start creating this strategy, let’s say a start-up founder wants to create a strategy, who does not have a lot of experience running a business, when you don’t have a lot of experience, it seems the world is a very chaotic place, you can go in many different directions. Do you have a process? Do you ask some questions that a start-up founder can ask them that would allow them to narrow down that thinking process?
Carol: Absolutely. Because I have advised lots of lower stage entrepreneurs, I do get this question a fair bit. Most of the time, there are things that an entrepreneur should do that are strictly based on what the market need is. So you have two camps. You have the, “I’ve got this amazing idea. I think it could do this for my target market space be it consumer, business to business, and I can build all this stuff and make it work.” But that’s done in the absence of actually what a customer is willing to use or pay for. And so I am 100% focused on, we can build anything. Anybody can build anything. And there are lots of cool things that get built. But your strategy needs to be all around a market segment that’s clearly identified, that has a need, that is under-served or not served. And you need customers, whoever you’re going after, to be able to clearly articulate what those needs are in relation to what you have. And when you start to identify through what we call customer discovery, which I many, many conversation with potential targets for you, you start to align your product with you market segment, much more tightly. And getting that product market alignment is absolutely essential to success. If you have the greatest product in the world, but no market alignment, you’re never going to sell or have a user for anything. So it’s that activity related to customer discovery, need discovery and aligning your product with that market need, is everything that an entrepreneur needs to do in the beginning.
Sushant: The customer discovery process, is that market research where you talk to many different people? Or is that like some of the traffic that you’re getting to your website you try to in some way contact those customers and get to know their feedback. What are some of the strategies to find out what customers are actually looking for?
Carol: So it does depend on what it is that you’re trying to sell. And so the things that you mentioned are both ways. So if you’re selling anything, I always recommend that entrepreneurs speak with people that characterize the kinds of customers they want, articulate the idea, and then elicit feedback that’s as detailed as possible about what that potential customer likes, doesn’t like, would pay for, how much would they pay, what other alternative things would they do to solve the same need? There are anywhere from 10 to 20 very core questions that you should ask of direct prospects that you think are your target market and then pull out the themes from those conversations. And I recommend that entrepreneurs talk to as many as possible. And that is more than 5, more than 10, as many as you possibly can. So that’s direct first person research that if you can do it, that is the most valuable. If you’ve got a web based device where what you’re doing is you’ve launched something on the internet and you’re trying to figure out what people are using. There are many, many tools to see where people are going on your site, where they’re trying to click, and what you can do is get them to register, sign up, give you feedback, contact those folks, and ask similar questions without needing to do it in person. But often just by really getting into granular detailed analysis of the activity on your website, you get a sense of where you’re losing people. And then you can change things on the side and do a little bit of maybe testing to try to optimize the experience and drive them with various calls of actions to the places on the sight that get them to convert to a customer.
Sushant: Has it happened in your experience in the previous companies that you’ve worked at, where when you entered there was a mismatch and you had to change either the product or the strategy too. Do you have an example like that?
Carol: Absolutely! At post Rank, the last company that I ran we had a very, very effective, cool, web based product that filtered RSS content based on social engagement with the content. So the whole idea being that what you actually want to read is what the social is also reading. And so we launched that product. That was the initial offering of the company, and we got tons of users, but then we struggled with, “How do you monetize that?” And as with every company, unless you have an unlimited amount of cash, at some point you have to figure out what you’re going to sell that’s going to generate revenue. And we really struggled with that. We were basically a much more effective RSS reader, but RSS readers are free. So how do you change that game? So we started to analyze what was it about the data that we had, that social engagement data with articles and stories online, that was unvalued, to somebody willing to pay. And the first concept we launched was an analytics’ tool for bloggers who we felt would find that information quite valuable. Who was tweeting their content, who was digging it, bookmarking it and delicious, all of the networks that we tracked, and we did get traction with thousands of bloggers who were quite interested in understanding their audience better and then farming that audience. The trouble is with that plan, bloggers simply don’t want to pay very much for it. And so we needed mass volume. So again, we started to morph the idea into, “Where’s the bigger money?” So we have all these analytics, and who’s willing to pay more for it? And that got us down the track of larger publishers, ad networks, who were really trying to figure out where in the social graph most content was resonating. And why and with who. So we launched a series of EPI’s and data products that we sold in bulk by EPI and that ended up being our largest source of revenue. So we went from being a free tool, to a very low cost tool for a market segment that didn’t have much money to pay, to a strategic tool for ad networks and large publishers who needed to understand audience better.
Sushant: That is an excellent example. All your previous companies, you have had an exit, is that something when you start that you are upfront about? Is your strategy geared towards having and exit in 3 or 4 or 5 years? Or is that something that comes up once a company has grown, you start getting offers and things like that?
Carol: I didn’t quite hear the entire question, but were you asking about exit and do I think about exit at the beginning?
Carol: My philosophy is this. There was one situation that I did go into that the objective was to get the company sold within some reasonable time frame for the venture investors who had invested in the company. Typically though, I just know that if you make the company successful, you acquire customers that are valuable, you generate recurring revenue, you show a trajectory of growth, you have a product sweep that’s expanding, if you do things that make the company successful, without doubt somebody will come along, typically in a 3 to 6 year time frame who wants to acquire what you’ve built. The goal is to make the company successful and generate interest, and then you have a choice. Do you want to sell the company or do you not want to sell the company? And at that point it becomes a shareholder decision that incorporates many factors. But I don’t go into a situation and I’m certainly not thinking about that from Axonify’s point of view. We’re here to build a vastly successful company and do I think we’ll generate acquisition interest? Absolutely. I know we will. It will take several years for us to build value and significant value, and hopefully we’re in the great position to be able to entertain something or not, and just keep building. I think if you go in from the onset with the point of view that I’ve got to build this thing and get it sold, you start to make choices that are not aligned with growing a successful business. You start to build features and function stats that are geared to a potential set of acquirers, and the risk with that is you really have no idea what their strategic interests are. And if you’re building a feature set that you think would dock well with a potential acquirer, you have no idea if they’re building the same thing. So build something the market will buy in terms of customers, and ultimately, you’ll have interest.
Sushant: And then it’s really your decision whether you want to sell or not.
Sushant: I’m really curious to know, as a CEO what is your schedule like? What are the daily tasks that you have to do? Is it new every single day or are there set tasks that you have to do every single day? And how long is your workday?
Carol: Well, I will say that typically, every day is a new adventure. There are many standard or typical things that I have to do. But from a sheer variety of things, particularly in early stage company, my contributions range from writing blog posts to speaking engagements to dealing with Human Resource issues, to dealing with financial realities, to raising capital, that’s what I mean by financial realities, raising capital. Dealing with our shareholders and investors, being the person that’s out there raising brand awareness and evangelizing what we’re doing, understanding the competitive landscape so that I can bring that back and incorporate that into our strategic road map. Making sure all employees are fully engaged and excited about where we’re going. It’s everything. My workday doesn’t end in fact. Every day is very fluid for me. People know that I am available 24/7. I’m online until I go to bed every night. I work as much as I have to to get what needs done done. So there’s no restriction on that. I’m one of those fortunate people, I love what I do, I wouldn’t change my job for anything in the world. It’s hard, it’s very challenging to build a new company but whatever it takes. And that’s just what I do.
Sushant: You mention the word fluid and I’ve watched your Tedx talk and you gave an analogy in there or rocks and pebbles and then your role as the water. So it definitely seems like that. You have a lot of gaps to fill. So my last question because I think we only have five minutes left is about marketing. Again, every company has limited resources. Do you think that marketing is essential and if yes, how can one strategy best which channels to spend the resource time and resources on? Can you give some advice on that?
Carol: Marketing is critical to raising awareness about what it is that you’re doing. In this day and age in particular, we’re inundated with every day it’s a new tool, every day it’s a new app, every day it’s a new something that’s going to change your life. And there’s so much noise in that, really it is only a few that bubble to the top, that get any notice. So you have to be aware that people will not come to you, you need to go find those people and build you champion base, and get them to talk to their two friends and so on. So you know, when you have limited resources and you can’t hire a PR agency and all that kind of stuff, number one you have to have a great website. Which you can build on the cheap for sure. But you have to also be very cognizant of optimizing your website. So doing all that web based stuff for sure. You can run your own webinars. You have to be on social media. You absolutely have to be on social media. You have to be out there as much as you can, being bold to connect with those potential customers and influencers in whatever it is your trying to do to raise awareness about what you’re doing. And that doesn’t necessarily mean you’re going to sell something. But simply raising awareness with target key people that need to know about you, so one of the things we do is we understand the landscape of who’s influential in the corporate learning space. Who’s an evangelist? Who’s somebody who is a guru? Who talks about learning? Not necessarily because they’re selling a product, but they are highly influential. How do we dock with those people and raise awareness about what we’re doing? So a lot of it can be done with grass roots, just heavy lifting, feet on the street, you going out and doing hard work. There’s no magic to it. You have to just keep working away at it and chipping away and there does get a point where you build a critical mass of knowledgeable champions or customers, and things can then start to accelerate. But you have to do it. If you sit in your office building stuff, thinking your audience is going to come, they won’t come.
Sushant: So you started out in the field of Accounting. What interested you in technology or was it an accident that you ended up in technology?
Carol: It was sort of accidental. I ended up leaving public accounting to go work at a public company in their corporate finance group and most of the work that I did there was merger, acquisition, rising capital, refinancing, it was a lot of that. We were buying and selling companies and we ended up buying a company in California called Fake Space, which I ultimately became the CEO of. And so it was through that period of time with the public I became quite knowledgeable about technology generally. It was the beginning of the dot com phase and I just happened to be in the right place at the right time with Fake Space, and it went from there. So it was accidental in that sense. But once I was in it and I got the bug, absolutely, this is what I will do for the rest of my career. Just continue to build companies from the ground up.
Sushant: Perfect. If anyone wants to get in touch with you whether for a business opportunity or just to ask you a few questions, what is the best way of getting in touch with you?
Carol: I’m so easy to find on the Internet. On Twitter I’m @CarolLEaman, just my name, my full name. At Axonify it’s CLeaman@Axonify.com. Those are those probably the easiest ways to get a hold of me.
Sushant: Alright perfect. Thank you very much Carol. It’s a real pleasure speaking with you today and I definitely learned a lot and I’m sure anyone, any start-ups, entrepreneurs, learned watching this video are definitely going to learn a lot and possibly narrow down their focus. So I really appreciate your time today.
Carol: Thank you very much for having me.
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